Tata Power to expand capacity at Mundra UMPP

28 May 2013


Tata Power Company Ltd, which runs the 4,000 MW ultra mega power project at Mundra in Gujarat, aims to hike capacity of the plant by 1,600 MW.

The private power producer is looking at adding two units of 800 MW each expanding the overall capacity of the Mundra power plant project from 4,000 MW to 5,600 MW, according to Krishna Kumar Sharma, executive director and chief executive officer of Coastal Gujarat Power, the Tata Power company running the power station.

However, the electricity generated from the new 1,600 MW capacity would, be sold at a different tariff from the existing rate for 4,000 MW. The Tata Group company bagged the UMPP project through competitive bidding in 2006, quoting a levelised tariff of Rs1.26 a unit for 25 years.

Sharma said, the two units were not covered through any existing arrangement for pricing and could thus participate in any new case-I bidding with imported coal. The cost of generation would depend on type of coal and capital costs after completion of the units, he added.

The new units, based on imported coal, would be set up within the same 1,300 hectare area allocated to the mega power project. Currently, five units of 800 MW are operational that sell electricity to Rajasthan, Gujarat, Punjab, Haryana and Maharashtra.

Meanwhile, Tata Power Co Ltd would avoid large acquisitions and was holding back on new investments until the Indian utility had clarity on a regulatory decision allowing tariff increases, its executive director for finance said today.

In April, the electricity regulator allowed Tata Power, to increase tariffs for power from its Mundra plant in Gujarat to compensate for the rising cost of coal from Indonesia.

However, the decision by the Central Electricity Regulatory Commission (CERC) has yet to be implemented as the company would need to discuss with the states to which it supplies electricity to decide on a mutually acceptable price rise.

A similar decision in the case of Adani Power Ltd has been legally challenged and industry experts fear the project may be bogged down in a long running dispute.

According to company sources, the financial pressure on the company arising out of the Mundra situation was enormous at the present juncture.

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