Ladies and gentlemen, good day and welcome to the Adani Power Limited Q2 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities Limited. Thank you, and over to you, sir.
Yeah, thanks, Sagar. On behalf of ICICI Securities, I would like to welcome you all on Q2 FY 2026 earnings call of Adani Power Limited. Today, we have with us, from the management, Mr. S. B. Khyalia, CEO; Mr. Dilip Jha, CFO; Mr. Nishit Dave, Head Investor Relations. We'll start with the opening remarks, followed by Q&A. Over to you, sir.
Extend a warm welcome to everyone who has joined us today for our second quarter 2025-2026 earnings call. I appreciate that you have taken time out of your busy schedule to connect with us. Before we begin, I encourage you to download and review our quarterly results and the analyst presentation, which have been made available on the stock exchanges. With me on the call, I have our CFO, Mr. Dilip Jha, and Nishit Dave, our Investor Relations Head. The Adani portfolio company has consistently demonstrated their strength with resilience over the past several years. The portfolio scale in terms of investment revenues, EBITDA, and cash flows has grown by multiples. Focusing on Adani Power, I am proud to say that our company has made a significant contribution to the group's earnings growth during this period.
We have navigated a range of challenges in the market, and we have emerged stronger each time. Our team has turned these challenges into opportunities, leveraging our experience and agility to drive sustainable growth. Now, we are set firmly on our path to raise our generation capacity from 18 GW to 42 GW by 2032, with an even faster growth in earnings and cash flows. We are set to increase our market share in the thermal power sector significantly. We have won new long-term PPA bids for more than nine GW out of the 14.5 GW of bids awarded by the state so far. In the recently concluded quarter, we have announced the award of a 2,400 MW PPA in Bihar and 1,600 MW in Madhya Pradesh.
In addition to this, we have also won a 570 MW long-term PPA for 25 years recently from Karnataka, which would be supplied from our existing capacity at Raipur. There are another 17 GW of bids which are at various stages of submission currently. Proactive steps are being taken by states and the central government to meet the project's long-term requirement of power from all sources. We are highly confident that we will tie up our upcoming capacities under these emerging opportunities. These PPAs will be value-accretive for the company. They will enable us to generate higher returns on investment along with steady cash flows. Our capacity expansion drive is progressing rapidly. There are four projects currently under construction with a total capacity of 6,120 MW. They will be completed in stages between 2026-2027 and financial year 2028-2029.
We have fully de-risked our project execution pipeline with 100% advance ordering for boilers, turbines, and generators. This is largely brownfield development, and we have 100% land availability. Similarly, most of the environmental clearances have also been granted or are in the advanced stage of approval. Our in-house project management capabilities, coupled with our financial strength and proactive strategy, will enable us to stay well ahead of the competition and deliver projects on time while maintaining a capital cost leadership. We have revived the operations of the 600 MW Butibori plant of Vidarbha Industries Limited, which was acquired in July 2025, within just two months. This plant had been shut down for almost 10 years. We have also signed a 500 MW PPA for this plant with Maharashtra DISCOM for five years recently. Now, let's talk about our performance during the second quarter of 2025-2026.
We have registered more than 7% growth in power sale volumes in the quarter at 23.7 billion units as compared to 22 billion units in quarter two of 2025. The year 2025 has seen an unprecedented early onset and much-delayed retreat of monsoon in recent memory. This has affected overall power demand and peak demand adversely. Merchant power tariffs have also been subdued because of the prolonged rainy season. As a result, we have achieved a PLF of 62.8% for quarter two of 2026 as compared to 66.9% of quarter two of 2025. In the first half of 2026, we have achieved a PLF of 64.8% versus 72.3% in the first half of 2025. Despite this, we were still able to post a growth in volumes with the help of our competitive PPAs, low-cost merchant plants, and increased generation capacity.
