Govt invokes emergency provision to step up power supply

New Delhi (TIP) – The Centre has invoked an emergency procedure under the Electricity Act to compel imported-coal-based plants to begin generating electricity. In return, power producers have been allowed to pass through their costs to the consumers, which is not allowed in the existing power purchase agreements (PPAs).

The government hopes this will bring online 10,000 MW of power daily from imported coal plants which have a total capacity of 17,600 MW. Already, 7,600 MW of capacity has been revived after the government allowed a pass-through of higher costs. The entire 17,600 MW capacity has been shut as PPAs did not allow pass-through of higher cost of imported coal which has skyrocketed four times in the past one year.

The higher costs will be worked out by a committee with representation from the Ministry of Power, Central Electricity Authority and Central Electricity Regulatory Commission. This panel will ensure that the benchmark rates of power worked out meet all the prudent cost of importing costlier coal, said an official release.

The government is also putting a lot of onus on the states to tide over the power crisis after demand went up by 20 per cent due to hot weather conditions. The government has invoked Section 11 to compel imported coal-based plants to begin functioning because there is a mismatch in daily arrival of coal and declining stocks of coal at power plants. The imported coal for blending has also gone down because of the high costs. Imported coal for blending was at 37 million tonnes in 2015-16 which is down to negligible amounts currently. This aspect was reviewed by Power Minister RK Singh in a virtual meeting with states. He asked the states to place orders for import of coal for blending so that it reaches power plants this month itself. Singh also wanted the states to increase the output from captive mines and ensure off-take in the Rail-cum-Road (RCR) mode to meet the shortfall in coal requirement at their power plants.

While Tamil Nadu and Maharashtra have placed import orders, Punjab and Gujarat are in the advanced stage. Rajasthan and MP are in the process of issuing the tenders. Haryana, UP, West Bengal, Odisha and Jharkhand have not yet issued tenders.

India is also planning to reopen over 100 coal mines previously considered financially unsustainable. Source: TNS

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