Tata Power’s Mundra plant shut since July 1 amid tariff uncertainty

All five units of Tata Power’s Mundra power plant have remained shut since July 1 due to maintenance, according to CNBC. The shutdown coincides with the Ministry of Power’s decision not to extend Section 11 of the Electricity Act, which had temporarily mandated operation of imported coal-based power plants, beyond June 30, 2025.

Brokerage firm IIFL noted that the Centre’s decision stems from the absence of peak power shortages this fiscal year and a preference for a long-term resolution to the ongoing tariff issues at Mundra. IIFL expects Tata Power’s profit after tax (PAT) to fall by 5% to 8% for the current financial year due to the shutdown. It also estimated a monthly PAT impact of Rs 1 billion to Rs 1.5 billion for each month the plant remains offline.

Despite this, IIFL projects that increased income from solar module sales and rooftop solar project execution will likely offset the losses from Mundra.

According to Axis Capital, Tata Power’s management is pursuing a permanent resolution to the Mundra power purchase agreement (PPA) issue with its procuring states. The company may still be able to recover availability-linked compensation if the shutdown lasts less than 45 days.

JM Financial added that it expects Tata Power to finalise PPAs with five beneficiary states: Gujarat, Maharashtra, Rajasthan, Punjab, and Haryana. The plant’s operating levels have steadily increased over recent years, with plant load factors (PLFs) rising from 25% in FY22 to 65% in FY25.

Located in Gujarat, Mundra is India’s first 830 MW supercritical unit-based thermal plant, with a total installed capacity of 4,150 MW. It uses low-sulfur imported coal and supercritical technology to reduce emissions and improve fuel efficiency. The plant emits 750 grams of CO₂ per kilowatt-hour, significantly below the national average of 1,259 grams.