POWER October 2013 - 36

TOP PLANTS
the booming industrial western states of
Gujarat (1.8 GW) and Maharashtra (760
MW) plus Haryana (380 MW), Rajasthan
(380 MW), and Punjab (475 MW) in northern
India, which face debilitating electricity
shortages.
Among the world's largest greenfield thermal
generation projects, the massive plant is
today also coal-heavy India's most efficient
fully operational thermal power plant. The
project was completed in a record time of one
year from the date of commissioning of the
first 800-MW unit in March 2012 (Table 1).
That means the average gap between synchronization
of two units has been 3.5 months,
" which is better than the baseline schedule of
four months and is much better than the five
months provided in original power purchase
agreements, " says CGPL.
At the same time, the plant heralds the entry
of 800-MW supercritical boiler technology
in India. According to CGPL, what sets
the plant's technology apart from " recirculation
type " boilers in 500-MW subcritical
units commonly used in the country is that
the boilers for the supercritical 800-MW
units are a " once-through " type. As compared
to any other subcritical power plant
in India, the project avoids burning 1.7 million
metric tons of coal per year. Mundra's
greenhouse gas emissions per kilowatt-hour
of energy generated are 750 grams of carbon
dioxide (g CO2) per kWh, as compared
to India's national average of 1,259 g CO2/
kWh for coal-based power plants. " The
choice of imported coal also significantly
lowers sulfur emissions, " the company says.
The plant uses significantly less than the
stipulated 1% sulfur and 10% ash content in
coal. All coal ash generated from the plant is
Table 1. Project milestones for the Mundra
UMPP. Source: Tata Power
Milestone
Letter of Intent received from the
Ministry of Power
Share purchase agreement with
Power Finance Corp.
Power purchase agreement with
procurers
Notice to proceed for boiler
(Doosan) and steam turbine
generator (Toshiba)
Financial closure
Unit 1 commissioned
Unit 2 commissioned
Unit 3 commissioned
Unit 4 commissioned
Unit 5 commissioned
36
Date
Dec. 2006
Apr. 2007
Apr. 2007
Sept. 2007
Apr. 2008
Mar. 2012
July 2012
Dec. 2012
Jan. 2013
Mar. 2013
collected and stored within the plant premises
in silos and ponds.
In-House Successes
The plant has won two Project Finance International
accolades for its brisk pace of
development: In 2008, it was awarded the
Asia-Pacific Power Deal of the Year for its financing
achievement in a span of 12 months,
and in 2012, it won the Infrastructure Excellence
Award in the Energy and Power category
for the execution of the Mundra UMPP.
But it is also recognized for innovative
practices, including the introduction of a
" Safety Time Out " session and a Safety Intervention
Audit Team, which has resulted in
" improved risk perception of employees and
increased safety awareness at CGPL Mundra, "
the company says.
A number of in-house developments have
also helped construction and operation processes.
During the plant's construction, the
project team invented and deployed funnelshaped
welding spatter arrestors for works at
height. The plant also uses unique wind barriers
for the internal coal-handling system,
which has resulted in reduced coal dust fugitive
emissions to nearby villages.
During construction, CGPL also committedly
interacted with the neighboring communities-10
predominantly agricultural
villages within a 10-kilometer radius of the
facility-to iron out agreements on land rates
and land title issues within families. CGPL
has since then engaged deeply with the villagers
to improve employment and aid selfsufficiency
(via micro-finance programs),
education, health, drinking water, infrastructure,
and rural energy. One way it mitigated
loss of grazing land was to provide fodder for
the villagers' 3,000 cattle, an initiative that
has been recognized nationally and on the
state level.
Fuel Challenges
But the Mundra plant continues to grapple
with what is perhaps its biggest challenge:
procuring imported coal in a highly volatile
international market.
In 2007, Tata Power had contracted coal
from Indonesia-the preferred choice for
Indian developers due to advantages in logistics
and mining costs-on terms that were
reflected in bid tariffs. In September 2010,
however, the Indonesian government issued
a regulation that obliged coal producers to
sell minerals and coal based on a regulated
benchmark price. The new regulations rendered
coal contracts between Tata Power
and Indonesian producers invalid and put
the company in the precarious position of
procuring imported coal at an unprecedentwww.powermag.com
ed
cost that increased 150% to 200% from
the start of the bid process. The coal price
change has made tariff-based prices of the
power purchase agreements between CGPL
and the five Indian states, cemented in April
2007, unviable.
Despite India's Central Electricity Regulatory
Commission's order this April to link
compensatory tariffs to international coal
prices (and its subsequent recommendation
that the project's gross compensatory tariff
be raised by 56 to 58 paise/kWh (about
$0.01/kWh as of August 2013) to help make
it profitable again), Tata Power continues to
flail financially on woes tied to international
loans secured for Mundra in 2008 that are
worth Rs. 17,000 crore. With the weak rupee
crisis that has recently hit India, Mundra
now faces a massive dollar loan liability of
$1.4 billion.
To address its fuel challenges and reflect
the change in the cost of Indonesian coal,
CGPL has begun blending and deploying alternate
coal called " eco-coal, " which it says
is equally environmentally friendly and low
in sulfur content but also cost competitive
and therefore helping to offset costs. " Up to
70% blending is being done to offset some of
the cost impact due to steep increase in international
coal prices and we plan to maximize
this to reduce overall cost of fuel, " the
company says. " This is a partial solution that
will mitigate large excursions in costs due to
devaluation of Indian rupee as well as in the
costs of fuel. "
Mundra's operational success in the fog
of so many uncertainties qualifies it as a
POWER Top Plant. But the future of other Indian
UMPPs remains uncertain. One urgent
policy concern that India's government will
need to deal with in the near future is to aggressively
scout and retain other global coal
resources. " Besides, " Tata Power says, " it
needs to create enabling policy framework
wherein use of such imported fuels would be
dealt with properly specially in terms of its
commercial dispensation. Further, the rise in
imported coal fuel prices due to regulatory
issues in global markets including Indonesia
would also need to be dealt lest developers
would not create downstream investments
here in India to use imported coal. "
For now, Tata Power-India's largest integrated
power company-will seek to further
diversify its portfolio of 6,899 MW in
thermal, hydro, solar, wind, and geothermal
generation. With the Mundra plant completed,
the company has plans to add 26 GW by
2020, of which 20% will be from renewable
sources. ■
-Sonal Patel is a POWER associate
editor.
POWER | October 2013
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POWER October 2013

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