⚡ Quick Read
- What happened: The Ministry of Power has invoked Section 11 of the Electricity Act to mandate full-capacity generation at the 4 GW Mundra thermal plant from April 1 to June 30, 2026.
- Why it matters: The move signals government prioritization of base-load thermal power to manage peak demand, which is projected to hit 289 GW in FY 2026-27.
- Watch: Potential extension of Section 11 directives to other thermal assets and the impact of LPG shortages on residential electricity consumption.
Background and Context
As India braces for an intense summer, the Ministry of Power (MoP) has initiated emergency measures to ensure grid stability. With the Central Electricity Authority (CEA) projecting a peak power demand of 289 GW for the 2026-27 financial year—a significant jump from the 242.49 GW peak recorded in FY 2025-26—the government is leaving little to chance. The decision to invoke Section 11 of the Electricity Act is a strategic move to preempt supply-side constraints during the critical summer months when temperatures are expected to remain high.
Key Details
The MoP’s directive specifically targets Coastal Power Gujarat, a Tata Power-owned entity operating a 4 GW plant in Mundra. The facility, which utilizes imported coal, had previously ceased operations but is now required to run at full capacity from April 1 through June 30, 2026. To facilitate this, the plant has executed supplementary power purchase agreements with Gujarat Urja Vikas Nigam, as well as utilities in Maharashtra, Rajasthan, Punjab, and Haryana.
The government has mandated that the plant maintain coal stocks in accordance with existing regulations and submit weekly generation reports to the MoP. Non-compliance will result in penalties. Furthermore, the MoP has indicated that this emergency provision could be extended to other power plants if the prevailing demand-supply situation necessitates further intervention.
What This Means for EPCs and Developers
For EPC contractors and renewable energy developers, this policy shift underscores the continued reliance on thermal power as a primary grid stabilizer. While India added 8.8 GW of coal-based capacity in FY 2025-26, it fell short of the 12 GW target. The government’s plan to add 34.7 GW of coal capacity by FY 2030-31 suggests that thermal power will remain a dominant force in the energy mix for the foreseeable future.
Additionally, external factors such as the ongoing US-Israel conflict have disrupted LPG imports, leading to a surge in electric stove usage. This shift, combined with potential commercial kitchen transitions to electric cooking, places added stress on the grid, particularly during evening hours when solar generation tapers off. The shutdown of the 370 MW Yelahanka gas-based station due to supply shortages further complicates the grid balancing act, reinforcing the government’s focus on coal-based thermal assets to bridge the gap.
What Happens Next
The industry must monitor whether the MoP expands Section 11 mandates to other idle or underutilized thermal plants. With the Met Department forecasting heat waves and the potential for increased residential electricity demand due to the LPG crisis, the margin for error in grid management is slim. Developers should account for potential grid curtailment risks during peak summer months as the government prioritizes thermal output to maintain national power security.
