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Home / Business / If states sell electricity on power exchanges, Centre to curb supplies

If states sell electricity on power exchanges, Centre to curb supplies

The power ministry asked utilities, reliant on local coal, to import up to 10% of coal needs to blend with the domestic grade to meet increased power demand
Representational image.

Our Special Correspondent   |   New Delhi   |   Published 13.10.21, 12:54 AM

The Centre on Tuesday warned states that power PSUs will curb their supplies if they are found selling electricity on power exchanges to cash in on surging prices.

 On Tuesday, the power ministry asked utilities, reliant on local coal, to import up to 10 per cent of coal needs to blend with the domestic grade to meet increased power demand.

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The power ministry on Tuesday also asked states to utilise unallocated power of the central generating stations (CGS) to meet the requirements of their own consumers amid the ongoing coal shortage crisis in the country.

“It has been brought to the notice of the Ministry of Power that some states are not supplying power to their consumers and imposing load shedding. At the same time, they are also selling power in the power exchange at high price,” a power ministry statement said.

As per the guidelines for allocation of power, 15 per cent power from CGS is kept as “unallocated power” which is allocated by the central government to needy states to meet the requirement of power of the consumers.

The responsibility to supply power to the consumers is of the distribution companies and they should first serve their consumers who have the right to receive 24x7 power.

Thus, the distribution companies should not sell the power in the power exchange and starve their own consumers, it stated.

“The states have therefore been requested to use the unallocated power for supplying electricity to the consumers of the state. In case of surplus power, the states have been requested to intimate to the government of India so that this power can be reallocated to other needy state,” it said.

In case any state is found that they are not serving their consumers and selling power in the power exchanges at higher rate, the unallocated power of such states shall be withdrawn and allocated to other needy states, it added.

PMO meet

Prime Minister’s Office (PMO) on Tuesday reviewed the coal supply and power generation scenario as the government looks at ways to defuse the energy crisis being faced by several states. 

At the meeting over coal shortage at power plants which have led to blackouts in some states, power secretary Alok Kumar and coal secretary A.K. Jain made a presentation on coal and power availability, sources said.

NCP fumes

The Nationalist Congress Party (NCP) on Tuesday alleged the Modi government was responsible for the current shortage of coal in the country, which has caused a shortfall of the fuel supply to several power plants, according to PTI.

Talking to reporters, NCP spokesperson Nawab Malik said many power plants are not operational due to the shortage of coal. Despite importing the fuel, the shortfall remains. This is also leading to spending the foreign exchange, he said.

During the tenure of the erstwhile UPA government, the then Prime Minister Manmohan Singh had come up with a coal policy keeping in mind the electricity requirements of the country in the future, he said. But the BJP, then in the Opposition, alleged a coal scam and the policy had to be rolled back, said Malik, a senior minister in the Maharashtra government.

India is the world’s second largest coal producer, with the world’s fourth largest reserves, but a steep surge in power demand that has outstripped pre-pandemic levels means state-run Coal India’s supplies are no longer enough.

Increased economic activity after the second wave of the pandemic has driven up demand for coal leading to a supply shortage, forcing north Indian states like Bihar, Rajasthan and Jharkhand to undertake power cuts for up to 14 hours a day.



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