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Tata Power may not source coal from Indonesia for Mundra

Company plans to expand the capacity of its Mundra project by 1,500 MW by adding two units

Press Trust of India  |  New Delhi 

Tata Power may cut dependence on Indonesian coal and explore other geographies to source the fuel for expansion of its 4,000 MW Mundra ultra mega power project in Gujarat.

The company owns stake in KPC mining company in Indonesia which owns and operates coal blocks in the island nation.

"It (import) could be from any market globally because after the HBA price regime was implemented in Indonesia, we get no advantage at all from ownership," Tata Power Managing Director Anil Sardana told PTI.

He said the coal for Mundra project expansion can be sourced from any other country and any other mine because one gets it at the market-determined price.

HBA price of Indonesia is the monthly coal reference rate which is calculated on the monthly average of four international coal indices.

"The expansion was on the assumption that the units will be linked to market phenomenon and we would be using imported coal," Sardana said.

The company plans to expand the capacity of its Mundra project by 1,500 MW by adding two units.

As per the original plan layout prepared by the Central Electricity Authority (CEA) there is space for space for two additional units.

"Since water is there, evacuation is there, every other facility is there and it makes sense for one to generate electricity at a cheaper price," Sardana said, adding that where else can one expect imported coal-based power being generated at less than Rs 3.

On whether the company would go ahead with the proposed expansion of the Mundra despite little clarity on the issue of compensatory tariff, Sardana said, "The compensatory tariff issue is only concerned with UMPP. As far as the two additional units are concerned, they will be at market prices, so therefore the two phases are completely different."

Central Electricity Regulatory Commission earlier this year asked the power procurers to pay Rs 329.45 crore as compensatory tariff for the Mundra plant to partly offset escalation in the price of imported coal.

First Published: Sun, November 30 2014. 10:40 IST