The power ministry is considering extending special provisions requiring Tata Power's 4,000 MW Mundra power plant to operate at full capacity until December as electricity demand remains elevated.
The imported coal-based plant is currently operating under special provisions that are due to expire at the end of September. The Centre is considering extending the requirement because of persistently high domestic power demand.
The directive is issued under Section 11 of the Electricity Act, which allows the government to direct power-generating companies to operate and maintain generating stations in accordance with its instructions during extraordinary circumstances.
The Mundra plant has a supplementary power purchase agreement with Gujarat Urja Vikas Nigam, while discussions are underway with other states. Talks with Rajasthan, Haryana and Punjab are at an advanced stage, according to the report.
Peak power demand crossed the projected 271 GW level in September, driven by cooling and irrigation requirements following a deficient monsoon. Thermal generation consequently remains important for meeting demand, particularly during non-solar hours.
Imported coal-based power plants generally face higher generation costs than domestic coal-based units because of volatile international coal prices. The government has invoked Section 11 provisions several times in recent years when electricity demand has surged.