Can summer demand, Iran conflict help Tata Power restart its Mundra plant?

Mint on Friday on the sidelines of a press conference to announce a partnership with Salesforce. A supplementary power purchase agreement (SPPA) with Gujarat and other client states should happen “very quickly,” he said, declining to elaborate further.The ultra mega power project in the coastal town has been shut since July 2025 amid disagreements with client states—Gujarat, Rajasthan, Maharashtra, Punjab, and Haryana—over the pass through of the high cost of Indonesian coal.Analysts at brokerage IIFL say a combination of rising power demand ahead of summer and the possibility of higher fuel prices due to the war in West Asia could strengthen Tata Power’s negotiating position this time.

Historically, sharp rallies in natural gas prices, such as the one seen currently, have also pushed coal prices higher as fuel substitution plays out in electricity markets, they said.Asia spot liquefied natural gas prices (LNG) more than doubled compared to last week and reached their highest level in over three years after a production halt by Qatar, which provides 20% of global LNG supply, has triggered a scramble for gas, according to a Reuters report dated 6 March.The average LNG price for April delivery into north-east Asia was estimated at $22.50 per million British thermal units (mmBtu), the highest level since mid-January 2023 and over double the price of $10.40/mmBtu the previous week, the report said, citing industry experts."Sustained rise in coal prices, along with uncertainty around LNG supply and elevated summer power demand, can catalyse a resolution at Mundra,” the IIFL analysts wrote in a report dated 3 March.Higher global coal prices could benefit Tata Power in two ways, the analysts said. The company would gain