NHPC inks power purchase agreement with Essar Renewables for Rs 4,500-crore project

New Delhi: Essar Power will invest approximately Rs 4,500 crore to develop a 300 MW renewable energy project in Andhra Pradesh after its renewable energy arm, Essar Renewables Limited (ERL), signed a power purchase agreement (PPA) with state-owned NHPC Limited.

The project will integrate solar and wind generation with Battery Energy Storage Systems (BESS) to deliver Firm and Dispatchable Renewable Energy (FDRE), ensuring a more reliable and predictable electricity supply, the company said in a statement.

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The agreement forms part of Essar Power's broader strategy to develop a diversified energy portfolio of approximately 5 GW across renewable, thermal and gas-based power generation.

Focus on reliable renewable power

Unlike conventional solar and wind projects, FDRE facilities combine renewable generation with energy storage to ensure electricity availability during periods of low solar irradiation or wind generation.

Such projects are gaining importance as India accelerates renewable energy deployment while addressing challenges related to intermittency, grid stability and rising electricity demand.

Commenting on the investment, Srinivasan Vaidyanathan, Operating Partner – Infrastructure, Essar Group, said, "As India advances towards the vision of Viksit Bharat, building a reliable and sustainable energy ecosystem will be critical to supporting its ambitions. Essar's experience in the energy sector, combined with our focus on new technologies and emerging opportunities, gives us a strong foundation to participate in this next phase of India's energy growth."

Essar targets 5 GW diversified portfolio

Essar Power CEO Ankur Kumar said the NHPC agreement would strengthen the company's presence in solar, wind and battery storage technologies.

"At Essar Renewables, we are focused on building a strong portfolio across solar, wind and Battery Energy Storage Systems, tapping into the growing opportunities in India's renewable energy sector. The 300 MW FDRE project with NHPC is an important milestone in this journey, strengthening our portfolio and advancing our ambition to build a scalable renewable energy business," he said.

According to the company, Essar Renewables has already secured three major renewable energy tenders from central public sector undertakings NHPC and SJVN, with a combined awarded capacity of approximately 1 GW.

NHPC, a Navratna public sector enterprise under the Ministry of Power, is India's largest hydropower development organisation and has been expanding its presence in solar, wind and other renewable energy segments.

Energy storage gains importance

The investment comes as India works towards achieving 500 GW of non-fossil fuel-based installed electricity capacity by 2030.

With increasing renewable energy penetration, storage-backed projects are expected to play a growing role in balancing electricity supply and demand, particularly during evening peak hours and periods of fluctuating solar and wind generation.

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For Essar Power, the Andhra Pradesh project represents a significant step towards expanding its clean energy business while maintaining a diversified generation portfolio.

The company has not specified the project's commissioning timeline or the proposed battery storage capacity in its announcement.

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