Steps taken by Government to resolve stress in thermal power plants

The following steps have been taken by the Government to resolve the stress in thermal power sector:

  1. Government of India constituted a High Level Empowered Committee (HLEC) under the Chairmanship of Cabinet Secretary to address the issues of stressed thermal power projects. The Government thereafter constituted a Group of Ministers (GoM) to examine the specific recommendations of HLEC. The Government approved the recommendations of Group of Ministers (GoM). Subsequently, Ministry of Power on 08.03.2019 notified the approval of the Government on the following decisions:
  1. Coal for short term sale of power in Day Ahead Market (DAM) or Discovery of Efficient Electricity Price (DEEP) portal.
  2. Coal linkage for short term sale of power in case of termination of PPAs due to payment default by DISCOMs.
  3. Central and State generating companies can act as an aggregator of power and offer that power to the DISCOM against their existing PPAs to such DISCOMS.
  4. Mechanism evolved to ensure that net surplus generated by the developers, shall be entirely used for servicing debt in the first place.
  5. Projects with long term PPA and who could not participate in first round of linkage auctions under B(ii) of SHAKTI to be allowed to participate in subsequent rounds.
  6. Projects which participated in first round of linkage auctions under B(ii) of SHAKTI but could not secure linkage for full ACQ quantum to be allowed to obtain linkage for balance quantity under subsequent rounds.
  7. Auctions under SHAKTI B(iii) to be held at regular intervals.
  8. 50 percent of the total coal meant for e-auction for power has been earmarked for Special forward e-auction.
  9. Short supplies of coal will not lapse upto 3 months.
  10. Annual Contracted Quantity (ACQ) to be determined based on efficiency.
  11. Mandated the payment of Late Payment Surcharge (LPS) in case of delay in payment by DISCOMs as per the provisions of PPA.
  12. Power Purchase Agreement (PPA)/Fuel Supply Agreement (FSA)/Transmission connectivity/Environment Clearance (EC)/Forest Clearance (FC)/Water etc. not to be cancelled if project is referred to National Company Law Tribunal (NCLT) or is acquired by another entity.
  1. PPA not to be cancelled in case of delay in commissioning of project for reasons not attributable to the generator.


  1. Pilot project for procurement of 2500 MW power: In order to address the problem of lack of Power Purchase Agreements (PPAs) in the country, the Ministry of Power had notified a scheme for procurement of 2500 MW on competitive basis for a period of 3 years from the generators with commissioned projects having untied capacity.
  • 1st Round (2500 MW): Letter of Award (LOA) was issued to all the successful bidders (1900 MW) – PPA signed for 1900 MW.
  • 2nd Round (2500 MW): Bid Security from 21 bidders for a total capacity of 6000 MW was received. 12 bidders were successful with a total capacity of 2500 MW.


  1. Payment Security Mechanism: National & Regional Load DespatchCentres (NLDC & RLDC) have been directed to despatch power only after it is intimated by the Generating Company and /Distribution Companies that a Letter of Credit (LC) for the desired quantum of power has been opened. This has facilitated timely payments by Discoms to the generators.


  1. Liquidity infusion under AatmaNirbhar Bharat Abhiyan: In order to alleviate the liquidity problems of DISCOMs, Government of India decided to grant a one-time permission to Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) for extending loans to DISCOMs in favour of CPSE Gencos and Transcos, Independent Power Producers (IPPs), and Renewable Energy (RE) generators.


This information was given by Union Minister for Power and New and Renewable Energy, Shri R.K. Singh in a written reply in  Rajya Sabha today.



    Source PIB