HomeAsiaGujarat to buy power from Tata's Mundra plant at Rs 4.5 per...

Gujarat to buy power from Tata’s Mundra plant at Rs 4.5 per unit

Forced to buy spot power worth Rs 150 crore per day, the Gujarat government has now decided to buy 1800 MW of power from Tata Power’s Mundra plant in Kutch at Rs 4.5 per unit. Energy Minister Kanu Desai said that there will be no shortage of electricity in the state before Diwali.

The move is expected to ease the burden of procuring 4000-5000 MW of electricity per day from power exchanges.

The cost that the state government will pay to Coastal Gujarat Power Ltd, a subsidiary of Tata Power, which manages the 4150 MW supercritical power plant, is higher than the cost mentioned in the power purchase agreement.

“There were two options. Either keep the plant shut and continue to buy power from power exchanges at Rs 15-17 per unit, or buy it at a fixed price of Rs 4.5 per unit. The state government agreed to this purchase. A state government official said about power purchase from Mundra plant, which used imported coal as fuel and was not supplying power to Gujarat due to high cost of coal.

The official said the consent given is for a temporary period of four weeks. Indian Express Gujarat is currently facing a dire situation as 6,400 MW of thermal and gas-fired power plants are lying idle due to high prices of imported coal and natural gas. This situation with government thermal power plants operating at 50 per cent capacity has forced the state government to buy 100 million units of power on a daily basis from power exchanges, costing around Rs 150 crore.

When contacted, the power minister told The Indian Express, “The government has sorted out the power situation. We will make our plans public in a day or two. I assure that there will be no shortage of electricity in Gujarat till Diwali.

Energy expert KK Bajaj said the Gujarat government already had a power purchase agreement with Tata Power to buy 1800 MW of power at a variable cost of Rs 2.26. “At present, GUVNL is paying Rs 150 crore per day to buy power from power exchanges. With this move, the burden of the state government will be reduced by Rs 65 crore per day,” Bajaj said, adding that GUVNL should enter into similar agreements with Adani Power and Essar Power to prevent purchase of costly power from exchanges.

Adani’s plant in Mundra and Essar Power’s plant in Salaya use imported Indonesian coal to fuel their plants. These power plants have stopped supplying electricity to Gujarat after Indonesian coal prices doubled.

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