1. After SC rejects claims, Adani Power, Essar Power, Tata Power cut supply to Gujarat Urja Vitran drastically

After SC rejects claims, Adani Power, Essar Power, Tata Power cut supply to Gujarat Urja Vitran drastically

Adani Power, Tata Power and Essar Power have drastically cut supply of power to Gujarat Urja Vitran Nigam (GUVNL).

By: | New Delhi | Published: May 12, 2017 6:44 AM
Adani Power has restricted power supply from its Mundra plant to Gujarat. (Reuters)

Adani Power, Tata Power and Essar Power have drastically cut supply of power to Gujarat Urja Vitran Nigam (GUVNL). The development comes after the Supreme Court rejected claims of Adani Power and Tata Power to recover compensatory tariffs for rise in imported coal prices. The ruling had more impact on Adani Power as it had already recognised the compensation fully in the books for FY16. Power supply by the three companies to GUVNL will now be 2,650 MW less than earlier.

Adani Power has restricted power supply from its Mundra plant to Gujarat. According to sources in the GUVNL, Adani Power started to reduce power supply to the state in a phased manner from April 27. The company told GUVNL that the step was taken as operating the Mundra plant at the tariff specified in the power purchase agreement (PPA) using imported coal is increasingly becoming unviable.

According to sources privy to the matter, Essar Power has stopped supply of 600 MW of power from its Salaya plant in Gujarat to GUVNL as it believes non recognition of higher tariff for its review petition will lead to no cash flows available with the company for servicing of interest and principal repayments. Tata Power is said to have stopped supply of 800 MW from one of its unit at Mundra as well. When contacted the spokesperson of Tata Power was not available for comment.

At present, Adani Power is supplying 750 MW to Gujarat against 2,000 MW stipulated earlier. The company has not intimated GUVNL on further supply cuts, sources told FE. In 2007, Adani Power signed two PPAs (of 1,000 MW each) with GUVNL to supply power at levelised tariffs of `2.89/unit and `2.35/unit.

Three 660 MW units at Adani’s 4,620 MW Mundra plant are presently under short-term outage due to coal shortage. One 600 MW unit of Essar’s 1,200 MW Salaya coal plant is shut as it is undergoing planned annual maintenance. 1,600 MW of Tata’s 4,000 MW Mundra plant is under outage as well due to maintenance. All these plants were designed to run on imported coal.

GUVNL is making up for the shortages by increasing generation from the state owned plants of Gujarat State Electricity Corporation. It is also purchasing additional power from the open market through power exchanges.

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