However, long-term demand growth drivers are intact as they are tied to India's strong economic growth. We expect our PLF to improve as the lingering impacts of weather abate and demand picks up. Adani Power posted total continuing revenue, excluding any one-time prior period items, of INR 13,707 crores in quarter two of 2026, which is a slight growth over quarter two of 2025. Our EBITDA performance for quarter two of 2026 is also quite stable despite lower tariff realization due to our cost-efficient operations and remunerative PPAs. The continuing EBITDA of INR 5,325 crores for quarter two of 2026 is close to the continuing EBITDA of quarter two of 2025.
Profit after tax for quarter two 2026 is also quite healthy at INR 2,949 crores and similar to the PAT for quarter two of 2025, demonstrating our tight control on debt and finance costs despite the growing scale of operations and ongoing expansion. Looking forward, we expect our power demand growth to pick up again, resulting in improved offtake under long-term contracts as well as greater traction in the short-term market. We intend to tie up more of the open capacity under the PPAs, similar to the recent one GW of ours. I look forward to the upcoming commissioning of new capacities from the next financial year onward, which will lead to the next cycle of rapid earnings growth. Adani Power is excited to play a key role in meeting India's growing energy demand reliably and enhancing its energy security.
I would now like to hand over the call to our CFO, Mr. Dilip, to elaborate further on the quarter two results. Thank you, and over to you, Dilip.
Thank you, Khyalia, and good afternoon, everyone. It is my privilege to present Adani Power's strong and resilient financial performance for the second quarter and first half of the financial year 2025-2026. Despite unprecedented weather conditions and slower pace of power demand growth, Adani Power has delivered a remarkably strong and stable performance this quarter two. The subdued power demand and weakness in the tariff acted as a constraint on revenue growth despite the higher power sale volume. Total continuing revenue for quarter two FY 2026 was INR 13,639 crores, slightly higher than the revenue of INR 13,465 crores of quarter two last year, a testament to our resilient business model. Total one-time prior period income recognition for quarter two was INR 669 crores, mainly pertaining to old matter and late payment surcharge . For quarter two FY 2025, this item was broadly similar at INR 598 crores.
For the first half of FY 2026, total continuing revenue was INR 27,807 crores compared to INR 28,577 crores in FY 2025. For H1 2026, prior period revenue was INR 1,075 crores, again similar to the H1 2025 figure of INR 1,020 crores. Now, coming to the cost, fuel expenses in Q2 FY 2026 grew modestly by 2.4% to INR 7,205 crores from INR 7,032 crores in quarter two last year due to higher volume and newly acquired plants. For H1 2026, the fuel cost declined by 2.8% to INR 14,514 crores from INR 14,930 crores in H1 of last year. Other expenses increased by 24% to INR 814 crores in quarter two 2026 from INR 655 crores in quarter two of last year, primarily due to the full period operation of recently acquired plants and additional maintenance expenditure due to scheduled overruns.
Subsequently and consequently, continuing EBITDA for quarter two FY 2026 stood solid and stable compared to last year. For the first half, continuing EBITDA was broadly similar at INR 11,076 crores compared to INR 11,692 crores in H1 of last year. Depreciation charges had increased in line with the acquisition of power plants over the last one year. We have maintained control of our finance costs even as we expanded our operations. As a result of the flat EBITDA, continuing profit before tax for quarter two FY 2026 was INR 3,298 crores against broadly similar to the continuing PBT of INR 3,537 crores of the quarter two of last year. Continuing PBT for H1 2026 was INR 7,096 crores as compared to INR 8,020 crores for H1 of last year, in line with the continuing EBITDA and depreciation rates.
There has been an increase in deferred tax, leading to a higher tax charge for quarter two and H1 2026 as compared to the corresponding period of last year. Consequently, profit after tax for quarter two FY 2026 was slightly lower but very healthy at INR 2,906 crores compared to INR 3,298 crores in quarter two of last year. Similarly, for the first half, profit after tax was commendable at INR 6,212 crores as compared to INR 7,210 crores in H1 of last year. Our total debt as of 30 September 2025 stands at INR 47,254 crores compared to INR 38,335 crores at the end of March 2025. The increase is mainly due to bridge financing for capital expenditure and working capital needs supporting our ambitious growth plan. Our net debt position remains steady and healthy at INR 36,776 crores. We are investing our strong and steady cash equivalents into capacity expansion.
