Coastal Gujarat Power Ltd , a subsidiary of Tata Power and Adani Power Mundra Ltd, have signed long-term power purchase agreements with GUVNL to supply 1,800MW and about 1,200MW respectively from their imported-coal fired power projects at Mundra. The companies recently stopped supplying power to GUVNL at the contracted rates, citing unprecedented rise in imported coal prices over the last few months that have made their projects unviable.
In mid-October, when the stock of coal held by the country’s power plants were critically low, Gujarat government agreed to buy power from CGPL and APMuL at a fixed cost of Rs 4.5 per kwh or unit.
“The earlier deadline was till November 5. This has been extended to December 31 looking at the present exigency and critical power supply position in the state and the interest of consumers and public at large,” said a government official close to the development.
The state’s energy department has recently extended approval for off-taking of contracted power at fixed energy charge of Rs 4.50 per kwh and capacity charge as per the PPAs and supplementary PPAs as a purely temporary arrangement for a period up to December 30, as requested by GUVNL, said sources in the state government.
“GUVNL has allowed companies to supply at revised tariff rates for another month. A final decision on whether to give further extension or not will be taken later depending on the state’s power scenario,” said another government official.
As per the PPAs with Tata Power and Adani Power, the fixed energy charge is less than Rs 2.50 per kwh, according to sources.
“Indonesian coal prices, which have been the main concern for imported coal fired power plants in the country, had shot up from $80-90 per tonne to over $200 per tonne recently. They are now showing signs of cooling down,” said an industry expert.
Over the past few months, the country has been staring at a power crisis with a large number of thermal power plants across the country being shut down or working at lower capacities due to domestic coal supply problems. The deficit was highest in the month of October when it reached 20-25% of the state’s power demand on many days.
In October, GUVNL purchased about 4,000MW power per day worth Rs 1,931 crore from the Indian Energy Exchange (IEE), the country’s power trading platform, with a weighted average of Rs 9.69 per Kwh, according to IEX data. In comparison, it bought power worth Rs 1,035 crore from the exchange for September.
“The state’s power bill from IEE started going down from mid-October, after it resumed buying power directly from Tata and Adani,” said sources. Officials of Tata Power and Adani Power declined to comment.