Power News We love to talk!

APR 05 2013

Even a minor price hike can power up Adani Power

  • Economic Times, ET Bureau / Hyderabad
  • Created: Fri 05th APR 2013

The Central Electricity Regulatory Commission's directive for compensatory tariff hike is a ray of hope for Adani Power's investors. Though the outcome of the meeting with the buyers remains uncertain, even a minor increment in tariff can significantly improve the company's earnings, which have been hit by changes in Indonesian tax laws on coal exports.

Almost two-thirds of Adani Power's fuel requirement is met through imported coal. The price of landed coal has increased from $44 per metric tonne to $100 per metric tonne after the change in Indonesian regulations.

Consequently, the company's per-unit fuel cost has risen to Rs 2.1 from Rs 1. In addition to the variable fuel cost, the company also has huge fixed costs such as depreciation, staff and interest costs.

Compare this with the selling price according to contract price of Rs 2.34 per unit for 1,000 MW with Gujarat electricity board andRs2.94 per unit for 1,424 MW with Haryana electricity board. Because of this, the company's Mundra project has become unviable. The company has seen five continuous quarters of huge losses, aggregating to Rs2,331 crore.


Haryana Gujarat Adani Power Ltd Indonesia Power Electricity

Related News

  • To salvage debt hit Mundra project, Tata Power offers 51% stake for nominal Re 1 to Gujarat PSU GUVNL  Read more
  • Mumbai's first metro to go green  Read more
  • Inox Renewables exits wind power business  Read more
  • Coal India to invite applications from independent power producers  Read more
  • ONergy brings innovative solar energy solutions  Read more
  • Power companies refrain from bidding for Gujarat's low-cost electricity  Read more
  • IL&FS; Energy to raise solar power capacity  Read more
  • L&T to supply 5 million smart electricity meters to EESL  Read more
  • Policy for surplus coal availability for power plants in the works: Piyush Goyal  Read more
  • Adani Powers new plant and expansion plan hit roadblocks  Read more