Indian Government Invokes Section 11 to Mandate Full Capacity from Imported Coal-Based Power Plants

Emergency Mandate for Summer Power Generation

In a decisive regulatory intervention issued on March 22, 2026, the Ministry of Power has invoked Section 11 of the Electricity Act, 2003, to preempt a projected energy deficit during the upcoming summer peak. The directive mandates all imported coal-based (ICB) power plants to operate at maximum capacity from April 1, 2026, through June 30, 2026. This emergency measure is aimed at managing an anticipated surge in national power demand, which is projected to reach a record 270 GW this summer. The mandate specifically targets 15 ICB thermal projects, including the 4 GW Coastal Gujarat Power Limited (CGPL) facility—a critical Ultra Mega Power Project (UMPP) located at Mundra—to ensure the stability of the national grid.

Technical Context: Section 11 and Resource Adequacy Plans

Section 11 of the Electricity Act, 2003, is an extraordinary legal provision that empowers the Central Government to issue binding operational directions to generating companies in response to “extraordinary circumstances,” such as threats to national security or the “larger public interest.”

“The Ministry of Power has issued these directions considering the prevailing demand-supply scenario and the requirement for optimal availability of power in the larger public interest.”

This emergency invocation is part of a broader strategic shift toward domestic energy security. It aligns with the Ministry’s long-term “Resource Adequacy Plans” (RAPs), which are 10-year rolling frameworks designed to keep generation capacity ahead of demand. To meet the projected thermal requirement of 307,000 MW by 2034–35, the government has already envisaged the addition of a minimum 97,000 MW of coal and lignite-based capacity.

Operational Directives and Specific Plant Mandates

Under the March 22 directive, generating companies must adhere to strict compliance and reporting standards. The urgency of the mandate is underscored by the fact that while the system has an 18 GW ICB installed capacity, at least seven of the 17 identified ICB units have recently been flagged as having “critical stock” levels, necessitating immediate intervention to ensure availability.

Key Directives:

• Mundra UMPP Restart: The 4 GW Coastal Gujarat Power Limited (Tata Power) facility at Mundra must resume full-capacity operations. The plant’s viability is supported by recently executed supplementary Power Purchase Agreements (PPAs) with Gujarat Urja Vikas Nigam and utilities in Maharashtra, Rajasthan, Punjab, and Haryana.
• Inventory Maintenance: Generators are required to maintain coal stocks in strict accordance with extant regulatory norms to prevent forced outages.
• Weekly Compliance Reporting: Plants must submit weekly generation and sales data to the Ministry of Power for monitoring.
• Legal Protections: To facilitate compliance, generators operating under this Section 11 mandate will be immune from penalties imposed by procurers for availability deviations under original PPA terms.

Identified ICB Thermal Plants Subject to the Directive:

1. Coastal Gujarat Power Ltd
2. Adani Power Mundra Ltd. (TPS-I & II)
3. Adani Power Mundra Ltd. (TPS-III)
4. Essar Power Gujarat Ltd.
5. JSW Ratnagiri Ltd.
6. Tata Trombay Ltd.
7. GSECL Sikka Ltd.
8. IL&FS Tamilnadu Power Company Ltd.
9. Muthiara-Coastal Energen
10. Udupi Power
11. Simapuri Energy Ltd
12. Meenakshi Energy Ltd
13. JSW Torangallu-1 & 2
14. SEPC Power Private Ltd.
15. OPG Generation(P) Ltd.

Tariff Determination Framework

To address the high input costs of imported fuel, the Ministry has established a Benchmark Committee comprising representatives from the Ministry of Power, the Central Electricity Authority (CEA), and NTPC. This committee is tasked with determining rates that ensure cost recovery and a fair return for generators.

Allocation Hierarchy and Financial Settlements

The framework prioritizes existing contractual obligations while providing flexibility for surplus power:

1. PPA Holders: Power must first be supplied to existing Power Purchase Agreement (PPA) holders.
2. Surplus Sales: Any un-requisitioned power or surplus beyond PPA commitments shall be sold through power exchanges.
3. Dues Neutrality: The directive stipulates that plants must operate regardless of prior outstanding dues between generators and distribution companies (discoms), which are to be settled through separate legal or administrative processes.

The Impetus: Peak Demand and Geopolitical Risk

The “extraordinary” move is necessitated by a projected peak demand of 289 GW for FY2026-27, a significant increase from the 245 GW recorded in FY2025-26. This demand surge coincides with geopolitical volatility in West Asia, which has severely restricted global liquefied natural gas (LNG) supplies. Historically, gas-based plants provide approximately 8 GW of balancing power during evening peak hours when solar generation tapers off. The current uncertainty regarding gas availability has forced a strategic reliance on imported coal to bridge this critical resource gap.

Coal Inventory and Buffer Logistics

Coal India Limited (CIL) has implemented a “three-layer buffer” system to support national energy requirements, reporting a total “on-tap” accessibility of 175.5 MT as of late February 2026.

• Pithead Inventory: CIL producing subsidiaries hold 115 MT of coal stock as of February 26, 2026.
• Plant-side Stock: Stocks at domestic coal-based power plants stand at 55 MT, the highest ever recorded for this period.
• Strategic Buffer: This includes 5.5 MT in transit (ports, washeries, and goods sheds) and 60.2 MT of exposed in-situ coal ready for immediate extraction.

The benchmark rates for ICB generation will undergo a fortnightly review to adjust for international coal price volatility and shipping costs, ensuring that the mandate remains economically feasible for the duration of the summer peak.