Captive coal plants asked to maximise output amid high power demand

India has for the first time invoked Section 11 of the Electricity Act, 2003, for captive coal-based power plants, directing plants with over 50 MW capacity to operate and generate power to the maximum extent of their available capacity in the next quarter amid high electricity demand.

Section 11 of the Act provides that the Centre may in extraordinary circumstances ask a power generation company to operate and maintain any station in line with its directions.

In the order dated September 25, seen by ET, the ministry said such power generators will offer surplus generation through the power exchanges. The directive covers over 100 captive coal-based power plants.


Captive coal plants primarily supply electricity to industrial facilities such as aluminium, steel, and cement.

Power consumption has grown by over 14% so far in September led by cooling and irrigation demand amid a deficit monsoon. Peak demand has crossed the projected 271 GW in September, unusually high for the month.

Prices on the Indian Energy Exchange in the day-ahead market trade, especially in the high price segment and in non-solar hours have touched the maximum of Rs 20 a unit on several days in the month.

The move comes amid expectations of higher electricity demand in the coming months and the need to ensure adequate power supply to consumers.

“The move will bring more liquidity in the power market and help states buy their requirements. These plants can use 51% for their consumption and sell the rest on the exchanges,” a government official told ET.

Thermal plants play a key role in meeting high power demand, especially in non-solar hours. The projected peak was at 271 GW this year, higher than last year’s summer peak of 243 GW.

According to the order, the generators will maintain adequate coal stock to ensure availability of fuel for operation of the plant and enable maximum generation.

They will also submit a weekly report to the Central Electricity Authority indicating generation, captive consumption and sale of power through the power exchanges and other permitted avenues, along with details of available capacity and coal stock.

The ministry has also extended the same provisions for Tata Power’s 4,000 MW Mundra power plant till December. ET reported the government was planning on the extension for the plant, which is already running as per the special provisions till September.