Adani's new coal plant in Bihar: A Re.1 land deal, amid real environmental concerns

In a move that has sparked both economic optimism and environmental concern, Adani Power has secured the development of a 2,400 MW greenfield thermal power plant in Bhagalpur, Bihar.

The project, which represents the company’s largest investment in the state at an estimated Rs 27,000 crore, was awarded following a competitive bidding process by the Bihar State Power Generation Company Ltd (BSPGCL).

Adani Power emerged as the lowest bidder, agreeing to supply electricity to the North Bihar Power Distribution Company Ltd (NBPDCL) and the South Bihar Power Distribution Company Ltd (SBPDCL) at Rs 6.08 per unit for 33 years.

The facility will consist of a 3 × 800 MW ultra-supercritical plant, designed to use advanced, low-emission technology for coal-based power generation.

The company claims the plant will provide reliable, competitively priced electricity, while supporting industrial growth and generating thousands of jobs — estimated at 10,000–12,000 during construction and 3,000 once operational.

Ironically, the Adani Group is also a major player in the coal industry, both in India and globally. It is involved in coal mining, trading, and transportation, including operating mines as a mine developer and operator (MDO) for government-owned utilities. 

Adani also imports coal, particularly from Indonesia, and has faced scrutiny regarding its coal-related activities, including environmental concerns and allegations of wrongdoing. 

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Another of its coal mines in Queensland, Australia — also cheaply obtained land — apparently failed to generate the promised employment, locals have alleged.

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However, the Bihar project has raised significant controversy over its land acquisition, in the first place — long before it can be built and operated.

Adani Power has been allocated 1,020.60 acres across five mouzas of Pirpainti — apparently for a token amount of just Re.1 per year — for 33 years. The land was acquired from 856 local farmers, with compensation still pending for a good portion of it.

Critics argue that such an arrangement highlights the imbalance in bargaining power between large private corporations and local landholders, raising concerns over displacement, loss of livelihoods and environmental impact.

Environmentalists have also expressed reservations about the plant’s coal-based nature. While Adani Power emphasises the use of ultra-supercritical technology to reduce emissions, coal-fired plants remain major contributors to greenhouse gas emissions and local air pollution, potentially affecting public health in surrounding communities.

Officials noted that the plant will source coal from the Rajmahal block in Jharkhand and draw 60 cusecs of water from the Ganga river, further raising questions about resource utilisation and environmental sustainability.

The project, awarded just ahead of Bihar’s state elections later this year, is seen as strategically significant for the state’s industrial growth — and for the central government’s and the ruling state government’s political interests. Gautam Adani, a highly visible ally of prime minister Narendra Modi over the years, revived his investment plans following delays linked to a US probe last year.

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While proponents point to employment opportunities, industrial development and competitive electricity rates, critics caution that the environmental costs and the unusually favourable land deal could overshadow these benefits.

The allocation of land at Re.1 per year remains a particularly sensitive issue for locals, highlighting the need for transparency and careful management of the concerns of those directly affected, in particular.