Power crisis looms large in India; Govt invokes emergency law; What is the act, explained

Due to the growing demand for electricity provoked by the lack of coal supply, the Government of India enacted a law called the Section 11 Electricity Act in India. The shortage of coal has pushed the government to ask all imported coal-based power units to run at full capacity. The law comes under the electricity act section 11. 

Officials from the Ministry of Power have joined hands to enable those involved in restructuring the debt of financially stressed dormant plants. On May 6, Union Minister of Power R K Singh has advised state governments to place orders for imports, the Ministry of Power. 

As per a Bloomberg report, Stockpiles at coal-fired power stations have tumbled more than 14 percent since the start of April, leaving about 100 plants with critical supply levels, Institute for Energy Economics and Financial Analysis said. 

Section 11 of the Electricity Act

The act says that if a situation comes where there is a need to take necessary actions to combat the crisis which happens with the lack of electricity, then the government may ask the power generation companies to operate and maintain the production as per the instructions given. 

The situation has been considered as ‘extra ordinary’ and the extraordinary situation means a threat to the security of the state, public order, natural calamity, etc. According to the act, it is also said that an appropriate commission could be considered mitigating the adverse economic impact of the proposals on any generating company in such a way as it deems appropriate.

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According to the government, the demand for domestic coal has surged to a certain level this year and a similar surge has been seen only in 2015-2016. Significant fluctuations in coal demand compared to previous years and the unavailability of the expected large quantities of coal are considered ‘extraordinary circumstances.