Mundra Ultra Mega Power Plant

Mundra Ultra Mega Power Project
Location of Mundra Ultra Mega Power Project in Gujarat
Country	India
Location	Tunda village in Mundra, Kutch district, Gujarat
Coordinates
Status	Operational
Construction began	2007
Commission date	2012-2013
Owner(s)	Tata Power
Operator(s)	Coastal Gujarat Power Ltd.
Thermal power station
Primary fuel	Subbituminous coal
Power generation
Units operational	5 X 800 MW
Make and model	Toshiba, Doosan
Nameplate capacity	4,000 MW

Mundra Ultra Mega Power Project (Mundra UMPP) 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 (CGPL) was incorporated on 10 February 2006.

Capacity

The capacity of the project is 4,000 MW with 5 units of 800 MW each.

Stage	Unit Number	Installed Capacity (MW)	Date of Commissioning
1st	1	800	March 2012
2nd	2	800	July 2012
3rd	3	800	October 2012
4th	4	800	January 2013
5th	5	800	March 2013
Total	Five	4000

Technology

The 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.

Buyers

Tata Power entered into a power purchase agreement for the sale of the 4,000 MW capacity of the plant.

State	Contracted Capacity (MW)
Gujarat	1,805
Maharashtra	760
Punjab	475
Rajasthan	380
Haryana	380
Non-PPA	200
Total	4000

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 tariff

Tata 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 company is now requesting Central Electricity Regulatory Commission to allow hike to about Rs 3.00 per unit to factor in increase in price of coal imported from Indonesia following the Indonesian government’s decision to change its mining law to bring coal price in line with the international market.

The company has petitioned the CERC to rule whether the company can claim relief under any/all of the following:

• Article 13 of the PPA due to Change in Law

The company stand is that that the definition of law under the PPA is an inclusive (and not exhaustive) definition. The definition of law covers ‘any law’ and is not restricted to Indian law. The term ‘law’ is required to be interpreted in a contextual basis with a view to give business efficacy to the PPA since the project is based on imported coal and the fuel supply arrangements are a part of the Project Documents. The definition of Law must be given a plenary meaning and cannot be read down by confining it to Indian laws. The promulgation and enforcement of ‘Regulation of Ministry of Energy and Mineral Resources No. 17 of 2010 regard procedure for Setting Mineral and Coal Benchmark Selling Price’ dated 23.09.2010 by Government of Indonesia ("Indonesian Regulations") led to an unprecedented, uncontrollable and unforeseeable rise in coal prices which constitutes a ‘Change in Law’ under the PPA.

• Article 12 of the PPA, pertaining to Force Majeure

The definition of Force Majeure under Article 12.3 of the PPA covers "any event or circumstance or combination of events or circumstances that wholly or partly prevents or unavoidably delays an Affected Party in performing its obligations under the PPA to the extent such events or circumstances are not within the reasonable control, directly or indirectly of the Affected Party and could not have been avoided if the Affected Party had taken reasonable care". Tata Power is arguing that the promulgation of the Indonesian Regulation is an event which is beyond its control and has made it impossible for the company to perform its obligations as per the contracted price. So this is covered as a Force Majeure event under Article 12.3 of the PPA.

• CERC's power to 'regulate' tariff by exercising its powers under Section 79(1)(b) of the Electricity Act, 2003.

Tata Power is arguing that CERC has the power under Section 79(1)(b) of the Electricity Act, 2003 to revisit/restructure the tariff for a power project if the project has lost its viability and it has become commercially impossible for the project owner to perform its contractual obligations.

On 18 July 2012 the Central Electricity Regulatory Commission deferred a decision on Tata Power's petition. Central Electricity Regulatory Commission has asked the company to go back and take recourse to the dispute resolution provisions of the power purchase agreement (PPA) before seeking relief from the Central Electricity Regulatory Commission.

On 25 October 2012 the CERC admitted the petition for hearing since the consultative process under Article 17.3 of the Power Purchase Agreement (PPA) between Coastal Gujarat Power Ltd and the lead procurer, Gujarat Urja Vikas Nigam Limited (GUVNL) had failed. The petition will now be renotified for hearing on 4 December 2012. On 4 December 2012 the CERC heard the submissions of the petitioner, Coastal Gujarat Power Limited and the respondents and scheduled the next hearing for January 10, 2013

See also

• Ultra Mega Power Plants (India)
• Mundra Thermal Power Station owned by Adani Power