Power Generators To Sell Surplus Electricity in Market

The Ministry of Power (MoP) is urging power generation companies (GENCOs) to sell their unutilized electricity in the power market. This move aims to optimize national power capacity and address concerns about unused generation potential. This clarification was issued on April 22, 2024.

The Ministry has observed that some power generators are not offering surplus power (beyond their contracted commitments) in the market. This leads to unused capacity at the national level, potentially impacting grid efficiency.

The Regulations:

Some power producers raised concerns about existing Fuel Supply Agreements (FSAs) restricting the use of coal for purposes beyond long-term contracts with DISCOMs (power distribution companies). Hence, the Ministry has clarified that generators, including those with long-term FSAs, can sell surplus power in the market as per the Electricity Act and related regulations.

Benefits of Selling Surplus Power:

  1. Increased utilization of available generation capacity.
  2. Improved grid efficiency and potential cost savings.
  3. More competitive power market with potentially lower prices for consumers.