Ministry of Power Directs Coastal Gujarat Power Ltd. to Run Imported Coal Plant at Full Capacity for Summer Demand

The Ministry of Power (MoP) has directed Coastal Gujarat Power Ltd. to operate its imported coal-based power plant at full capacity from April 1 to June 30, 2026, under Section 11 of the Electricity Act, 2003, citing rising electricity demand during the summer months.

Under the order, power from the plant will first be supplied to existing PPA holders. Any unscheduled or surplus power will be sold through power exchanges. If any DISCOM does not requisition its allocated power, that quantity may be offered to other procurers or sold on the exchange. 

A committee comprising representatives from the Ministry of Power, CEA and NTPC will determine a benchmark tariff every 15 days, factoring in imported coal prices, shipping, O&M costs and a fair margin. Procurers may either pay this benchmark tariff or negotiate a separate mutually agreed rate with the generator.

The fixed charges will continue as per existing PPAs. Weekly payment by procurers has been made mandatory, backed by an unconditional letter of credit or advance payment. If a procurer fails to maintain payment security or make weekly payments, CGPL will be free to sell the power on the exchange without requiring the procurer’s consent.

The order also states that any net profit earned from sale of unutilised power in the exchange will be shared equally between the generator and the PPA holder on a monthly basis.

To prevent excessive fuel cost claims, the Ministry has capped the Energy Charge Rate at the lowest of three benchmarks: imported coal index-linked cost, coal cost after deducting mining profit, or actual imported coal cost. Where coal is sourced from mines owned by the seller or its group company, the mining profit must be deducted.

CGPL has also been asked to maintain adequate coal stocks, submit weekly generation and sales reports to the Ministry, and continue plant operations irrespective of pending dues. The Ministry warned that non-compliance could invite penalties under the Electricity Act.