Govt asks States to ensure surplus power is sold in market

As mercury starts soaring, pushing higher demand for electricity, the Power Ministry on Monday asked States to ensure that generating companies (Gencos) offer surplus power in the market so that un-requisitioned electricity can be utilised in areas facing shortage.

“It has been observed that some power generators are not offering the un-requisitioned surplus power (after meeting the requirement of the medium/long term procurer) in the power market, thus resulting in unused power capacity at national level,” Power Ministry said in a note to state power departments and CMDs of all Gencos.

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Power market

Pointing out the Tariff Policy 2016, the Ministry said that power stations are required to be available and ready to dispatch at all times. For optimum utilisation of un-requisitioned generation capacity of any generating station regulated under section 62 as well as those having PPA under section 63 of the Electricity Act, 2003, the generators have been permitted to sell power in the power market in consonance with the laid down policy of the Centre.

The exercise assumes significance as India enters the peak power demand season, April to June, with peak power demand expected to hit 260 gigawatts (GW) from 240 GW in September last year.

Earlier this month, the Ministry in preparation for meeting the peak summer demand said that all thermal generating stations must offer their un-requisitioned or surplus power in power exchanges. It also directed that compliance needs to be monitored regularly and notices issued for violation of directions.

In the last week, ending April 21, the average peak power demand met during the day hit 212.70 GW. Power demand hit a high of almost 215 GW on April 18 after which it declined to 209.89 GW on Sunday. Sources said that power demand will start rising this week and into May.

Un-requisitioned power

The Ministry of Power issued guidelines in October 2021 for operationalising optimum utilisation of generating stations as per the requirement in the electricity grid.

Besides, Section 9 (5) of the Electricity (Late Payment Surcharge and Related Matters) Rules of 2022, which were later amended in 2024, also provides for sale of surplus power that is within the declared generation capacity but not requisitioned by distribution companies.

Existing FSAS

Ministry received representations from power utilities highlighting that existing Fuel Supply Agreement (FSA), through LoA route, as well as under SHAKTI B (ii) for independent power producers (IPPs) do not allow usage of linkage coal for any other purpose other than to meet the long-term power purchase agreements (PPAs) obligations with the Discoms, it said.

“It is to clarify that in accordance with the provisions of Tariff Policy, 2016 and Electricity (Late Payment Surcharge and Related Matters) Rules, as amended from time to time, allows generating company, including the generating company having long term coal linkage under FSA with coal companies, to offer the un-requisitioned surplus power in the power market,” the Ministry added.

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