Fuel cost pass-through for Adani plant positive sign for imported coal-based IPPs


Fuel cost pass-through for Adani plant positive sign for imported coal-based IPPs

The latest decision by the Central Electricity Regulatory Commission (CERC) to allow fuel cost pass through for Adani Power’s Mundra project through a supplementary PPA is a major positive sign for imported coal-based Independent Power Producers (IPPs), ratings agency ICRA said today.

CERC had last week approved the supplemental Power Purchase Agreement (PPAs) signed between Adani Power (Mundra) Ltd (APML) and Gujarat Urja Vikas Nigam (GUVNL) for supply of 2,000 Megawatt power. The PPAs allow pass-through of imported coal cost by APML subject to certain covenants.

While approving these PPAs, the commission has considered the importance of the project in meeting the state power requirements and the cost competitive rates offered by the project even after the pass-through of higher imported fuel cost.

The tariff relief approved under the supplemental PPAs would significantly reduce losses faced by APML and would improve the viability of the project, ICRA said. Read More

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