In the mid-1990s the Mega Power Project policy met with limited success. Hence, aligned with the objective of 'Power to all by 2012', the Government of India started planning Ultra Mega Power Projects (UMPP) in 2005. Each of the projects with an installed capacity of 4000 MW was envisaged with the intent to make power available at minimum cost through economies of scale and superior, energy efficient and environment-friendly technology.

The Mundra UMPP - A Source of Clean and Abundant Power

Coastal Gujarat Power Limited (CGPL), Tata Power's wholly-owned subsidiary, has implemented the 4000 MW (800 x 5 units) UMPP near the port city of Mundra in the state of Gujarat in India. This UMPP is India's first 800 MW unit thermal power plant using supercritical technology, and is arguably the most energy-efficient, coal-based thermal power plant in the country.

As per the bidding norms, the Project was designed to be run on imported coal. The Project is expected to benefit close to 16 million domestic consumers apart from supplying cost competitive power to industry and agriculture.

The Project will supply power to five states namely Gujarat, Rajasthan and Maharashtra in Western India and to Haryana and Punjab in Northern India, which are currently facing shortage of electricity. It will provide a competitive source of power and help meet these states' growing demand for electricity. Reliable power from the project will help improve the competitiveness of the manufacturing and services industries, which often rely on expensive standby diesel generation to meet their power needs. Competitively priced power will also improve access to electricity in rural and urban areas, while reducing the subsidy burden on the state Governments.

Mundra UMPP Highlights

Background

While the Government is seeking to increase generation of electricity from renewable sources, India continues to rely on thermal sources to meet the growing demand. Of India's current generation capacity, more than 66% is from thermal power plants; some 85% of this (about 57%) is coal-based power. Hydropower accounts for about 19% of capacity, while the remainder comes from nuclear power, wind and other renewable sources of energy. There is an urgent need in India to add significant generation capacity in a short time frame.

India has made progress in adding wind-based power using reform initiatives that promote renewable sources and provide tax advantages to the private sector. However, wind power has limited reliability and higher cost of generation makes it unsuitable to meet large-scale base load demand. Gas-based power is also not a viable alternative to replace coal-based power on such a large scale. Not enough natural gas is available in India, and the power it generates is too expensive for the country's industrial or domestic use. This implies that the fuel mix of India's generation capacity is expected to remain roughly the same in coming years -- which means that the country will continue to depend heavily on coal-based power. It would therefore be important to make the right choices in selection of the right technologies and run the plants in an energy efficient, environmentally efficient and operationally efficient manner.

Origin

The Government of India (GoI) launched the "Power for All by 2012" initiative in 2005. To stimulate the required capacity addition, GoI launched an initiative for facilitating the development of coal based Ultra Mega Power Plants (UMPPs), each of minimum 4000 MW capacity. UMPPs will provide cheaper power through economies of scale and use of super critical technology.

UMPPs are to be implemented through public private partnerships on build-own-operate (BOO) basis. The first UMPP of India, Mundra UMPP was awarded to Tata Power through a competitive tariff based bidding process.

Chronology

LOI received from MOP 28 December 2006
Share Purchase agreement with PFC 22 April 2007
Power Purchase Agreement with procurers 22 April 2007
Notice to proceed for Boiler (M/S Doosan) & STG (M/s Toshiba) 01 September 2007