Power Ministry Extends Deadline For Imported Coal Power Plants To Run At Full Capacity

The Ministry of Power has extended the deadline for imported coal-based power plants to run at full capacity till October 15 from June 30 earlier, according to an official notification issued on Friday.

In 2002, the government had imposed Section 11 of the Electricity Act 2003 mandating imported coal-based plants to run at full capacity to meet a shortage of power during peak demand.

India faced a severe electricity shortage in 2021 and 2022. Since then, Section 11 has been extended year after year to meet the rising demand.

In the aftermath of the Russia-Ukraine war, global coal prices shot up to $400 per tonne, which made generating power from imported coal-based power plants unviable. Majority of the power plants were forced to either shut down or operate either one or two units.

However, since then the coal prices have dropped but they are still higher compared to domestic coal, making tariffs costlier.Operating under Section 11 ensures the variable cost is a pass through.

In fiscal 2025, peak power demand is expected to cross 250 GW, surpassing the peak 240 GW touched last year on rising economic and industrial activity.

There are around 15 imported coal-based power plants operating in India including ultra mega power projects of over 4,000 MW each of Adani Power and Tata Power, Essar Power's 1,200-MW Salaya power plant, and JSW Energy's Ratnagiri Power Plant.