We are following an efficient capital structure policy without a high reliance on debt. Thank you for your continued support. Let us now open the floor for question and answer. Moderator, over to you. Thank you.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and then one. Our first question comes from the line of Manish Somaiya from Cantor Fitzgerald & Company. Please go ahead.
Thank you, gentlemen. Congratulations. A couple of questions. One, if you can just talk about the expectations on the merchant and PPA tariff realizations in the second half, given softness in merchant pricing that we have seen so far?
Yeah. So I'm repeating your question. So you are trying to understand the expectation of PPA and merchant price movement in the next half of this year?
Yes. If you can just give us a big picture perspective on how we should think about the second half versus the first half?
Yeah. Good afternoon, Manish. As regards to PPA rates are concerned, there will not be any change in the PPA rates because the rates are obviously the long-term rates. And if the demand is less, it is only impacting the offtake. So there is no different expectation as regard to rates of the PPA are concerned. We have an average realization of INR 5.70 per unit during this quarter, and we expect the same rate will continue to be realized because under the PPA rates are not getting much of change. As regards to merchant realization is concerned, we have achieved INR 5.37 as the rate during this quarter two. And for the balance period, we are expecting an average realization of around, let us say, INR 6 or so, which used to be the rate in the last few years. So that is what our expectation is. Thank you.
On the merchant portion itself, I think right now it's at 88%. SBK, are there any plans to try to increase that, so hence to avoid the volatility in pricing, and how do you think about that?
As I explained in my presentation or this piece, that we have recently signed the PPA with Maharashtra for a medium term of five years at the rate of INR 5.55, and we have now recently received one LOI from the state of Karnataka at INR 5.79 or so. So we have already tied up beyond what we said earlier, around 1,100 MW, so if I consider in the overall portfolio, I think now it must be working out 92%-93%. So we are taking the steps to tie up more and more under the long-term or the medium-term PPA so that we can reduce the volatility impact. Thank you.
Okay. No, that's super helpful. I was trying to get to that 92%-93%, and hopefully, with more PPAs, it'll be higher. So I appreciate that answer. The other question I have is on the CapEx. Obviously, you have a significant pipeline, locked-in pipeline. How should we think about CapEx in 2026 but beyond 2026? And how should we also think about the funding mix between internal and external? Thank you.
Our CapEx program, we are generating a significant portion of cash flow from our operating assets. The significant portion, we will fund from our internal accruals. In the next two, three years, there will be interim bridge requirement of the CapEx that we will take from market, either in the mix of short-term or the domestic capital market or domestic bank. The significant portion, we will fund from our internal accrual fund. The interim gap, we will fund from the market. That is in the mix of maybe a domestic capital market and domestic bank.
Okay. Super. Thank you so much for your help, and congratulations again.
Thank you. Thank you, Manish.
Thank you. Our next question comes from the line of Abhinav from ICICI Securities. Please go ahead.
Yeah. Good evening, sir. Thanks for the opportunity. My first question is on the Assam bid. Has the bid for 3.2 GW been floated? What is the status over there?
You are talking about Assam?
Yes.
Okay. So the bids have been concluded, and we are the L1 party there. The approval of the commission is also received. So we hope that we should get the positive communication shortly. So for the time being, whatever is in the public domain is that the commission has passed the orders.
Understood. Thank you. The second question is, can you share the revenue, EBITDA, PAT numbers for the two acquired plants, Coastal and Amarkantak in H1?
