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Section 11 of Electricity Act

Date: 09 May 2022 Tags: Bills & Laws

Issue

The government has invoked Section 11 of the Electricity Act and asked all imported coal-based power units to run at full capacity.

 

Background

The power demand across the country has soared due to intense heat-wave. This has caused shortage of coal to run thermal power plants.

 

Details

  • The demand for power has gone up by 20 percent. The supply of coal has gone up but it is not enough to meet the increased demand for power. 

  • Since there is a mismatch between coal consumed for electricity generation and coal supply, the stocks at the power plant has been declining.

 

Power demand

  • The power demand in India has seen an all-time high of 207.1 gigawatts (GW) on April 29.

  • This comes amidst demand from households due to heat-wave and a pick-up in industrial demand.

  • Power producing companies of states have been asked to import at least 10 percent of their requirement of coal for blending.

 

Section 11 of Electricity Act

  • Section 11 of Electricity Act empowers the government to ask power generating companies to operate and maintain output in accordance with directions given.

  • The term “extraordinary circumstances” can relate to circumstances providing threat to security of the state, public order or natural calamity or such other issues arising in the public interest.

 

Circumstances leading to crisis

  • The price of international coal is around $140 per tonne, which has reduced import of coal for blending purposes. The demand for domestic coal has increased.

  • The power purchase agreements between coal power plants and states do not allow for passing on the entire increase in international coal price.

  • Many plants have been forced to shut down or reduce running capacity in order to offset losses.

 

Benefits

Power plants with capacity 7,800 MW operating on imported coal may benefit from the government’s new measures. 

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