Manufacturing

Gujarat government agrees to buy from Tata Power Mundra UMPP

It is reported that the cost that the Gujarat government will pay to Tata Power’s subsidiary Coastal Gujarat Power Limited, is higher than the cost stated in the agreement of purchasing power.

Amid the reported coal shortage and imminent electricity crisis, Gujarat has stepped forward to buy power from Tata Power’s Mundra UMPP (Ultra Mega Power Plant). Gujarat government has agreed to purchase 1800 MW of power at the rate of Rs. 4.5 per unit for over four weeks. 

The latest announced decision of purchase by the Gujarat government came after Punjab agreed to buy power from Mundra at Rs. 5.5 per unit for a fortnight. 

Energy Minister Kanu Desai confirmed that there will be no power shortage in Gujarat ahead of Diwali. The up-to-date move by the state government will cut down the burden of purchasing spot electricity valuing Rs. 150 crore daily. 

It is reported that the cost that the Gujarat government will pay to Tata Power’s subsidiary Coastal Gujarat Power Limited, is higher than the cost stated in the agreement of purchasing power. 

One of the state officials unveiled the choices the state government had saying that either they had to keep the plant closed and purchase power at Rs. 15 to Rs. 17 per unit from the power exchanges, or buy the same at a fixed rate of Rs. 4.5 per unit. 

As reported by the Indian Express, Gujarat’s 6400 MW of thermal and gas-fired power plants are not functioning as the prices of imported coal as well as natural gas are on a noticeable surge. This pushed the Gujarat government to make a purchase of 100 million power units from the power exchanges daily costing around Rs. 150 crore as mentioned before. However, with the latest agreement between Gujarat and Tata Power will contribute in reducing the burden on the state government by Rs. 65 crore a day.

K K Bajaj, the energy expert disclosed that Gujarat had an agreement of power purchase with Tata Power to buy about 1800 MW of power at a variable cost of Rs. 2.26. 

Mundra Ultra Mega Power Project is a sub-bituminous coal-fired power plant located in Gujarat, India. It is considered as India’s third largest functional power plant. The coal for operating the power plant is imported primarily from Indonesia. Mundra UMPP is owned by Tata Power, a division under conglomerate giant Tata Group. 

Mumbai-based Tata Power Company Limited is India’s largest integrated power establishment. It has its operations spread across countries including India, Indonesia, Singapore, Bhutan and South Africa. In India, Tata Power has its operations based in over 35 locations. 

Founded in 1919, Tata power has its equity shares listed on the BSE (Bombay Stock Exchange). 

Apart from Mundra Ultra Mega Power plant, Tata Power operates other major power plants including Trombay Thermal Power Station, Maithon Power Plant and Jojobera Power Plant.

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