Tata Power may Run Mundra Plant at Low Capacity to
Trim Losses
RACHITA PRASAD & JWALIT VYAS MUMBAI
With no immediate relief in sight on the tariff hike sought by Tata Power for its Mundra ultra mega power project (UMPP), the company is preparing contingency plans to minimise loss from running the plant as the cost of imported coal from Indonesia has risen sharply and unexpectedly.
The Tata Group utility plans to run the 4,000
megawatt Mundra unit at low capacity, of around 72-78%, and is considering
blending the fuel with cheaper coal of low calorific value to reduce cost of
generation, company’s management told equity research analysts at a meet on
Monday. This would lead to lower power supplies to Gujarat, Maharashtra,
Punjab, Haryana and Rajasthan, which are in pact to buy power from the unit at
. 2.26 a unit. “If the Indian government does not allow this cost to pass
through, the company can face a loss of up to $100 million,” S Ramakrishnan,
executive director (finance), said at the meet.
Tata Power has approached the ministry of power
expressing its concerns over the viability of tariff and seeking an increase in
rates to pass on the impact of escalating prices of coal imported from
Indonesia to customers.
Indonesian government has linked price of coal
exported by the country to an international coal price benchmark with effect
from September 23 that would bring the price of coal from the country at par
with the market rate, making it almost 150% more expensive than the earlier
price.
Source: ET
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