Centre extends special operating framework for Tata Power’s Mundra plant till Sept 30

The Centre has extended the special operating framework for Tata Power’s Mundra thermal power plant till September 30, allowing the country’s largest imported coal-based power station to continue supplying electricity under government directions for another three months.

Tata Power informed stock exchanges on Tuesday that the Ministry of Power has extended the validity of the directions issued for the Mundra plant, which were earlier applicable till June 30, 2026. The extension comes as the government continues to rely on imported coal-based generation to ensure adequate electricity availability and grid stability amid rising power demand. The 4,000-MW Mundra plant, operated by Tata Power subsidiary Coastal Gujarat Power Ltd (CGPL), supplies electricity to Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.

Tata Power Mundra plant inks supplementary PPA with GUVNL

The plant has historically faced pressure on viability due to volatility in international coal prices, given that it runs on imported coal while supplying power under long-term tariff structures discovered through competitive bidding. To address these challenges and enable continued operations, CGPL has entered into supplementary power purchase agreements (PPAs) with procurers, including Gujarat Urja Vikas Nigam Ltd (GUVNL). These agreements provide an updated framework for procuring power from the Mundra station and are aimed at aligning tariffs with higher imported fuel costs, thereby supporting plant operations.

Tata Power’s Mundra plant likely to restart by year-end

The development also follows the government’s earlier decision to direct imported coal-based power plants, including Mundra, to remain available to meet rising electricity demand during the peak season. The latest extension continues those directions through the September quarter.

The government’s directions have been issued under Section 11 of the Electricity Act, 2003, which empowers it to require generating companies to operate and supply electricity in extraordinary circumstances and in the larger public interest. The provision has been invoked in recent years to ensure adequate power availability during periods of heightened demand and fuel market volatility. For imported coal-based plants, the framework also provides a mechanism for determining benchmark tariffs intended to cover fuel, transportation and operating costs, helping ensure continued availability of generation capacity.

The Mundra ultra mega power project is among India’s most strategically important thermal assets and plays a key role in supporting power supply across western and northern states. The latest extension underscores the government’s continued dependence on conventional thermal generation to maintain energy security and grid reliability, even as renewable energy capacity expands rapidly across the country.