The Union Ministry of Power (MoP) has again issued directive to the imported coal-based (ICB) power plants, asking them to resume operation at full capacity, keeping in view the expected surge in power demand for the upcoming summer season.
The decision was taken by invoking Section 11 of the Electricity Act, 2003 which states that a generating company, in extraordinary circumstances, will operate and maintain any generating station in accordance with the government’s directions.
Notably, this is the second time the emergency law has been invoked in as many years.
The previous order was introduced in May, 2022 when the ICB plants were summoned to compensate for the lesser generation from the domestic coal-based plants at a time when the country had faced similar surge in power demand.
The latest directive comes into effect on 16 March, 2023, giving plants the time to import coal ahead of the expected surge in consumption, and will remain valid till 15 June, 2023.
In its order, the MoP has also provided pass-through aspect for ICBs, as the current power purchase agreements (PPAs) do not have adequate provision for passing on the high cost of imported coal.
Accordingly, the variable tariff for these plants will be fixed by a panel appointed by the government that will ensure benchmark rate of power, taking into account all prudent costs of using imported coal for generating power, including existing coal prices, shipping costs, and operational and maintenance costs.
Performance of ICBs not up to the mark
The recent directive is likely to benefit the existing 15 ICB plants that have a combined installed capacity of 17,255 mega-watt (MW), accounting for 8% of the total coal-fired plants fleet.
Incidentally, after a dull spell of performance in the first half of FY23 where some of the ICB plants were facing prolonged closure, the generation volume gradually picked up pace post-September, 2022. Nevertheless, overall generation has remained almost stable.
Total power generation from ICB plants was recorded at 35,103 million units (MU) during April, 2022-January, 2023 as against 35,113 MU in April, 2021-January, 2022.
Leave a Reply