Adani Green’s Bold Push to Quadruple Renewable Energy Capacity by 2030 – But Can It Find Enough Buyers?

Adani Green Energy Ltd is making big investments to grow its renewable energy capacity, aiming to increase it fourfold by 2029-30. Although the company has secured enough land to build large solar plants, it still needs to win contracts and find buyers to reach its goal.

Currently, Adani Green has 11.2 GW of capacity across solar, wind, and hybrid energy, and plans to add another 6 GW this financial year. Its target is to reach 50 GW by FY30, including 5.5 GW of energy storage through pumped hydro.

Emkay Research expects the company’s capacity to grow by 30% annually from FY24 to FY30, with its improved capacity use boosting sales by 35%. Emkay also predicts that Adani Green’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) will grow at 38% annually over this period.

Adani Green has leased a large land bank, enough to support over 65 GW of capacity, which should speed up project execution. Much of this capacity will be concentrated in Gujarat, where one site alone could generate up to 30 GW of solar and wind energy. This location benefits from strong sunlight and high wind speeds, allowing Adani Green to use up to 34% of its capacity, much higher than the industry average of 20%.

Selling in the Spot Market

Most electricity in India is sold through purchase agreements at fixed prices. However, Adani Green plans to sell about 15% of its renewable energy on the spot market, where prices can be higher if demand is strong. But there’s also the risk that they won’t find buyers.

Last year, Adani Green completed its projects ahead of schedule, allowing it to sell power on a temporary merchant basis until the purchase agreements start. In the June quarter, the company sold 21% of its power this way, contributing to 30% of its total revenue.

Despite this, the company’s EBITDA growth in the first quarter was only 23%, slower than the 48% growth it saw in FY24.

Spending and Investments

Adani Green’s capital expenditure is expected to reach ₹24,000 crore in FY25, after spending ₹17,000 crore in FY24. The company has announced that its total investment through FY30 will exceed ₹2.4 trillion.

At the end of FY24, its net debt-to-EBITDA ratio was high at 7.4x. However, with the launch of new projects and increased profits, this ratio is expected to drop to 5.5x by FY25.

The recent $444 million investment from France-based TotalEnergies is also expected to improve the company’s finances.

Over the past year, Adani Green’s stock has risen nearly 80%, driven by strong profit growth and a positive outlook. According to Bloomberg, the stock trades at an enterprise multiple of 15.2x based on expected earnings for FY26, which is considered fairly priced.

However, the company still needs to successfully deliver on its projects over the next few years to meet investor expectations.