Essar Power to invest Rs 4,500 crore in 300 MW renewable energy project in Andhra Pradesh

Essar Power is set to invest around Rs 4,500 crore in a 300 MW Firm and Dispatchable Renewable Energy (FDRE) project in Andhra Pradesh, following a power purchase agreement (PPA) between its renewable energy arm, Essar Renewables Ltd (ERL), and state-owned NHPC Ltd.

The project will combine solar and wind power generation with Battery Energy Storage Systems (BESS) to ensure a more reliable and continuous supply of renewable electricity, the company said in a statement.

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The investment is part of Essar Power's plan to develop an energy portfolio of around 5 GW, spanning renewable, thermal and gas-based power generation.

"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," said Srinivasan Vaidyanathan, Operating Partner - Infrastructure, Essar Group.

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Ankur Kumar, CEO of Essar Power, said the agreement would strengthen the company's renewable energy portfolio across solar, wind and battery storage.

"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.

With this project, Essar Renewables' total awarded capacity from renewable energy tenders secured through central public sector undertakings NHPC and SJVN stands at around 1 GW, according to the company. The latest agreement adds to its efforts to expand its presence in India's clean energy market.

NHPC, a Navratna public sector enterprise under the Ministry of Power, is the country's largest hydropower development organisation. The company has also diversified into solar and wind energy as part of its broader renewable energy expansion.

The project comes amid rising demand for electricity and efforts to improve the reliability of renewable power. And, unlike standalone solar and wind projects, FDRE projects use a combination of generation sources and storage systems to manage fluctuations in supply and provide more predictable power to the grid.

India has set a target of achieving 500 GW of installed electricity capacity from non-fossil fuel sources by 2030. The expansion of battery-backed renewable energy projects is expected to support the integration of variable solar and wind power into the national grid while addressing concerns around grid stability and energy security.