Huge tax reduction for imported coal-fired power plants

NEW DELHI: The central electricity tariff the regulator ordered full payment of higher fuel costs along with a “reasonable profit margin” for imports coal-fired power generation unit was forced by the government last May to avoid widespread blackouts amid a spike in demand.
Order, issued by Central Electricity Regulatory Board on Tuesday in response to a petition by Tata Power, offered as relief for about 17 gigawatts of imported coal-based capacity. Most of these plants are operated by private power producers, including Tata Power and adani’s strength.
The Department of Electricity on May 5, 2022 invoked emergency powers under Section 11 of Electricity Act required these plants to operate at full capacity as domestic coal producers could not meet the spike in demand due to low fuel reserves.
Most of these plants using imported coal have been shut down after their consumers refused to pay higher tariffs following a spike in international coal prices.
According to the ministry’s directive, factories must give priority to consumers under the respective PPA (power purchase agreement) and only excess electricity will be sold on exchanges.
While operators turn on their plants according to government directives, the tariff is not enough to cover the increased costs.
In the case of a plant with a PPA with multiple distribution companies, if one buyer chooses not to purchase any electricity, that surplus will be made available to other PPA holders and the remainder provided. level on exchanges.


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