New Delhi: As temperatures rise across India and power demand soars, the Centre has invoked Section 11 of the Electricity Act once again to direct unutilised gas-based electricity generation capacity to ensure uninterrupted power supply and maintain grid security. “lndia's electricity demand is witnessing a sustained increase, primarily driven by economic growth and further accentuated during periods of elevated temperatures and peak demand. Also, the lndian Meteorological Department (lMD) has predicted abovenormal maximum temperatures over most parts of the country during the 2025 hot weather season (till June 2025),” said a notification issued by the Ministry of Power dated May 16.
“ln order to maximise generation from all available resources, a direction under Section 11 of the Electricity Act, 2003, was issued to all Gas-Based Generating Stations (GBSs) vide Ministry of Power letter dated 12th April 2024, mandating their operation during May and June 2024. This directive facilitated the utilisation of a substantial portion of GBS capacity. ln view of the prevailing demand-supply scenario, the anticipated increase in electricity demand, and the need to ensure uninterrupted power supply, while maintaining grid security, in the public interest, the Central Government, after due consideration, hereby issues the following directions under Section 11 of the Electricity Act, 2003, to ensure maximum generation from GBSs,” said the Power Ministry.
The government is anticipating a peak power demand of 277 GW this summer season during non-solar hours. Last year, peak power demand had touched an all-time high of 250 GW in May 2024. The highest supply of power and peak power demand met this year is recorded at about 231 GW till May 18.
“Based on the monthly demand assessment, GRID-lNDlA will inform the gas-based generating stations about the expected high demand and stress days in advance so that the Gencos can arrange for the natural gas as required,” the order said. GRID INDIA, under the Ministry of Power, will notify the gas-based generating stations (GBSs) of the expected number of days they are required to generate during a week, at least 14 days in advance, it stated.
“The GBSs notified and scheduled by GRID-INDIA on D-1 basis shall be guaranteed for dispatch at a minimum of 50 percent capacity round-the-clock during the designated high-demand period,” said the ministry.
The ministry said that gas-based stations will first offer their power to the Power Purchase Agreement (PPA) holders as per the terms and conditions of the PPA. In cases where a GBS has PPAs with multiple distribution licensees, if one of the distribution licensees fails to schedule any portion of the power as per its PPA, the unutilised power will first be offered to other PPA holders, said the ministry.
If the power is not scheduled by any of the PPA holders, any other power distribution company (DISCOM) may schedule such capacity. And if no DISCOM avails the power, gas-based stations are mandated to offer the power on the exchange. Any surplus capacity shall be made available to GRID-lNDlA to provide grid support and despatch would be as per real-time Grid requirement, said the Power Ministry.
For PPA holders, the power will be offered at the Energy Charge Rate (ECR) determined by a commission chaired of the Central Electricity Authority (CEA) Chairperson and including CEA Member (E&C), Additional Power Secretary (Thermal & OM), GAIL’s ED (Marketing) and CEA Chief Engineer (F & CA) as members. “The Committee’s responsibility shall be to ensure that the benchmark rates for procured power cover all prudent costs incurred by GBSs, including natural gas price, transportation costs, boil-off charges, LC charges, customs duties, insurance, re-gasification charges, VAT/localtaxes etc,” said the ministry.
The benchmark rates will be reviewed every 15 days by the commission, taking into consideration the change in the price of natural gas, transport costs etc. The government has mandated gas-based stations to offer the power in the power exchanges/other market segments or for dispatch by GRID-IND|A for grid support at a rate not mere than 120 percent of the ECR, plus intra-state transmission charges as applicable.
“In case of the GBSs with PPAs, the realisation above the ECR shall first go to meet the fixed costs. The liability for payment of fixed costs, to the extent not realised from sale in the market or dispatch for grid support, shall remain with the PPA holder(s) as per the PPA,” said the ministry. lf the GBSs are scheduled for grid support, they shall be compensated at the offer price, it added.
