Centre invokes emergency mechanism amid surging power demand, directs captive plants to run at full capacity

The direction has been issued under Section 11 of the Electricity Act, which allows the government to mandate power generation in extraordinary circumstances.

The directive is applicable to all coal-based captive power plants with 50 megawatt capacity and above which will be required to “operate and generate power to the maximum extent of their available capacity.”

“The generators shall offer their available surplus generation, after meeting their own captive demand, through the power exchanges, in accordance with the applicable market regulations and procedures,” it read.

The government said the move was aimed at maximising electricity availability, stating that “entire capacity of all the sources of generating electricity including the captive generating plants” needs to be utilised to the maximum possible extent.

It also asked the generators to maintain adequate coal stock to ensure availability of fuel for operation of the plant and enable maximum generation.

“The generators shall submit a weekly report to the Central Electricity Authority indicating generation, captive consumption and sale of power through the power exchanges/other permitted avenues, along with details of available capacity and coa! stock, as may be prescribed,” it added.

Separately, the power ministry also extended the same emergency mechanism to Tata Power’s imported coal-based plant, Coastal Gujarat Power Ltd (CGPL), till December 31. Notably, the plant has been running under this provision since March and was slated to end this month.

Before March, the 4 gigawatt (GW) capacity plant had remained largely idle for nearly six months due to high fuel costs and the absence of a viable power purchase arrangement.

Earlier this year, the Gujarat government also gave approval of a revised power purchase arrangement with the plant, clearing the way for the resumption of long-term supply from the plant.

A senior government official said the emergency provision was extended only to Tata Power’s plant, as other imported coal-based plants were operational and were not facing any challenges.

The invocation of the emergency provisions is not unprecedented. The government has invoked it in previous years during peak summer months to ensure adequate power supply.

Typically, between April and June, authorities push power producers to ramp up output, including from high-cost sources such as gas-fired plants and imported coal-based units, while subsidising tariffs to shield consumers from price spikes.

Under this emergency mechanism, a government-appointed committee determines the tariff at which electricity from these plants is procured, factoring in the elevated cost of imported coal.

After issuance of Section-11 directions, a Committee, under Chairman Central Electricity Authority (CEA), is constituted for determination of tariff. This Committee takes into account all the input costs while determining the tariff of ICB or Gas Based Plants.

In recent years, electricity demand has generally peaked during the summer months of April, May, June and July, driven largely by widespread use of air conditioners and other cooling appliances across households and commercial establishments.

By September, demand typically begins to ease as the summer heat recedes and the country moves into the post-summer demand pattern. Yet this year, electricity consumption has remained unusually high, keeping peak demand close to its summer level.

September has recorded the year’s highest peak demand only twice in recent years — in 2023-24 and 2020-21.

According to power sector experts, the unusually high demand is being driven by a combination of persistent heat, deficient rainfall and higher irrigation demand, with weather conditions linked to El Niño adding to the pressure.