Mundra Ultra Mega Power Project

The Tata Mundra Ultra Mega Power Project ( referred to  ‘Mundra Ultra Mega Power Project’) is a 4000 megawatt (MW) power station, comprising five 800MW units. The first unit was commissioned in March 2012, the second in July 2012, the third in October 2012, the fourth in January 2013 and the fifth and last unit in March 2013. The power station is located in Gujarat, India.

The power station is one of nine Ultra Mega Power Projects the Indian government wants to be built by private sector companies before 2017. The first 800 MW generating unit was commissioned in March 2012. The second 800MW unit was commissioned in July 2012. Units 3 was commissioned in 2012, and Units 4-5 were commissioned in 2013.

The power station is owned by Coastal Gujarat Power Limited (CGPL), a wholly owned subsidiary of Tata Power. The power station is located south of Tunda Wand village in Mundra Taluka, Kutch district of Gujarat, India.

In August 2014 the  Supreme Court of India stayed a planned rate hike for the plant, and minutes from a July 31-August 1 meeting of the Ministry of Environment and Forests’ (MoEF) Expert Appraisal Committee revealed that the EAC refused to greenlight the 1,660 MW expansion of Tata Mundra, citing the company’s failure to meet the conditions set in the existing Environmental Clearance (EC) for the project. The EAC called for a site visit by a sub-committee for compliance of conditions stipulated in the environment clearance and detailed action plan along with budgetary provisions for a public hearing.

Project Details

Sponsor: Coastal Gujarat Power Limited (CGPL)
Parent company: Tata Power Company Limited
Location: Tunda Wand village, Mundra taluk, Kutch district, Gujarat
Coordinates: 22.8158, 69.5281
Status: Unit 6: Shelved, Unit 7: Shelved
Capacity:

  • Unit 1: 800 MW
  • Unit 2: 800 MW
  • Unit 3: 800 MW
  • Unit 4: 800 MW
  • Unit 5: 800 MW
  • Unit 6: 830 MW
  • Unit 7: 830 MW

Type: Supercritical
Projected in service: Units 6 and 7
Coal Source: Indonesia and elsewhere
Permits and applications: Units 6 and 7: Terms of Reference, India MoEF, Dec 28, 2011

Tata’s financial viability

In late May 2012 Tata announced a huge loss for the 2011/2012 financial year. The Business Standard stated that the company had been “battered by the huge provision for the 4,000-Mw Mundra power project.” In response to its financial crisis Tata has been lobbying the Indian government to allow the increased costs of imported coal to be passed through to customers.

As a part of its lobbying pressure on the Indian government Tata has announced that it will suspend work on all its other power stations relying on imported coal. This particularly affects the Coastal Maharashtra Project, a proposed 2400 megawatt (MW) coal plant in Maharashtra state. “As of now we have put all our imported coal plans on hold,” Tata’s Chief Financial Officer S. Ramakrishnan told Reuters. The expansion, he said, will be “subject to the (Indian) government coming out with an appropriate policy on how the issue of imported coal price will be handled and how the export restrictions that are being brought in by the export countries ultimately settle.”

Tata Power’s Managing Director, Anil Sardan, said in a June 2012 interview with the Business Standard that “we are doing everything possible like blending the fuel with cheaper Indonesian coal on which we get a higher discount. Today, we are already burning 50 per cent of very low-grade coal — which is much more than our original plan. The plant load factor is 90 per cent. We have also asked for domestic coal as a solution. There are some other options as well.”

While Tata is lobbying the Indian government, the outcome is far from certain. The Ministry of Power has referred the request for increased costs to be passed through to theCentral Electricity Regulatory Commission (CERC), which has not yet reached a decision. However, a decision to allow Tata to increase its recovered price may be subject to legal challenge. “Even if CERC rules in favour of Tata Power, it’s not going to bring any immediate relief as other bidders in the race and state electricity boards (SEBs), who have signed PPAs (power purchase agreements) with Tata Power, are bound to challenge the order,” a Mumbai-based analyst told Livemint.com on condition of anonymity.

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