Full Breakdown
India Orders Captive Coal Plants to Run at Full Capacity Amid Unusual Power Surge
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Government Order and Scope
The Ministry of Power issued an emergency directive under Section 11 of the Electricity Act, dated September 25, to more than 100 captive coal-fired plants with a minimum 50 MW capacity. The order requires these facilities to operate at maximum available capacity from October 1 through December 31 and to sell any surplus generation on power exchanges. The directive covers 112 plants owned by companies such as Vedanta, Tata Steel, Hindalco Industries, JSW Steel, UltraTech Cement, Reliance Industries, Indian Oil, Bharat Aluminium, Hindustan Zinc and Nayara Energy. An earlier emergency order for Tata Power’s imported-coal plant, Coastal Gujarat Power Ltd (CGPL), was also extended to the same deadline.
Background: Unprecedented September Demand
India’s power grid recorded a peak demand of 269 GW on September 10, the highest ever for that month and only 1 GW below the all-time yearly peak of 270 GW reached in May. Power-sector experts attribute the sustained high demand to persistent heat, deficient rainfall and increased irrigation needs, with the El Niño climate pattern intensifying temperatures. Historically, peak loads decline after July, but this year September demand has remained close to summer levels.
Implementation Mechanisms
The ministry instructed generators to maintain adequate coal stocks and to submit weekly reports to the Central Electricity Authority (CEA) detailing generation, captive consumption, power sales and available capacity. Under the emergency mechanism, a CEA-appointed committee will set the tariff for electricity supplied by these plants, factoring in the higher cost of imported coal.
Anticipated Impact on Power Availability
By mandating full-capacity operation and channeling surplus electricity into the market, the government aims to maximise overall generation and alleviate potential shortages.
Official Commentary
A senior government official clarified that the extension of the emergency provision to CGPL is unique because other imported-coal units are already operational and face no challenges. The ministry noted that similar Section 11 directives have been employed during previous peak-summer periods to secure adequate supply, typically accompanied by tariff subsidies to protect consumers from price spikes.