Exclusive: Imported coal-based power plants have to run on 100% capacity till June

Section 11 of the Electricity Act, 2003, states that under extraordinary circumstances, the government can ask power-generating companies to operate and maintain output in accordance with the directions given.

The government has extended the emergency clause of the Electricity Act, 2003, mandating imported coal-based power plants to run on their full capacity till June 30, 2024, instead of the end of this month.

The eight-month extension has been directed by the power ministry because of a surge in demand, inadequate supply of domestic coal, and reduced hydropower generation. For the next year (2024-25), the government is anticipating a peak power demand of 256.53 GW (256,530 MW).

This is in line with this year's peak demand which, for the first time, hit a record 239.978 GW (239,978 MW) on September 1. However, the unusual surge in demand also resulted in an alarming spike in power shortage, recorded at 10.745 GW (10,745 MW) on the same day.

"In view of the surge in electricity demand, inadequate supply of domestic coal and the reduced availability of hydro power, it is imperative that the availability of power from imported coal based (ICB) generating stations is available to meet the demand. Therefore, after consultations with the Central Electricity Authority (CEA), the government has decided to extend the time period for Section 11 directive to imported coal based generators, up to 30.06.2024," read the order dated October 23, issued by the Ministry of Power. Moneycontrol has a copy of the order.

Section 11 of the Electricity Act, 2003, states that under extraordinary circumstances, the government can ask power-generating companies to operate and maintain output in accordance with the directions given. It also states that an appropriate commission may consider offsetting the adverse financial impact of the directions on any generating company in such a manner as it considers appropriate.

The latest order would mean at least 15 ICBs will have to operate at their full capacity. Some of these include Coastal Gujarat Power Ltd, Adani Power Mundra Ltd, Essar Power Gujarat Ltd, JSW Ratnagiri Ltd., Tata Trombay Ltd., GSECL Sikka Ltd., IL&FS Tamilnadu Power Company Ltd, Muthiara-Coastal Energen, and Udupi Power.

Coal stocks at thermal power plants have gone below the comfortable 33-35 million tonne (MT) mark, which was maintained this year from March to August. On October 23, coal stocks at domestic thermal power plants were recorded at 18.55 MT. Of the 165 domestic coal-based thermal power plants in the country, 75 had critical stocks as on October 23. Data after October 23 was yet to be compiled at the time of filing this report.

According to government officials, coal-fired thermal power plants are going to play the most important role in 2024-25 as well, contributing up to 70-75 percent of the total energy mix during peak demand hours. This is because India still does not have round-the-clock renewable energy due to a lack of energy storage systems.