Ministry of Power directs Generating Companies (based on domestic coal) to import at least 10 % of their coal requirement for blending to meet the increased demand of power; effective till 31st October, 2022

In light of the increased demand for power, the Power Ministry has issued the following directives, valid up to 31st October, 2022.

1. All Generating companies based on domestic coal have been directed to import at least 10 % of their requirement of coal for blending;
2. 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;
3. These plants will supply power in the first instance to the Power Purchase Agreement (“PPA”) holders. Any surplus power left thereafter or any power for which there is no PPA will be sold in the Power exchanges;
4. In the event the plant has PPA with multiple DISCOMs, and if one DISCOM does not schedule any quantity of power according to its PPA, then that power will be offered to other PPA holders and any remaining quantity thereafter will be sold through power exchange;
5. Where any DISCOM is unable to enter into mutually negotiated rates with the generating company and is not willing to procure power at the benchmark rate worked out by the committee; or is not able to make weekly payment then such quantity of power shall be sold in the Power Exchanges.

Background:

The demand for power has increased by 20% in energy terms. The supply of domestic coal has increased but the increase in supply is not sufficient to meet the increase in demand for power. This is leading to loadshedding in different areas. Owing to the mismatch between the daily consumption of coal for power generation, the stocks of coal at the power plant has been declining at a worrisome rate. In view of this emergency, the Power ministry has issued the above directions to the Generating Companies under the Electricity Act, 2003.

For a detailed read and reference to the list of imported coal based plants, please refer to the attached Notification.

Source: Ministry of Power