Godda, in the Indian state of Jharkhand, is surrounded by the country’s most productive coal mines. It will soon also be home to the Adani group’s latest coal-fired power station, a plant built for the sole purpose of sending energy across the border to Bangladesh.
Adani has framed its planned 1,600-megawatt Godda power plant as a humanitarian venture. In a statement to Guardian Australia, the company said it had acted “in the large interests of our neighbours, the people of Bangladesh” by inking the deal.
But market analysts say the supply agreement is anything but benevolent. The tariffs quoted by the Bangladesh Power Development Board are about double the current cost of solar and wind power in India. Tim Buckley, a former head of equity research at Citigroup and now an analyst with the pro-renewable energy group the Institute for Energy Economics and Financial Analysis (IEEFA), says there is a more obvious reason for Adani to build Godda: to prop up the prospects of the proposed Carmichael mega mine in Queensland.
Two deadlines for Adani to finance Carmichael have come and gone. Buckley said potential investors had balked, partly because there were no “bankable” off-take agreements in place. Effectively, Adani has nothing concrete to demonstrate that it can sell, and profit from, the high-ash coal it plans to extract from the Galilee basin.
Adani did not respond directly to a series of questions asking the company to outline specific plans and agreements for Carmichael coal. It said in a statement that “as a significant coal trader in the region, Adani is well-placed to secure customers for Carmichael coal both from within the Adani group of companies and outside the group.”
Despite Godda’s proximity to India’s coal heartland, Adani would have to import coal to the new plant. Buckley estimates the 700 km—and 8 km/h—train journey to Godda from the coast would add US$16 a tonne to the cost of coal to fuel the new plant, relative to a coastal power plant. He says the deal is clearly not in the interests of Bangladesh, which would bear the costs of imported coal and unnecessary transport. Buckley said the country could import power more cheaply by seeking fuel-agnostic competitive tenders from the Indian market.
“Godda would lock Bangladesh into expensive electricity with high emissions at a time when cleaner, cheaper alternative sources of energy are rapidly being deployed across India,” Buckley said.