Essar Energy subsidiary Essar Power Gujarat Ltd is terminating its long-term power purchase agreement with Gujarat Urja Vikas Nigam Ltd for 800 MW for its Salaya II power station. “This decision follows the failure by GUVNL to satisfy certain conditions under the PPA within the required timescale,” the company said in a brief statement on Friday.
The contract for 25 years supply at a levelised tariff of Rs 2.80 per kWh will be terminated with immediate effect. Essar Energy said it was committed to the coal fired power project – with two generation units of 660 MW each – and is reviewing its sales options.
The news comes a day after the firm secured a 25-year PPA with the Bihar State Electricity Board to purchase 300 MW from its Tori power station in Jharkand at a levelised tariff of Rs 3.28 per kWH, significantly higher than a previous contract with the same electricity board.