At thermal power plants running on imported coal, govt orders full capacity

The power ministry has directed all imported coal-based thermal power plants to operate at full capacity amid the ongoing power crisis, which has seen power cuts across a number of states due to low coal stocks. The orders were issued under Section 11 of the Electricity Act, which empowers the government to —“under extraordinary circumstances” — ask power generation companies to maintain output in accordance with directions. High international coal prices have forced some thermal plants to halt operations as they cannot pass through high input costs to state power distribution companies under existing Power Purchasing Agreements (PPAs).

The order noted that about 7,600 MW of the 17,600 MW of imported coal-based thermal power capacity in the country was not operating as states have not been able to reach agreements with thermal plants on the pass-through of the higher price of imported coal.

The order noted that since the present PPAs do not permit pass-through of the present high cost of imported coal, the rates for power supplied to PPA holders would be set by a committee under the power ministry.

The order also noted that if a distribution company does not schedule any quantity of power from a plant in such cases, the power would be sold on exchanges. A sharp spike in the demand for power, low output from imported coal-based plants and low coal stocks at domestic coal-based thermal plants have led to long outages in several states, including Punjab, Haryana, Uttar Pradesh, Maharashtra, Jharkhand, Bihar and Andhra Pradesh in April. The high demand for power has pushed the market clearing price for power on the Day Ahead Market on the India Energy Exchange to the maximum permitted level of Rs 12 per unit in the last week of April.