India's imported coal-based power plants would not be penalized for default of electricity sales when selling prices on exchanges are inadequate, local media reported.
The government urged 13 imported coal-fired power plants to sell to states or on power exchanges. However, this caused anxiety among these plants as selling on power exchanges when discovered tariffs were lower could result in losses.
If the average market clearing price is less than the tariff, the generator will not be bound to sell power on the power exchange, but if higher, they will mandatorily sell on the exchange, the power ministry said.
The exemption would help ease cost burdens of imported coal-fired power plants and could encourage them to import more overseas coal to ease the domestic supply shortage.
The power ministry late last month asked all power plants to import 10% of the coal they need to build stocks amid projections of record power demand. Around 19 million tonnes should be ensured by the end of June.
On May 20, power plants had 20.45 million tonnes of coal, enough to last only seven days at the current rate of consumption, Central Electricity Authority data showed.
(Writing by Alex Guo Editing by Tammy Yang)
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