MoP directs imported coal-based power plants to operate their full capacity

The power demand has gone up by almost 20 per cent in energy terms. While the supply of domestic coal has increased, the increase in the supply is not sufficient to meet the increased power demand which is leading to load shedding in different areas.

In the light of these circumstances, the Ministry of Power (MoP) has issued the following directions under Section-11 of the Electricity Act:

  • 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.
  • These plants will supply power in the first instance to the PPA holders. Any surplus power left thereafter or any power for which there is no PPA will be sold at the power exchanges.
  • Considering the fact that the present PPAs do not provide for the pass through of the present high cost of imported coal, the rates at which the power shall be supplied to PPA holders shall be worked out by a committee constituted by the MoP with representatives from MoP, CEA and CERC. This committee shall ensure that bench mark rates of power so worked out meets all the prudent costs of using imported coal for generating power, including the present coal price, shipping costs and O&M costs and a fair margin.
  • The PPA holders shall have an option to make payment to the generating company according to the bench mark rate worked out by the Group or at a rate mutually negotiated with the generating company. Payment at the above rates shall be made to the generating company on a weekly basis.
  • Bench mark rates worked out by the committee shall be reviewed every 15 days taking into consideration the change in the price of imported coal; shipping costs etc.

This order will remain valid up to October 31, 2022.

Download the order here