Adani Group’s Controversies Might Impact India’s Transition to Clean Energy3-mins read

The push to get into renewable energy is gaining ground around the world. One of the biggest examples recently is India, when the country announced an incentive to make solar components for interested firms. Bidders emerged immediately thanks to the multibillion-dollar incentive, but Adani Group — the country’s corporate behemoth that dominates the sector — was not among them.

India’s Green Transition: The Context

India has been making significant efforts towards renewable energy and the green transition in recent years. In fact, India has set itself an ambitious target of achieving 450 GW of renewable energy capacity by 2030. This includes 280 GW of solar energy, 140 GW of wind energy, 10 GW of biomass energy, and 5 GW of small hydro energy.

Some of the steps taken by India towards achieving this target include:

1. Setting up large-scale solar parks: India has set up several large-scale solar parks with a combined capacity of more than 40 GW. These parks are spread across several states and are designed to provide a conducive environment for the development of solar power projects.
2. Promoting wind energy: India has also been promoting wind energy by offering incentives to investors, streamlining the permitting process, and creating a favorable policy environment for the development of wind energy projects.
3. Encouraging rooftop solar: India has launched several initiatives to encourage the adoption of rooftop solar by households and businesses. This includes subsidies, tax incentives, and net metering policies.
4. Focusing on energy storage: India is also focusing on energy storage to ensure that the energy generated by renewable sources can be stored and used when needed. The government has launched several initiatives to promote the development of energy storage technologies.
5. Promoting electric mobility: India is also promoting electric mobility by offering incentives to manufacturers and buyers of electric vehicles, setting up charging infrastructure, and creating a favorable policy environment for the development of electric vehicles.

Overall, India is making significant progress towards renewable energy and the green transition, but there is still a long way to go. The government needs to continue to focus on policy and regulatory reforms, provide financial incentives to investors, and invest in research and development to achieve its ambitious targets.

Adani, India’s Leader in Clean Energy, Accused of Fraud

The group has been making solar equipment in India for years, ever since it set up its gigantic factory in 2016. Then, in 2017, it managed to triple its capacity for building solar panels, and it even started making silicon materials required for converting the sun’s rays into electricity. According to Premier Energies’ managing director, Chiranjeev Saluja, the company was expected to bid in a large way. However, it did not participate at all.

Adani Group has recently been involved in controversy, when, in late January 2023, a short-selling company Hinderburg Research claimed that Adani has engaged in fraud and stock price manipulation. The claim spooked investors, who immediately started dumping tens of billions of dollars of the company’s shares.

Meanwhile, the firm’s supposed proximity to Narendra Modi, India’s Prime Minister, became one of the hottest topics in the country’s political circles. The group also has a major stake in the clean energy future of India, as its renewable energy ambitions account for around 10% of India’s total clean energy goals.

India’s Progress Toward Clean Energy Will Continue Without Interruption

Despite the stain on the Group’s reputation, some analysts believe this will not affect India’s upcoming energy transition. Particularly when it comes to medium and long term. The opinion is that even if a major government-favored player such as Adani is forced to scale down, there are more than enough of others willing to step up and become market leaders.

The end result is the clean energy sector that will be just as competitive and rich in investments and projects. Of course, Adani Group still has a massive influence on the lives of millions of people in India. The company runs airports, builds roads, and it even operates some of India’s largest ports. Not to mention its contributions in building defense equipment, and selling cooking oil.

Interestingly, the founder, Gautam Adani, originally made his fortune in the ‘90s when he was betting on coal while India was severely energy-starved. In modern times, however, he decided to switch to clean energy, with the goal of becoming the biggest player in the renewable energy sector by 2030. The controversy may put a stop to it, however, especially since the group has also lost its ability to raise funds for its ambitious expansion projects.

Despite its interest in renewable energy, however, Adani Group has continued to seek new fossil fuel projects, which has put more pressure on the Indian government to deliver a fossil fuel agenda. Meanwhile, the pressure to reliever on renewables is significantly lower.