Essar Renewables Limited, the renewable energy arm of Essar Power, has signed a Power Purchase Agreement (PPA) with NHPC Limited for a 300 MW Firm and Dispatchable Renewable Energy (FDRE) project in Andhra Pradesh. Announced on November 4, 2026, the agreement is backed by an investment commitment of approximately ₹4,500 crore. The project will integrate solar generation, wind power and battery energy storage to supply renewable electricity with greater flexibility and dispatchability than standalone variable renewable energy installations.
The project’s defining feature is its hybrid configuration. Solar and wind generation can complement each other across different periods, while battery storage can retain surplus electricity and make it available when generation falls or demand rises. This combination is intended to improve the reliability of renewable power supplied to the grid. Under an FDRE arrangement, the developer is required to meet specified power-supply commitments rather than simply deliver electricity whenever the sun shines or wind conditions are favourable. The precise delivery schedule and technical performance obligations, however, depend on the PPA terms.
The agreement also advances a project that has been in Essar’s renewable energy pipeline since NHPC’s procurement process in 2024. NHPC’s monthly award records identify Essar Renewables among the selected developers for its 1,200 MW FDRE procurement, with 300 MW allocated to the company. The November 2026 announcement therefore marks a subsequent contractual milestone in the development of that awarded capacity.
Essar has announced an investment of around ₹4,500 crore for the Andhra Pradesh project. The scale of the proposed expenditure reflects the infrastructure required to combine multiple renewable generation sources with storage and associated grid-delivery systems. However, the company’s announcement does not provide a detailed allocation of the investment among solar facilities, wind installations, battery systems, transmission infrastructure or other project components.
The battery component is particularly important to the FDRE model. Unlike conventional renewable projects that primarily supply power according to immediate generation conditions, storage-backed projects can shift electricity from periods of surplus generation to periods when supply is required. This can help address the mismatch between renewable generation patterns and electricity demand. The company has not disclosed the battery system’s capacity in megawatt-hours (MWh), storage duration, technology or planned operating profile in the announcement. These details will be important in assessing the project's actual dispatch capability.
The project also fits into Essar Power’s broader plan to develop an approximately 5 GW diversified energy portfolio. The company’s stated strategy includes renewable energy alongside thermal and gas-based generation, rather than limiting its expansion to clean energy assets alone. Its January 2026 corporate presentation highlighted the renewable platform’s focus on combining solar, wind and energy storage to support round-the-clock power supply. The 300 MW NHPC-linked project represents one part of this wider portfolio.
For NHPC, the agreement adds another project to its efforts to procure renewable electricity through hybrid and dispatchable supply arrangements. Such procurement models are intended to address the limitations of intermittent generation and provide distribution utilities with more predictable renewable power. Their effectiveness will depend on the generation mix, storage availability, project execution and the developer’s ability to meet the contracted supply schedule.
The November 4 announcement confirms the PPA, proposed investment and project capacity, but leaves several implementation details undisclosed. The solar and wind capacity split, battery storage rating, tariff, construction schedule and expected commercial operation date have not been specified in the company announcement. These details will be necessary to evaluate the project's cost structure, storage contribution and expected role in Andhra Pradesh’s electricity supply.
Essar’s ₹4,500 crore commitment highlights the growing role of hybrid renewable projects in India's power procurement market. By combining solar, wind and battery storage under an FDRE contract, the project is intended to move beyond generation-led renewable supply towards electricity delivery aligned more closely with grid requirements. Its eventual contribution will depend not only on the installed 300 MW capacity, but also on the storage configuration and the project's ability to fulfil its contracted dispatch obligations.