India invokes emergency law for coal-based power plants to up output

01 Feb 2023

According to an internal power ministry notification, India has invoked an emergency statute to require power plants that use imported coal to maximise output ahead of a predicted record rise in electricity usage this summer.

Many of India's power plants that use imported coal, particularly those owned by Adani Power and Tata Power in the western state of Gujarat, have recently not functioned at full capacity due to the difficulty of competing with power generated from inexpensive domestic coal.

The ministry stated in the notification given to all imported coal-based power plants that it expects them to operate at full capacity and sell power to purchasers on exchanges. The capacity of India's imported coal plants totals 17 GW.

The directive takes effect on March 16, providing companies enough time to import coal ahead of the predicted rise in demand. That would be valid until June 15.

The variable tariff for these facilities will be determined by a government-appointed panel, according to the notification, and the panel will use the index with the lowest cost of imported coal to calculate the variable tariff for each facility.

The ministry anticipates a peak demand of 229 GW in April, and to meet that demand, India will need to operate 193 GW of thermal capacity that month, according to the notice.

India forecasts its power plants to burn approximately 8% more coal in the fiscal year ending March 2024, as growing economic activity and variable weather continue to drive increases in power demand.

The state of emergency has been declared for the second time in two years.

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