Yeah. Just give me a moment. So my revenue for quarter two, for Mahan, yeah, it was INR 1,049 crores. Tuticorin, this is INR 677 crores. And Korba, INR 339 crores. If you will talk about EBITDA for Tuticorin, this quarter EBITDA was INR 54 crores. And then for Korba, it was INR 84 crores. And for Mahan, it was INR 521 crores. So let me repeat it again. For Mahan, revenue for the quarter was INR 1,049 crores, as against EBITDA, INR 521 crores. Tuticorin, revenue INR 677 crores. Against that, EBITDA, 54 crores. Korba, revenue INR 339 crores. And then EBITDA, INR 84 crores. This is, I'm talking about operating revenue from the plant. Thank you.
Got it. So thank you.
Thank you. Our next question comes from the line of Shirom Kapur with Jefferies. Please go ahead.
Yeah. Sharon, are you audible?
Yes, sir. You're audible.
Yeah. Thank you. Yeah. So as I was saying, you mentioned about 17 GW of bids at various stages. Could you maybe break that up into which states are offering these bids and what is, if you could just quantify that statewise?
The bids are in the public domain, which Rajasthan is 200 MW. Uttarakhand, it is 1,320 MW. Maharashtra, 1,600 MW. Uttar Pradesh, 4,000 MW. And West Bengal, 2,260 MW. So it is 12,000 MW. And apart from that, there are bids which are in advanced stage of finalization. Karnataka, 1,600 MW. Gujarat, 4,000 MW. And Assam, 3,200 MW. So if we take the latest figures, the total is working out around 22,000 MW instead of 17,000 MW because recently, Gujarat has floated a bid of 4,000 MW, which was, I think, not included in the earlier figures. So the approximate figure working out is 22,000 MW. Thank you.
Thank you. Thank you. That's very helpful. Just want to clarify. So in your presentation, you mentioned that about 91% of your operational capacity is tied up under PPAs. And if we see in the later pages, about 8.5 GW of the upcoming capacity is also tied up. So is it a correct figure that totally out of your 42 GW target, about 25 GW is tied up under PPAs currently?
So the new capacity which we have planned is 23.5 GW. And out of that, 8.5 GW out of the 23.5 GW, 8.5 GW is already tied up under the PPAs. So that is a correct figure. And as I said, that over and above this, 3.2 GW Assam bid, we are L1. And recently, we have also tied up around 1,100 MW from the existing capacity. That is, as I said, 500 MW Maharashtra and 570 MW Karnataka.
Sure. So that's helpful. Just to clarify, from the operating capacity at just 18,150 MW, how much of that in gigawatt is currently tied up under PPA, including the 1.1 GW that you have recently signed? If you could just give a gigawatt number to that because there's 91% written on one of your pages and 88% on the others. Just want to get a clarification on that.
Give us one minute. Broadly, the figure is around 16,700 MW because sometimes the agreement is at the bus bar. Sometimes it is at the state periphery. So there are some minor changes here and there. But broadly, it is 16,700 MW out of 18,150 MW.
Great. Got it. So thank you so much. And just last question on so you had a target of you've obviously recently upped your target to 42 GW by FY 2032 from 30 GW earlier by FY 2030. So just want to understand in terms of planning, are we still on track for 30 GW by FY 2030, which will then ramp up to 42 GW by FY 2032? Just want to get a clarification on that. And of that 30 GW of your original plan that was there by FY 2030, how much of that portion is PPA tied up? And excluding what's going to come after FY 2030, just want to get a sense on that.
So when we are saying 30 GW, that means it is addition of 12 GW. So I think that must be clear to you. So we are talking addition of 12 GW and then another addition of 12 GW. So roughly 23.5 GW in total. And the first 12 GW is very much on track. We are going to, let us say, commission in next year around three GW. Thereafter, we are going to commission 2.4 GW. In next to that year, 3.2 GW and 2029-2030, 7.2 GW. So we are going to commission more than the capacity of 12 GW, which was planned earlier. In fact, from the second stage of 12 GW, also to some extent, the capacity will get commissioned before 2029-2030. So there is no issue as regards to commissioning of first 12 GW is concerned.
Got it and of that.
And then.
The PPAs tied up.
Yeah. These PPAs which we have already signed are part of this up to 2029-2030.
