The Ministry of Power has invoked Section 11 of the Electricity Act to direct all captive coal-based power plants of 50 MW and above to operate at their maximum available capacity, in a bid to shore up electricity supply during the final quarter of 2026. The order takes effect from 1 October and remains in force until 31 December 2026, covering the period when industrial and seasonal demand typically surges.

Why the Government Has Acted

The ministry cited the prevailing demand-supply gap and an anticipated rise in electricity consumption as the primary drivers behind the directive. Officials noted that fully utilising every available generation source — including captive plants that ordinarily serve private industrial consumers — is essential to optimise overall power availability across the country. This is a statutory intervention, not a routine advisory.

Under Section 11, the Centre holds the authority to instruct generating companies to run their facilities according to official directions during extraordinary circumstances, bypassing normal commercial arrangements.

What Captive Plants Must Now Do

Eligible generators have been asked to produce electricity to the fullest extent of their available capacity. Crucially, any surplus power — after meeting their own captive or in-house requirements — must be offered on power exchanges in line with applicable market regulations. This effectively brings privately held generation assets into the public supply chain for a defined three-month window.

Generators have also been instructed to maintain adequate coal inventories throughout the period to prevent fuel-related outages and sustain maximum output.

Monitoring and Compliance Framework

To ensure accountability, the ministry has mandated weekly reporting to the Central Electricity Authority (CEA). Each report must cover power generation volumes, captive consumption figures, electricity sold through exchanges and other approved channels, available generation capacity, and coal stock levels. The reporting requirement signals that the government intends to track compliance closely rather than rely on self-regulation.

Broader Context and Implications

India's peak power demand has repeatedly tested grid limits in recent years, with shortfalls recorded during both summer and winter quarters. The invocation of Section 11 is not unprecedented — the Centre has used the provision before during supply crunches — but directing it specifically at captive coal stations of this scale reflects the urgency of the anticipated shortfall heading into Q4 2026.

Notably, captive plants have historically operated outside the public supply mandate, serving the industrial units that own them. Bringing this capacity to market, even temporarily, could meaningfully improve peak-hour availability without requiring new infrastructure investment.

The government expects the measure to enhance electricity availability nationwide and ease peak demand pressure through the close of the year — though whether it will fully close the demand-supply gap will depend on how consistently generators maintain both output and coal stocks over the three-month window.