Govt Directs Imported Coal-Based Power Plants To Operate at Maximum Capacity Till Sept

Due to increasing temperatures and a surge in power demand, the power ministry has instructed all imported coal-based power plants to operate at full capacity until September. In February, the ministry had implemented Section 11 of the Electricity Act starting from 16 March for a three-month period, and this order remains valid until 15 June. The decision to extend the directive until September has been made in light of the country's peak power demand reaching a new record high of 223 GW on Friday. 

In a letter addressed to imported coal-based power plants on Monday, the ministry stated, "It has been decided to extend the time period for the Section 11 directive to imported coal-based generators until 30 September 2023."

As temperatures rise and monsoons are delayed, power demand throughout the country has been steadily increasing since the beginning of this month. Data from the Grid Controller of India indicates that the peak power demand on Sunday reached 206.6 GW. The power ministry anticipates that the peak demand will reach a high of 230 GW this year. 

To ensure sufficient power availability during the summer season, the government has taken various measures. Earlier this year, the power ministry directed power generation companies (gencos) to blend 6 per cent of imported coal until September, and all gas-based power plants were instructed to operate at full capacity during periods of peak demand. 

The power ministry is actively monitoring and coordinating with the ministries of coal and railways to increase coal production and dispatch as much as possible. They have also urged all power generators to import the necessary coal for blending in a timely manner to maintain adequate coal stocks at the plants. Additionally, efforts are being made to maximise coal production from captive coal blocks and secure additional supplies of gas from GAIL for running gas-based power stations during high-demand months. 

Ratings agency ICRA recently projected a modest growth of 5-5.5 per cent in power demand for FY24 compared to the previous fiscal year. They expect the plant load factor (PLF) of thermal power plants in India to improve from 64.2 per cent in FY23 to 65.1 per cent in the current fiscal year, driven by the growth in electricity demand and limited capacity additions. 

While the estimated demand growth for FY2024 is higher than the historical average of the past 10 years, it is lower than the peak of 9.6 per cent observed in FY2023, which was supported by a severe heat wave, favourable base effects, and an economic recovery, according to a recent statement by ICRA.