Informist, Tuesday, Oct 19, 2021

By Sunil Raghu

AHMEDABAD - Tata Power Ltd has started supply of electricity to the Gujarat government with 1,000 MW from its 4,150-MW super critical Mundra power plant from Monday, sources told Informist.

Tata Power had entered into an understanding with the state government to sell up to 1,800 MW a day at 4.5 rupees a unit for four weeks, to help the state tide over a temporary power shortage owing to non-availability of coal, according to sources. The company already has in place a power purchase agreement with Gujarat to sell electricity at 2.26 rupees a unit from its Mundra plant.

A senior state government official said Tata Power imported coal for Mundra and had coal inventory for nearly a month, compared to four-five days in the case of most thermal power plants in the country.

"So, when we sought power, Tatas agreed to give it at a price of coal it had purchased at, rather than the current market price," the official said.

Though Tata Power had a long-term power purchase agreement, it wasn't selling even a single unit from the plant to Gujarat, as its cost was much higher.

To tide over the current coal and power crises, Gujarat was buying electricity from the spot market, spending nearly 1.5 bln rupees a day. While the price of 4.5 rupees a unit from Tata Power's Mundra plant may seem higher than the cost in the power purchase agreement, it is expected to help the Gujarat government save nearly 850 mln rupees a day through the coming four weeks, sources said.

Adani Power Mundra Ltd has also begun supply of 1,200 MW of power from its 4,000-MW Mundra power plant since Monday. The company is also supplying power to the state government at 4.5 rupees a unit, a company official said.

Like Tata Power, Adani Power too did not supply power to Gujarat despite having inked a separate power purchase agreement, due to higher prices of imported coal. The agreement for Adani Power is stated to be till the first week of November, unlike Tata Power which is likely to supply power for four weeks.

At 1055 IST, shares of Tata Power were trading 4% lower at 247 rupees, and those of Adani Power were 7.4% higher at 132 rupees on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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