Full Breakdown
Bihar Signs Landmark Power Supply Agreement with Adani Power
9/14/2025, 12:57:17 PM
Major Investment in Bihar's Energy Sector
On Friday, Bihar State Power Generation Company Limited (BSPGCL) signed a long-term Power Supply Agreement (PSA) with Adani Power Limited for a 2,400 MW ultra supercritical thermal power project located in Pirpainti, Bhagalpur. This agreement, valued at approximately INR30,000 crore (around $3 billion), is being hailed as the largest energy sector investment in Bihar's history. Energy Minister Bijendra Prasad Yadav emphasized that this project marks a significant milestone in the state's infrastructure growth and reflects a favorable environment for large-scale private investments.
Project Details and Economic Impact
The ultra supercritical technology employed in this project is designed to operate at higher temperatures and pressures, enhancing efficiency and reducing coal consumption per unit of electricity. This advancement is expected to lower emissions and operational costs. The project is anticipated to generate approximately 10,000 to 12,000 jobs during the construction phase and around 3,000 jobs once operational, contributing significantly to local employment.
The PSA is structured for a duration of 25 years, ensuring stable power supply for Bihar while providing Adani Power with assured demand and revenue. The company secured the project by offering the lowest supply rate of INR6.075 per kWh, which was achieved through competitive bidding. This pricing strategy aims to keep costs manageable for consumers and distribution companies.
Regulatory Framework and Coal Supply
The coal linkage for the power plant has been allocated under the SHAKTI Policy, which was revised in 2025 to streamline coal allocations. This policy provides two avenues for coal supply: one at a notified domestic price and another through auction. The allocation under SHAKTI is expected to mitigate uncertainties regarding coal supply, allowing Adani Power to effectively manage operational costs.
Timeline and Challenges Ahead
Adani Power aims to fully commission the plant within 60 months, contingent upon obtaining necessary approvals, land, and environmental clearances. While this timeline is ambitious, it is not uncommon for large thermal projects. Key risks include potential delays in regulatory approvals and changes in coal supply regulations. The project is crucial for addressing Bihar's ongoing power shortages, particularly in rural and semi-urban areas, and aims to enhance the reliability of electricity supply.
Criticism and Opposition
Despite the optimism surrounding the project, concerns have been raised regarding environmental impacts and the long-term sustainability of coal-based power generation. Critics argue that reliance on fossil fuels may contradict India's commitments to climate goals, especially as the country seeks to transition to cleaner energy sources.
Verbatim Quotes
- “This is the biggest investment in the history of Bihar’s energy sector and will establish a strong environment for future industrial growth,” — Bijendra Prasad Yadav, Energy Minister of Bihar
- “The lowest supply rate means competitive bidding was used, and Adani’s offer beat others in cost per unit of power.” — Source Unspecified
Conclusion
The signing of the PSA between BSPGCL and Adani Power represents a significant step forward for Bihar's energy infrastructure, promising enhanced power supply and economic benefits. However, the project must navigate regulatory challenges and address environmental concerns to ensure its long-term viability and alignment with national energy goals.