Okay. Understood. And so if I could just squeeze in one last question. Just on your – you've already ordered out your entire 100% equipment for the upcoming 23.7 GW capacity. So just want to understand how much of this would you share, how much of this has gone to BHEL and how much to L&T? If a rough split would be helpful.
I can give the broader number, not exactly. We have given eight machines to L&T, eight machines of 800 MW, and balance to BHEL.
Got it, sir. Thank you so much. This is very helpful. All the best.
Thank you.
Thank you. Our next question comes from the line of Aniket Mittal from SBI Mutual Fund. Please go ahead.
Yes. Thank you for the opportunity. A couple of questions on Godda. So first is, we've, I think, got the approval to connect Godda power plant to the Indian grid. Just want to understand by when can we get connected to the Indian grid, what's the process going forward? And also correlate to that, if once we do get connected, would we be allowed to sell power from Godda to the Indian market despite being in a PPA with Bangladesh?
We are expecting that it will get connected by December 2025. And as regards to your second question is concerned, it is allowed under certain conditions. And the certain conditions are already mentioned under the regulations that when you can sell. So the conditions are either there is persistent no scheduling from Bangladesh because they don't have demand, or there is a payment default under the PPA. So in these two conditions, we will be allowed to sell the power in the Indian grid. And these are the precisely two conditions in which we would also like to sell. Otherwise, why should we be interested in selling in the Indian grid? So perfectly, it is basically going to address the issue. So if because of any reason, if the power is not being scheduled or because we are not getting the payment, so both the conditions will get addressed.
Thank you.
I got that. That is helpful. On Godda, again, if you could tell me what was the PLF for the second quarter? And at the end of 2Q, what's the total receivables now for Godda?
Hold for a moment. PLF. So PLF was 72% at the end of the quarter two, which was 73% last year. So the PLF is more or less same. And PLF of Godda is much better than the Indian grid because in Indian grid, the PLF of most of the thermal power projects is between 60%-65%. And as regards to outstanding payment is concerned, it is outstanding of only now one and a half months. In any case, one month is not due. So out of the overdue, it is only half months overdue. Thank you.
Understood. It just took the bids part. I mean, two bids that I remember were in fairly advanced stages was the Rajasthan and the Uttarakhand. If you could just provide your estimate or timelines on where the bids are for these two states, when do we expect finalization to happen?
I don't think we can estimate anything on behalf of states. We can only give what is the present state. So in case of Rajasthan, I think the bid submission date is in the next month. And in case of Uttarakhand, the documents are under approval of the regulator. So that is the present status. Thank you.
I got that. Just one last question. You mentioned earlier in your comments that the merchant tariff this quarter was about INR 5.37. Just to get a comparison, what was the same for the same quarter last year?
Last year, our average realization for same quarter was INR 5.88. This year, it was INR 5.37. So, roughly 50 paisa lower realization has been in this quarter.
Understood. That's very helpful. Those are my questions.
Which is approximately 10% of the, let us say, tariff.
Yep. Got that. Thank you. Those were the questions I had.
Thank you.
Thank you. Before we take the next question, a reminder to all the participants, you may press star and one to ask a question. Our next question comes from the line of Vipul Agrawal, an investor. Please go ahead.
Yeah. Good afternoon, sir. Again, congratulations for our stellar performance in Q2 and H1. Just wanted to ask two questions from my side. What is the total estimated CapEx for the 23 GW expansion that we are planning now?
You are asking for the total 23.5 GW capacity?
Yes, sir.
It is approximately INR two lakhs crore.
Right. Right. And you already answered the gearing question. Second is, out of the additional 23 GW capacity, with regards to fuel linkages, are we being provided fuel linkages along with the PPA, or we will be applying for the fuel linkages?
No. Since we have already stated that we will be tying up through the PPA, then nowadays, every bid is coming with the attached fuel linkage to the state utility. So for all this capacity, fuel will be provided by the utility under the bid.
Okay. And third question would be, so the new PPAs that we would be signing will be capacity charge for the fuel plus fuel charge will be passed through. It's not like a single levelized tariff that was, I mean, because of it, we had issues with Mundra, etc., earlier.
