Industry in darkness as Adani, Tata plants idle

Tags: News

Coal crisis severs 7,000 mw, Haryana, Gujarat worst hit

The highly industrialised states of Gujarat, Maharashtra, Haryana, besides mineral-rich states of Madhya Pradesh and Chhattisgarh are in the throes of a severe crisis following huge electricity shortages that have resulted from the forced shutdown of the ultra mega power plants of the Adanis and Tatas at Mundra, crippling almost 7,000 mw generation capacity since Wednesday afternoon.

This is in addition to over 34,000 mw generation capacities under forced idling across the country because of coal shortages.

India’s largest independent power producer Adani Power has shut production from its six units out of nine at Mundra power plant in Gujarat, since Wednesday afternoon, impacting supply of around 2,970 mw to the grid. Tata, which shut down two generating units at its 4,000 mw Mundra facility, said shutdowns were for technical reasons.

People close to the development told Financial Chronicle that two critical issued led to the shutdown at Adani Power – shortage of coal for three units of 330 mw each, and default of payment for three units of 660 mw each by the Haryana discom – the company has not been paid by the Haryana government for some time despite repeated reminders, hence the company was forced to take the extreme step.

Adani Power supplies most of the 4,000mw it generates from the Mundra plant to Gujarat and Haryana, and part of it is sold at merchant rates. Tata’s Mundra project supplies to Maharashtra, Gujarat, Rajasthan, Haryana and Punjab.

Officials at Adani Group declined to comment, while spokesperson did not respond to the phone calls. Tata Power said in a statement that its Mundra plant was maintaining the declared generation capacity.

A senior official of national load despatch centre (NLDC) without disclosing anything on the shortage of power due to shutdown told FC, “We are trying to monitor the situation in the control room.”

The crisis at Adani Power, triggered by the shortage of feedstock, comes following theSupreme Court’s order of Monday staying the appellate tribunal for electricity's interim order allowing compensatory tariffs for the two Mundra projects. These projects have been impacted by change in Indonesian coal pricing policy.

Tata Power said in its statement “It continues to look for early resolution to the ongoing issue of under-recovery of fuel price."

Also, the court observed on Monday that all coal mine allocations made since 1993 were illegal, raising fears of a huge impending coal shortage in the market. The court is scheduled to pass a verdict on the penalties, including possible cancellation of licences, on September 1. Following the Supreme Court’s observations, Adani Power stock price dropped 4.09 per cent, along with Reliance Power (down 4.07 per cent) and Tata Power (down 3.42 per cent) on Monday.

Both Adani’s and Tata’s Mundra thermal power projects, located at Mundra in Kutch district of Gujarat, use coal imported primarily from Indonesia. Sea water from the Gulf of Kutch is used for cooling the plants.

Adani’s Mundra plant is the world's fifth-largest single location coal-based thermal power plant, and India's largest operational plant. It is also the world's largest single location coal-based thermal power plant.

In July 2012, Adani Power had requested Central Electricity Regulatory Commission to increase the power tariff due to increase in price of coal imported from Indonesia. The CERC later allowed the companies importing coal to pass on the cost to the consumers and in case of Adani Power and Tata Power, even allowed them compensatory tariff due to increase in the price of imported coal due to Indonesian government benchmarking the coal price to the international index.

Tata Power’s 4,000 mw plant has five units of 800 mw each. Coastal Gujarat Power (CGPL), a wholly-owned subsidiary of Tata Power, is implementing the project.

“Unit #2 of the UMPP has been down due to a boiler tube leakage while Unit #4 got down due to re-heater isolator leakage today evening. 2,400 mw is functional,” the Tata Power statement said.

The western regional grid witnessed a loss in generation of 3,143 mw on August 26 as many plants have been affected by coal shortages, according to Western Regional Load Despatch Centre (WRLDC).

Total capacity of western regional grid is about 4,550 mw. Gujarat, Madhya Pradesh, Maharashtra, Chattishgarh, Goa, Daman & Diu, and Dadra & Nagar Haveli come under this grid.

“Generation availability in western regional grid is severely affected on account of coal shortage reported by state/central/private power stations,” WRLDC said in a communication.

India has an installed power generation capacity of nearly 2,50,000 mw. Out of more than 2,18,000 mw capacity monitored by the central electricity authority (CEA), over 34,700 mw were under forced outage as on August 24.

(With inputs from Press Trust of India)

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