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The Union power ministry on Friday directed all power plants using imported coal to generate at full capacity, anticipating a surge in demand with another heatwave expected to singe parts of the country.

Under Section 11 of the Electricity Act, the government can ask generating companies to keep their stations running in accordance with central directions under extraordinary circumstances. An appropriate commission may offset the adverse financial impact of such directions, according to the section.

The power from these plants would be supplied to consumers having power purchase agreements (PPAs) with the generating company, and any surplus would be put on power exchanges for purchase by non-linked consumers. If states don’t buy power from these stations, the PPA quantity could move to other linked consumers or put on the exchange.

The demand-supply mismatch in peak summer has resulted in load shedding in several parts of the country.

However, rain and thunderstorms in parts of north India have reduced power demand. The maximum power demand met on Thursday was 195 gigawatts (GW), compared to last week’s 207GW. The peak power shortage has also come down to around 1,000 megawatts (MW) from 8,000MW last week.

However, the relief may be short-lived with the India Meteorological Department (IMD) predicting that another heat wave may lash parts of the country by next week. The government is working out measures to address fuel shortages, but a sudden spike in demand may create a crisis.

The government will also constitute a committee with representatives from the ministry of power, the Central Electricity Authority, and the Central Electricity Regulatory Commission to determine benchmark rate of power from these imported coal-based power projects. This will ensure that power producers who run the plant using imported coal, the price of which is two to three times more than similar domestic coal, do not run into losses from such supplies.

At present, imported coal-based power projects do not get a pass-through status in electricity tariff for any increase in fuel cost or have limited pass-through status not covering entire cost. The committee will ensure that the tariff that does not make operation of these plants uneconomic.

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