No. Under the new standard bidding documents, you have to quote for only first year. You are not allowed to quote for 25 years any fixed number. So therefore, only first year the number you quote. And in case of fuel, it is completely passed through based on a formula which includes the escalation rate, etc., which are the operating parameters. And capacity charge, there are slight variations in different states. So in some of the states, the capacity charge will go up by 30% of PPA and 2% every year reduction, whereas in a few states, it is up by 30% of PPA and 1% reduction. So more or less, the capacity charge will remain stagnant and fuel charge is passed through.
Okay. Last question, sir. There was a news report dated 11 September where the management had given a guidance of reaching INR 70,000 crores EBITDA in six years. So this is accounting for the entire 42 GW capacity, or this is just for the 30 GW?
Yeah. Mr. Agrawal, actually, this was a media report. The management has not given any such guidance. So it was the media's own analysis on the basis of which it was given. But I think we would hope to actually achieve a better EBITDA than what they had projected.
Actually, I think that report was based on 30,000.
Okay. Thank you, sir. Thank you. So that will be enough. Thank you.
Thank you. Our next follow-up question comes from the line of Manish Somaiya with Cantor Fitzgerald & Company. Please go ahead.
Thank you again for getting me back on. SBK, I think you mentioned that you have pre-ordered critical components for the expansion pipeline. Can you give us a sense of pricing on the equipment vis-à-vis what you have paid before? I assume it's going to be higher, but just trying to understand if it changes the return dynamics because of the inflationary nature of what's transpired on equipment costs. So maybe if you can just help us with that. Thank you.
I think it will not be appropriate to discuss the pricing of the equipment on a public platform. So I would not be in a position to give exactly pricing of the equipment because that would be, let's say, not appropriate giving that type of numbers. So these are obviously confidential information, and in the competitive market, it is not appropriate to disclose these numbers. Thank you.
Let me ask you a different question. In terms of the delivery of the equipment, I assume that that's going to be meeting your timelines based on the conversations you have had with your partners. That is something that we can feel comfortable with, right?
Yeah. The deliveries which we have agreed are ranging from 38 months to 75 months in total. And these are staggered deliveries. And we are confident that we will get the deliveries as per this time schedule because four projects, as we mentioned, are under construction. And all the four projects are ahead of the time in terms of delivery as well as execution. So we are very confident that we will get the deliveries as per the agreed time schedule. And therefore, there is no likelihood of any cost overrun.
Okay. Thank you so much.
Thank you. A reminder to all the participants, if you wish to register for a question, please press star and then one. Our next question comes from the line of Nirav Shah from GeeCee Holdings. Please go ahead.
Yeah. Hi. Good evening, sir. Thanks for the opportunity. Most questions are answered. Just last one question. So we have commissioned a Dhirauli mine, and there was an incentive of waiver of the cess. But now, the cess has been already completely waived. So now, in what form will we be incentivized on the mining?
Dhirauli mine, the compensation cess is one of the activities. Apart from that, Dhirauli mine is actually very near to the plant, Mahan. There, we have already one operating unit. Two more phases are coming over there as an extended management. Compensation is one aspect. Apart from that, there will be huge logistics advantages in terms of the Dhirauli mine. For Dhirauli mine, we are expecting that by end of this year only, the box cutting will be there. From next year, we will have coal from that mine.
So the incentive of if we consume the coal within the state, the INR 400 incentive that was there, I mean, now it will no longer be there? Is that fair to say?
So there is no incentive so far compensation cess is concerned. Compensation cess is driven by the GST Act, not by any other state incentive.
Okay. So the incentive is different?
It was a comparative, let us say, incentive, not in real terms incentive. And as per the new structure, there is no negative impact.
Okay, but no positive, that's why it's neutral?
Most of the domestic market, the impact is positive. But since the positive or negative, the change in law is to be passed on to the customer as change in law. So to the company, it is hardly anything.
