Mundra Ultra Mega Power Plant 3.04

Mundra Ultra Mega Power Project is a subbituminous coal-fired power plant in Tunda village at Mundra, Kutch district, in Gujarat, India. The coal for the power plant is imported primarily from Indonesia. The source of water for the power plant is sea water from Gulf of Kutch. The power plant is owned by Tata Power. The special purpose vehicle Coastal Gujarat Power Ltd was incorporated on 10 February 2006.CapacityThe capacity of the project is 4,000 MW with 5 units of 800 MW each.TechnologyThe plant uses super-critical boiler technology. Compared to other sub-critical plants in India, Mundra UMPP would use 1.7 million tonnes of less coal per year while generating the same quantum of power. Boilers are supplied by Doosan and turbines are supplied by Toshiba.BuyersTata Power entered into a power purchase agreement for the sale of the 4,000 MW capacity of the plant.In January 2013, the company terminated the PPA with the Rajasthan distribution companies - Jaipur Vidyut Vitaran Nigam, Jodhpur Vidyut Vitaran Nigam and Ajmer Vidyut Vitaran Nigam - due to non-compliance on payment security related issues and consistent failure on the part of the discoms as procurers to fulfill their obligations, including collateral arrangements. The company will now have to option of selling the power in the merchant market.Controversy over power tariffTata Power won the project through a competitive tariff based bidding route in 2006 by quoting 55% of the fuel cost as a non-escalable component and a levellised tariff of Rs 2.26 per kWh or unit. The Indonesian government’s decision in 2010 to change its mining law to bring coal price exported from Indonesia in line with the international market caused an increase in coal price and under-recovery of costs at Mundra UMGPP (and similarly impacted Adani Power's 4620 Mw Mundra plant). The loss led to an erosion of Tata Power's net worth by over 3800 crore in 3 years. The company had accordingly petitioned the Central Electricity Regulatory Commission for compensatory tariff hike, and later for compensatory relief.