India weighs rule to maximise output at imported-coal plants, sources say
- India has power plants built to run on imported coal that could generate nearly 17 gigawatts
NEW DELHI: India is weighing the use of an emergency clause that would force coal power plants that run on imported coal to maximise output ahead of the summer season, as the U.S.-Israeli war on Iran has hit gas supplies, three industry sources said.
The country expects peak power demand to touch 270 gigawatts during the summer, India’s federal power minister Manohar Lal Khattar said at an industry event on Thursday.
The power ministry did not immediately respond to Reuters’ request for comments.
India has power plants built to run on imported coal that could generate nearly 17 gigawatts, located in the coastal areas of the country.
India is ready for unprecedented coal power demand in summer
It is expensive to generate power using imported coal compared with cheaper domestic coal. Under the emergency provision, a government‑appointed panel will set the rate at which power will be purchased from the plants, based on the cost of the imported coal.
Tata Power’s 4 GW imported coal-fired plant in Mundra, Gujarat, has not operated for the past six months after the government last year withdrew the emergency clause that compensates companies for generating power using expensive imported coal.
Reuters reported early this month that India will likely lean more on its coal capacity to meet peak power demand this summer as LNG supplies tighten due to the Mideast crisis.
The gas crisis and the absence of 4 GW of coal capacity from Tata Power’s coal plant have led the government to explore the option to run all coal plants including the imported coal plants at maximum capacity, the sources said.
Meanwhile, India has invoked emergency provisions, reprioritising natural gas supplies to key sectors such as households and fertiliser plants, leaving gas-based power plants with fewer options.
The gas-based power plants, which are generally idle, are used when the country sees sudden surge in power demand.
The power ministry did not immediately respond to Reuters’ request for comments.
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