On Monday, a high-level inter-ministerial panel will take a call on fuel supply for Adani Power’s Rs 25,000-crore imported coal-based power plant at Mundra in Gujarat. The infrastructure and mining major had asked the government to review an earlier decision to cut off domestic coal supply for the flagship 4,620 megawatt (Mw) project. The world’s largest coal-based power plant is already struggling to survive at the back of pricing problems.
“The Standing Linkage Committee (SLC) for the power sector, in its meeting on January 7, may take a view on the request of Adani Power for restoration of a decision for grant of 30 per cent linkage for their Mundra plant,” said a senior coal ministry official. Headed by the ministry’s additional secretary, Zohra Chatterjee, the SLC has officials from the Planning Commission, power, coal and rail ministries, and Coal India Chairman S Narsing Rao as members.
The plant has been built to consume up to 30 per cent domestic fuel blended with imported coal. In January 2010, the panel had decided to grant coal linkage to the project to meet 30 per cent of requirement from state-owned Coal India Ltd. However, that decision was reviewed in April 2011 after the miner refused to meet the commitment, arguing domestic coal supply for imported coal-based stations was not factored in the Planning Commission’s estimate given to it.
At the back of uncertainty in imported coal supply for such projects, the power ministry had favoured supplying coal to these.
Later, in February 2012, the panel had asked the power ministry to clarify the change in situation on imported coal and justify the change in the April 2011 decision, according to the coal ministry.
The power ministry had then informed that Adani Power has got a technical study done.
This showed the plant was running on low plant load factor (PLF) as it was designed to use 30 per cent indigenous blended coal, which was not available. The plant has been running at a PLF between 80 per cent and 85 per cent this year. The power ministry has recommended restoration of the original 30 per cent domestic linkage for imported coal-based plants.
Later this week, the Central Electricity Regulatory Commission (CERC) is likely to hear Adani Power’s petition seeking a rise in rates for supply of power generated at Mundra. A similar petition by the country’s largest private power producer, Tata Power, seeking rate hike for its showcase Mundra ultra mega power project (UMPP) will also come up for hearing.
Both Adani Power’s project and the Mundra UMPP have been facing rising cost of imported fuel after last year’s regulatory changes in coal-exporting. Indonesia and Australia made coal dearer for these plants, leading to jacking up of generation cost. Their buyers, however, have refused to bear higher charges. Adani Power had signed two power purchase agreements (PPAs) with the Gujarat government for supply of power at Rs 2.3 a unit and Rs 2.8 a unit. Another PPA was signed with Haryana for supply at Rs 2.9 a unit. When contacted, a company spokesperson refused to comment. Currently, Adani Power has a power generation capacity of 5,320 Mw, including 4,620 MW from the Mundra project and 660 Mw from the Tiroda power plant in Maharashtra. A second 660-Mw unit of the Tiroda plant is likely to be commissioned shortly. Overall, the company plans to ramp up generation capacity to 10,000 MW by the end of 2013.
The company’s share price at the Bombay Stock Exchange on Friday closed at Rs 62.60, down one per cent compared to the previous day’s close.