Tata Power has resumed operations at its 4,150 MW Mundra thermal power plant in Gujarat after a shutdown of nearly nine months, according to a regulatory filing.
The plant, one of India’s largest coal-based power facilities, had remained offline since July 2025, impacting the company’s generation capacity and financial performance.
Coastal Gujarat Power Ltd. (CGPL) runs the Mundra facility, which is very important for providing electricity to several states, including Gujarat, Maharashtra, Punjab, Haryana, and Rajasthan.
Financial Stress and Coal Price Surge Led to Shutdown
The prolonged shutdown was primarily attributed to financial stress caused by a sharp rise in imported Indonesian coal prices, coupled with the expiry of government support under Section 11 on June 30, 2025.
This made running the plant too expensive, so all units had to be shut down for a while.
Tata Power lost a lot of money because of the shutdown, which stopped generation and made assets less useful.
New Power Purchase Agreements Enable Restart
The restart follows the signing of supplementary power purchase agreements (PPAs), particularly with Gujarat Urja Vikas Nigam Ltd (GUVNL), enabling cost pass-through and improving project viability.
These agreements are crucial in ensuring sustainable operations and long-term power supply commitments.
The company had also been talking to other states about making similar deals, which would make the plant’s role in distributing power in the region even stronger.
Boost to Power Supply Amid Rising Demand
The reopening of the Mundra plant comes at a crucial time because India is getting ready for peak summer demand. The plant will need to run at full capacity to avoid power shortages.
The 4,150 MW plant is a big part of India’s baseload power, and its return is expected to make the grid more stable and the supply more reliable.
Market and Sector Impact
After the announcement, Tata Power shares are likely to stay in the news as investors try to figure out how the restart will affect the company’s performance and revenue outlook.
The development also shows how important thermal assets are for balancing India’s growing renewable energy capacity, especially when demand is high and supply is unpredictable.
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