Centre invokes section 11 of Electricity Act, 2003 directing imported coal power plants to operate at full capacity

Union coal ministry on Friday said it aims to minimize import of thermal coal and to make the country atmanirbhar in the sector

Sanjay Jog | Updated on: Friday, May 06, 2022, 07:40 PM IST

Representational Image |
Representational Image |

Amid the present power crisis owing to coal shortage, the Centre has invoked section 11 of the Electricity Act, 2003 and asked all imported coal-based power units to run at full capacity. Section 11 stipulates that in case of emergency the government may direct producing companies to operate and maintain any station in accordance with its directives. The imported coal-based power plants are otherwise unable to operate at full capacity due to the high prices of the resource in the international market.

‘’The demand for power has gone up by almost 20 percent in energy terms. The supply of domestic coal has increased but the increase in supply is not sufficient to meet the increased demand for power. This is leading to load shedding in different areas. Because of the mismatch between the daily consumption of coal for power generation and the daily receipt of coal at the power plant, the stocks of coal at the power plant have been declining at a worrisome rate,” the ministry of power said in a letter to all the imported coal-based plants.

The Association of Power Producers director general Ashok Khurana told the Free Press Journal, ‘’Ministry of Power's decision to mandate imported coal plants to operate should be seen in light of ‘’no power’’ is expensive than ‘’no power.’’ "We cannot afford to have idling capacity and power cuts. We need to ensure that all available capacity is run and supply is maintained," he added.

The international price of coal has gone up in an unprecedented fashion. It is currently around 140 US Dollars per tonne. As a result of this, the import of coal for blending, which was of the order of 37 Million Tonnes in 2015-16 has gone down, leading to more pressure on domestic coal. The imported coal-based generation capacity is around 17,600MW. The PPAS for imported coal-based plants do not have adequate provision for pass-through of the entire increase in the international coal price. At the present price of imported coal, running of imported coal-based plants and supply of power at the PPA rates will lead to huge losses to the generators and therefore the generators were not willing to run those plants,"said the ministry in a letter.

‘’All imported coal-based power plants shall operate and generate power to their full capacity. Where the imported coal-based plant is under NCLT, the Resolution Professional shall take steps to make it functional," it added.

Meanwhile, the union coal ministry on Friday said it aims to minimize import of thermal coal and to make the country atmanirbhar in the sector. Government proposes to increase domestic coal production to 1.2 billion metric tonnes by FY 23-24 amd Coal India will offer its 20 closed/discontinued underground mines to private players on revenue sharing model.

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Published on: Friday, May 06, 2022, 07:40 PM IST