Got it. Great, sir. Yep. That's from my side and all the best, sir. Thank you.
Thank you.
Thank you. Participants, you may press star and then one to ask a question. Our next question comes from the line of Nikhil Nigania with Bernstein. Please go ahead.
Hi. Thank you for taking my question. I just had a couple of questions. Number one, it's interesting to see so many tenders coming for thermal, even from renewable-rich states like Gujarat, who are also doing a lot of battery tenders, and battery prices are going low. So wanted management's view on what do you think is driving it? I mean, we understand the need for baseload power, but it's still surprising given states like Gujarat, as you said, have also started reaching out for thermal PPAs. So appreciate your view on that.
What is your question?
So given how cheap renewables have
Yeah, yeah. Please continue.
No, I was just saying, given how cheap batteries have become and renewable as well together with batteries, so I was finding it surprising that so many more thermal tenders are coming, even from renewable-rich states like Gujarat, which you mentioned, is also looking to do a thermal PPA. So wanted your view on what is driving this strong demand for thermal contracting of late.
So I think you yourself have commented that it is for the baseload. So obviously, the thermal is for baseload. And the tenders for battery, whatever has come so far, are of, let us say, for the token quantum. It is not really going to meet the baseload requirement. Even the Government of India's projection of installing batteries up to 2030 is a fraction of the total demand. So it is expected that the thermal will only be supplying the baseload power. And therefore, every state is coming out with a tender for the thermal projects supply. And if you will see the resource adequacy report of Government of India, they have provided all these resources, whether it is solar, whether it is wind, whether it is battery, and thereafter have worked out the requirement of thermal installation.
So the tenders which the states are coming out, they have already considered the possibility of installation of battery. And the tenders are coming after considering the battery plant under these studies.
Got it. Understood, sir. A related question on that, most of these tenders, are you seeing a need to set up the thermal plant within the state, or are they fine with it somewhere else and you get the coal resource allocated to the state?
Every state is taking its own coal because there are many negatives and positives having the power station in the state or at pithead. If you install a power station at pithead, you save in the transportation cost, but then you pay the transmission charges and losses. Apart from that, states are also evaluating if you put up the power plant in the state. You get a huge amount of GST, not only on capital expenditure but also during the operations because GST is the consumption-based tax. So in whichever state the ultimate product is consumed. So in case of operations, the coal is consumed in the state if the project is installed in the state. So there's a huge benefit of GST revenue on the CapEx as well as OpEx.
There is a huge possibility of the employment generation as well as the installation of ancillary industries in and around a thermal power project. So these are the benefits. On the negative side, if you put up a power plant in the coal-bearing states, every state is asking something at variable cost. So in case of Chhattisgarh, it is 5%. In case of Odisha, it is 12%. So if you supply 5% or 12% power at variable cost, that means the capacity charge of that quantum has to be loaded on the rest of the power. So these are pluses and minuses of putting the power plant at the pithead or within the state. So every state is taking their own calculated decision. Thank you.
Understood. Appreciate the color. The last question I had is related to the point you brought up. So now GST has increased, but cess has gone away from coal. So net-net for most plants, we should see a reduction in fuel cost. Has the discussion started from states to reflect that as change in law in the tariffs, or not at present?
So it is different position from state to state. Some of the states have issued the change in law notice, and some may be issuing in due course because it has happened last month only. But in any case, because it has happened, so from the date of notification, in any case, it has to be passed on. So it is only a process part where they have to issue the notice of change in law, and then they have to file a petition before the regulatory commissions where they have to get it determined. And CERC, as you may be aware, has already initiated a few suo motu petitions to pass an order in this regard.
Perfect. Thank you so much. Those were my questions. Thanks for answering.
Thanks.
Thank you. Participants, you may press star and then one to ask a question. As there are no further questions from the participants, I now hand the conference over to the management for the closing remarks.
Thank you very much for the time and patience to listen to us. We hope the same level of cooperation in subsequent quarters. Thank you. Thank you very much. Have a great night. Thank you.
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.