The Gujarat government has agreed to buy 1800-Mw power from Tata Power NSE -0.36 %’s ultra mega power plant at Rs 4.50 per unit, higher than tariff agreed in its executed contract, for four weeks, source said.
The move is expected to reduce spot electricity prices to some extent as Gujarat is one of the top buyers on power exchanges off-taking about 4,000-Mw daily at about Rs 13 per unit. Desperate bids by power discoms in the wake of low domestic coal availability at power plants has pushed peak prices on Indian Energy Exchange NSE 0.20 % to Rs 20 per unit.
