In a recent press conference, the Minister for Power and Renewable Energy, RK Singh, revealed a comprehensive four-pronged strategy employed by the government to tackle the escalating power demand in the country. This strategy encompasses directing all power generating capacities to be fully available for scheduling, authorising coal imports for blending by power generating companies (GENCOs), expedited capacity addition, and the standby utilisation of gas-based capacities.
Minister Singh emphasised the urgency of these measures, stating, “If the peak power demand keeps on increasing, India requires capacity addition as fast as possible to meet the growing demand.”
The minister convened with counterparts from various states and union territories during a National Conference of Power and New & Renewable Energy Ministers of States & UTs. During the meeting, Minister Singh directed all state power generators to ensure that all their generating units operate at full capacity. He emphasised, “States cannot run their power plants at full capacity and then request the Central government to allocate power from the Central pool. The Central pool will be used to compensate for any shortfalls that arise after states have fully utilised their power plants.”
To prevent any idle power generation capacity, the government plans to implement a rule stipulating that fixed charges will be payable to GENCOs only when they declare their full capacity as available for scheduling, either through Power Purchase Agreements (PPAs) or on the power exchange. Minister Singh explained, “We have ensured that all capacities have to run, and we are also going to introduce a rule under which GENCOs will receive fixed charges only if they offer their capacity for scheduling either through the PPA holder or on the exchange. No one can keep their capacity idle, whether it’s domestic coal-based or imported coal-based plants. Increased power availability on the exchanges will contribute to lower costs.”
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Regarding the government’s mandate for domestic coal-based plants to import 6 percent coal until March next year for blending, Minister Singh clarified that this measure is necessary due to the persistent increase in power demand. He stated, “Despite the rise in coal production by Coal India, India still requires coal imports, as power demand has surged by at least 20 percent every month over the last three months.” Official figures indicate a gap between coal supply and consumption by thermal power plants, reaching 4.1 MT in April, 1.9 MT in May, 3.9 MT in June, 2.4 MT in July, 7.1 MT in August, 8.3 MT in September, and 6.6 MT in October.
