India mandates maximum operation of captive coal plants amid record demand and fuel shortages

The Indian government has ordered 112 captive coal-fired power plants to operate at full capacity from October to December to prevent power shortages during a period of unprecedented demand and dwindling fuel stocks amid hot weather conditions.

India has ordered 112 captive coal-fired power plants to run at maximum output from October 1 to December 31 as the government moves to shore up electricity supply during a period of unusually strong demand. The directive, issued under emergency powers in the Electricity Act, applies to industrial generators with installed capacity of at least 50 MW and reflects official concern that higher consumption and thin coal inventories could strain the grid later this year.

According to reports in the Indian press, the order covers plants run by major industrial groups across sectors including steel, aluminium, cement, oil refining and energy. Companies named in coverage include Vedanta, Tata Steel, Hindalco Industries, JSW Steel, UltraTech Cement, Reliance Industries, Indian Oil, Bharat Aluminium, Hindustan Zinc and Nayara Energy. Captive plants are typically built to meet a company’s own power needs, but under the new direction any surplus electricity must be sold on the market.

The Power Ministry has also tightened reporting requirements. Affected plants must send weekly updates to the Central Electricity Authority on generation, captive consumption, sales to exchanges, available capacity and coal stocks. That monitoring is intended to give authorities a clearer view of how much extra power is available and how much fuel remains on site, as the country prepares for higher demand in the final months of the year.

The move comes after India’s peak power demand reached 269 GW on September 10, the highest level recorded for that month, and as nearly 40% of coal-fired power stations were reported to have critically low fuel stocks. Hot weather linked to El Niño has added to consumption, increasing pressure on the system. The government has taken a similar step at Tata Power’s imported-coal-fired Mundra plant in Gujarat, extending an earlier order that requires the 4,000 MW station to operate at full capacity through December 31.

Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.