The emergency is to functionalize idle coal import-based utilities
Following the financial stress and high international prices of coal, the government on Friday have evoked an emergency law. It is a bid to start the generation of many idle power plants running on imported coal. The production power is running low because of stress and high prices.
The industry is facing the worst power crisis in the last six years. The officials are arranging supplies for power plants. These pre-summer inventories are on a nine-year low. This is because the power demand is expected to rise at the fastest rate in at least the last 38 years.
Over 43% of plants are fired by imported coal, having a total capacity of 17.6 gigawatts (GW), accounting for 8.6% of the country’s total power capacity, which is non-functional.
The officials from the ministry of power will work on debt restructuring of financially stressed idle plants to make them operational. On the other hand, a government committee will facilitate passing on higher costs of generation to customers, a government order said.
In a report from Reuters last month, India’s decision to invoke the emergency clause in the electricity law will allow the idle power plants to be functionalized. The government estimates to bring online 10,000 Mega Watts (MW) of power daily from these coal plants. The plants have a total capacity of 17,600 MW which has been shut as the Power Purchase Agreement (PPA) did not allow pass-through of a higher cost of imported coal which priced shy high four times in the past year.
The costs will be worked by the formed committee. The panel will ensure the benchmark rate of power is worked out to meet all the prudent costs of importing costlier coal. The government is also to put a lot of onuses on the states to tide over the power crisis. This comes after the demand went up by 20 percent due to the prevailing hot weather conditions.
Section 11 of the law is invoked to compel imported coal-based plants to begin functioning. There is a mismatch between the daily arrival of coal and declining stocks of coal at the power plants. The blending of the imported coal was at 37 million tonnes in the year 2015-16 which is stroke down to negligible amounts currently.
The plan from the emergency clause is to reopen 100 coal mines that were non-operational into utility based.
Published by: Gargi Sharma
Edited by: Aaradhana Singh
