Emergency Rule: Government implemented emergency law amid power crisis, foreign coal-run power plants will start again.

Taking a big decision in the midst of the ongoing power crisis across the country, the government has decided to implement the Emergency Act. The Center has asked for resumption of production in some idle power plants running on foreign coal. After this decision, power plants which are unable to produce due to high international coal prices will also be able to produce electricity.

The Ministry of Power has directed all imported coal based power plants to run at full capacity. The directive has been issued amid shortage of coal in thermal power stations and affecting power generation.

According to the ministry’s office order in this regard issued on Thursday, it has been observed that most of the states have allowed the high cost of imported coal to be passed on to the customers. This has helped commissioning of 10,000 MW capacity units out of a total capacity of 17,600 MW based on imported coal.

However, some imported coal-based plants are still not operational, the ministry said. The Ministry of Power has issued instructions under Section 11 of the Electricity Act. It has been directed that all imported coal based power plants shall operate and generate electricity at full capacity.

If imported coal based plants are under insolvency proceedings, resolution professionals will take steps to get them operational. These plants will first supply power to the PPA (Power Purchase Agreement) holders (distribution companies). The ministry said that thereafter any surplus power or any power for which there is no PPA will be sold in the power exchange.

In plants that have entered into PPAs with several discoms, and the quantum of power purchase is not fixed, the power will first be given to other PPA holders and then the remaining power will be sold through exchanges. At present, the cost of imported expensive coal under the PPA is not carried forward. In these cases, the committee constituted by the Ministry of Power will decide the rate at which power should be supplied to the distribution companies.

The committee will also have representatives from CEA (Central Electricity Authority) and CERC (Central Electricity Regulatory Commission). The committee will ensure that the standard rates of electricity are commensurate with the cost of imported coal to generate electricity, the official order said. This order will be valid till 31 October 2022.

The ministry said electricity demand has increased by about 20 per cent and domestic coal supply has increased, but the increase in supply is not enough to meet the increased demand for electricity. The ministry said that due to demand and supply gap, power cuts are taking place in different areas.
The coal reserves at the power plant have also depleted, which is depleting at an alarming rate. The international price of coal has risen at an unprecedented rate. It is currently around US$ 140 a tonne.