Revised 26 October 2026 · v1.0.0

On 25 September 2026 the Ministry of Power issued two orders under Section 11 of the Electricity Act, 2003, the clause that lets the Centre direct generators to run in the public interest. One told every captive coal plant of 50 MW or more on a 112-entry list to generate "to the maximum extent of their available capacity" from 1 October to 31 December 2026 and to offer whatever they do not need themselves to the power exchanges. The other extended, to 31 December, the Section 11 directions on the imported-coal plant of Coastal Gujarat Power Ltd (CGPL) at Mundra. Read together with exchange data, the pattern is of a market that was short of electricity at the margin in September, while coal at power plants was holding steady. That is a different story from a fuel shortage.

What the two orders actually say

The captive-plant letter cites the "prevailing demand-supply scenario and the expected rise in electricity demand in the coming months" and gives five directions. Captive coal stations of 50 MW and above operate at maximum available capacity; they offer available surplus, after meeting their own captive demand, through the power exchanges under the applicable market rules; they keep adequate coal stock; they send the Central Electricity Authority (CEA) a weekly report covering generation, captive consumption, exchange sales, available capacity and coal stock; and the whole thing applies from 1 October to 31 December 2026. The copy list includes CEA, the regulators, every state power secretary and Grid India.

The annexure is a scanned list of names, numbered up to 112 (the scan garbles a few of the numerals; the trade press also reports 112 plants). It has no capacity column, so the post cannot total the megawatts. Judging by names, the list is steel (Tata Steel, JSW, SAIL, RINL, Jindal), cement (UltraTech, ACC, Ambuja, Shree), aluminium and zinc (Vedanta, Hindalco, NALCO, BALCO, Hindustan Zinc), refining and chemicals (IOCL Paradip, Nayara, Reliance Jamnagar, HMEL, Haldia Petrochemicals), plus sugar and paper mills. Those are industries that run their own power stations because they burn a lot of it. One line, item 88, reads only "CPP1, CPP2, CPP3 and CPP4" with no owner, so even the name count has a gap.

The CGPL letter is shorter. It recalls the Section 11 directions of 22 March 2026, valid to 30 June, extended to 30 September by a letter of 19 June, and now extends them to 31 December "in view of the prevailing power demand scenario". The queue note that prompted this post called it the third extension; by the letter's own text it is the second extension of the original March order, the third document in the series. It is copied to the power secretaries of Gujarat, Haryana, Punjab, Maharashtra and Rajasthan, which presumably are the states buying from the plant. The letter does not say so, and it states no capacity; a market-news site, Sahi, describes the plant as Tata Power's 4,000 MW Mundra project.

Section 11 has been used this way before, but not on captives

In 2023 the ministry used Section 11 on imported-coal plants. A Business Standard/PTI report of 12 June 2023 says 15 such plants were told in February to run at full capacity from 16 March to 15 June 2023, and the period was extended to 30 September. POWER magazine reports that on 23 October 2023 the direction, then running to 31 October, was extended to 30 June 2024 and involved about 17 GW. I found no earlier Section 11 order aimed at captive plants. That does not prove there was none; I searched the web and the ministry's site only for 2022 to 2026 imported-coal orders and did not check the ministry's full archive. How the 2023-24 orders ended, and whether the 2026 CGPL order has precedents beyond what is above, I could not confirm from documents I opened.

The exchange was already pricing a squeeze

The Indian Energy Exchange's September release (reproduced by JM Financial on 6 October) says peak demand touched 269 GW on 10 September 2026, energy consumption was 162 billion units (up 11% on the year), and buy bids in the day-ahead market (DAM) rose 281% year-on-year. The DAM average clearing price was ₹7.3 per unit, up 105%; the real-time market (RTM) averaged ₹6.9, up 108%. The same release puts DAM volume at 4,251 MU, up just 0.5%. Far more was bid; almost no more cleared. That is what scarcity looks like on an exchange.

For August, Mercom's report on IEX's August figures gives a DAM average of ₹4.88 and an RTM average of ₹4.41, with 169.01 billion units consumed.

The percentage changes are my arithmetic on the two reports' rounded figures. Prices rose by half in a month while total consumption was lower in September than August. The squeeze is therefore not about how much electricity India uses in a month; it is about having enough dispatchable supply at the hours when demand peaks. A captive plant that runs flat out adds supply in every hour, which is precisely what the ministry says it wants ("optimal availability of power").

The coal stock is stable, and that does not contradict the squeeze

The Coal Ministry's early-October note, as carried by All India Radio, says stocks at domestic coal plants have stayed above 18 MT since 29 September, at 18.205 MT on 10 October, with 469 rakes a day loaded for the power sector in 1 to 10 October against 426 in September. The fuller figures come from Indian Masterminds' write-up of the ministry's data.

Stock stood at 18.932 MT on 29 September, so "stable above 18 MT" describes where the fall stopped, after a September drop of about 7.28 MT. Adding the 0.06 MT daily draw-down to the 2.49 MT daily supply implies burn of about 2.55 MT a day, and 18.2 MT then covers roughly seven days (my arithmetic). So the two facts fit together: plants have coal, enough for a week at current burn, and supply has been above the planned 2.37 MT a day on nine of ten days. Whether there is enough generating capacity running at the right hour is a separate question, and the Section 11 orders and the exchange prices address that one. It also explains clause (c) of the captive order, which makes the owners responsible for their own coal: a captive plant told to run harder will burn more.

Why it matters

This is a second, small piece of evidence on a theme this blog raised on distribution losses: the headline supply picture and the fine print differ. The ministry cites "the expected rise in electricity demand" as the reason for both orders but publishes no shortage or capacity number in either letter. The weekly CEA reports required of the 112 plants would settle how much power the order actually moves; they are not public, and I have seen no commitment to publish them. If they were, three numbers would answer the question: surplus offered, surplus cleared, and the price it cleared at.

Sources: Ministry of Power letters of 25 Sep 2026 (captive, PDF; CGPL, PDF); IEX September 2026 release via JM Financial; August 2026 via Mercom; Ministry of Coal data via All India Radio and Indian Masterminds; 2023 precedents via Business Standard/PTI and POWER; plant count cross-check Indian Masterminds; CGPL capacity Sahi (secondary, unverified). Exchange and coal figures are second-hand reproductions of IEX and ministry releases, not the original files.

About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.