Govt extends Section 11 directions for Tata Power's Mundra ICB plant to December 31

New Delhi: The Ministry of Power has extended its Section 11 directions to Tata Power's Mundra imported coal-based (ICB) plant in Gujarat for three more months, to December 31. The directions issued earlier were due to lapse on September 30. They were issued under the Electricity Act, 2003, and have kept the plant running since April.

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The ministry gave the country's power demand as the reason for the extension. "In view of the prevailing power demand scenario in the country, it has been decided to extend the validity of the aforesaid directions issued under Section 11 to the CGPL Imported Coal-Based (ICB) plant up to 31st December 2026," the order said. It was issued on September 25 to Coastal Gujarat Power Ltd (CGPL), which operates the plant. Tata Power disclosed the letter to the stock exchanges on September 26.

Second extension since April

This is the second extension of the directions. The order lays out how the mandate has been renewed since it was first issued. It refers to the directions "vide MoP letter dated 22nd March, 2026 and the clarification issued vide MoP letter dated 19th June 2026." "The aforesaid directions, which were initially valid up to 30th June 2026, were subsequently extended up to 30th September 2026 vide the Ministry of Power's letter dated 19th June 2026," it said.

The March 22 directions required the plant to run at full capacity "from 01.04.2026 to 30.06.2026". At the time, the ministry cited the "prevailing demand–supply scenario" and the expected rise in electricity demand over the summer.

Tata Power disclosed the first extension in an exchange filing on June 23. "The validity of the aforesaid directions, which was earlier applicable up to June 30, 2026, has been extended and shall now remain in force until September 30, 2026," the filing said.

How the plant is paid

The directions come with their own payment arrangement. Under the March order, a committee of officials from the Ministry of Power, the Central Electricity Authority (CEA) and NTPC sets a benchmark rate for the plant's power. That rate is meant to cover "all the prudent costs of using imported coal for generating power, including the present coal price, shipping costs and O&M costs, etc and a fair margin." The rate is reviewed every 15 days to track changes in coal and shipping costs. Buyers can pay either the benchmark rate or a rate agreed with the generator.

The same order required the plant to keep coal stocks in line with existing norms and to report its generation and sales to the ministry every week. It also set out what happens to power the contracted buyers do not take. Surplus power is to be sold on the power exchanges, and unscheduled power offered to other distribution licensees or on the exchanges.

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Restarted in April after nine-month shutdown

The Mundra plant restarted on April 1, 2026, the first day of the Section 11 mandate. Tata Power had shut it on July 2, 2025, and it stayed shut for nine months. Tata Power puts the plant's installed capacity at 4,150 MW.

The plant supplies electricity to Gujarat, Maharashtra, Punjab, Haryana and Rajasthan, with Gujarat taking about half its output.

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