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Mundra umpp

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analysis of mundra power project by Tata in India and the challenges faced

analysis of mundra power project by Tata in India and the challenges faced

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  • 1. MUNDRA UMPP
  • 2. Agenda UMPP Initiative Description of Mundra UMPP Project Project Status Key Issues and Concerns Way Ahead
  • 3. The Ultra Mega Power Plant (“UMPP”) Initiative• GoI made a comprehensive assessment of India’s future energy needs and alternatives for energy supply• Capacity additions of 160,000 MW required in the next 10 years to satisfy India’s power needs• Large scale capacity additions needed to address the country’s poverty alleviation agenda• Launched a program in 2005-06 to bid out 9 UMPPs of 4,000 MW each• Economies of scale and competitive bidding expected to benefit consumers through lower tariffs• Project will increase India’s generation capacity by 3%; likely to impact about 16 million domestic consumers in the country and, hence, in line with our “inclusive” growth strategy for infrastructure
  • 4. Project Description - (1/2)• 4,000 MW greenfield coal-fired plant located near Mundra Port, Gujarat• Awarded by Ministry of Power through tariff-based competitive bidding to Tata Power in December 2006• India’s first private sector power project using supercritical technology; most energy efficient plant in the country• Will sell electricity to state-owned utilities in 5 states – Gujarat, Maharashtra, Haryana, Rajasthan and Punjab• Project Cost: Rs 170 Billion. The project is financed with the Debt equity ratio of 75:25• Project financed by debt from ADB and IFC( Rs 18 bn each), EXIM Bank of Korea (Rs 20 bn), SBI (Rs 20 bn) and some other banks (BNP Paribas, OBC)
  • 5. Project Description - (2/2)• Tata Power won the bid by quoting a price of Rs. 2.26 per unit of electricity• Coastal Gujarat Power Limited (CGPL), a wholly owned subsidiary of the Tata Power Company Limited will build, own and operate the plant• Will import coal from Indonesia and other countries through the Mundra Port• South Korean major Doosan to supply the boilers for the project and Toshiba from Japan will provide the turbines
  • 6. Project Status• The stages of completion of units are as below: Installed Capacity Date of Stage Unit Number (MW) Commissioning/Status 1st 1 800 2012 March 1st 2 800 2012 July 1st 3 800 Steam blow out is in progress 1st 4 800 TG have been put on turning gear 1st 5 800 and boiler hydro test is complete Total Five 4000• Overall around 96% of the work has been completed. Unit#1 & Unit#2 are operational and Units#3-5 are expected to be completed at an interval of 4 months each
  • 7. KEY ISSUES AND CONCERNS
  • 8. Coal Price Hike issue• The project was envisaged based on imported coal, mainly from Indonesia• Tata Power had purchased a 30% stake in two thermal coal mines• 58% of the total coal required from mines in Indonesia• Indonesian govt decided to link the of coal price exported with international prices resulting in higher cost then initially envisaged while calculating project feasibility
  • 9. Higher cost of production Issue• State utilities which signed PPAs are not willing to take a tariff hike• It was binding on it to supply power at the predetermined contract rate.• Tata Power is blending up to 70 per cent of its fuel requirement with cheaper imported coal for now as temporary solution
  • 10. Impact on marine life and biodiversity• The project has caused drastic reduction in fish catches• The project has caused destruction of creeks and mangroves around Mundra ( as per reports)• The local fishing community alleged that contaminated warm water from the thermal power plants are dumped into the sea• Intake of large amounts of water from the creeks to run the plants and destruction of biodiversity-rich mangroves • - forcing the valuable fish to migrate out of Gulf of Kutch
  • 11. Impacts of fly-ash contamination• The long term effect of coal ash has not been taken into account which giving the environment clearance• The lives of several thousand villages living in the vicinity of the project could be at risk• Higher presence of radioactive substance has been detected in the neighborhood of the ash-pond after the project commencement• The impact on livestock, wildlife and biodiversity could last for generations
  • 12. Violation of the environmental clearancenorms• Cooling systems are installed in thermal power plants for cooling the condensers• Closed-cycle systems are said to be better as they recycle coolant water instead of dumping the warm water into the sea as in the case of an open-cycle system• Tata is operating an open-cycle cooling system• The discharge of warm water is against the norms set for the environment clearance
  • 13. WAY AHEAD
  • 14. Project Management• Coal-pricing situation affects the entire industry, hence collaborative efforts are underway to take up the issue with the govt.• Mitigate the impact of the pricing problem by pushing the performance of the plant• Using a mix of low-grade coals and imported coal to bring down costs of the project• Tata Power has petitioned the central electricity regulator asking for an upward revision in tariffs• To restore the viability of the project, the developer is now pitching for a tariff of over Rs 3 per unit ( existing tariff : Rs. 2.26 per unit)
  • 15. Environmental Management• Recommended that an air quality monitoring station is set up at nearby village to regularly monitor the air pollutant levels and subsequently assess the impact• Company is working for establishment of market linkage• to ensure 100% fly ash utilization
  • 16. Environmental Management• Signed purchase order with Binani Cement and is also in advance stage of agreement with two cement industries• Flow Meters need to be installed at the inlet and outlet of Effluent Treatment Plants• A Coastal Biodiversity Management plan will be formulated following BNHS survey which is presently under progress
  • 17. Social Management• Proposal to collaborate with an organization which will identify training and employment opportunities for affected people and• Provide training for improving employability for restoration of income for loss of agricultural land• Livelihood options to be worked with the support of the Fisheries dept. and the villagers about a demonstration project for shrimp farming as well as crab culture in the backwater channel area
  • 18. Social Management• The company has started exploring the possibilities of fodder cultivation and has identified 125 acres of land approx in association with Tunda gram panchayat for cultivation of fodder on experimental basis• A village development plan to be prepared with the villagers for future action (on a yearly basis) to take some developmental activities such as construction of roads and providing sanitation and water supply to villages

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