The ministry of power has proposed to allow coal-fired plants to sell power after completing agreements with buyers. The development comes despite promises being made to shut down old plants nationwide to curb pollution levels.
The proposal if approved would enable these old coal plants to earn additional revenue; increase liquidity in short-term power markets; help several states access cheaper power by easing the work of the distribution companies.
"It is in the consumer interest to keep the tariff of electricity as low as possible," said the letter sent to the power departments of states, as well and the heads of government-run utilities such as the National Thermal Power Corporation (NTPC) Ltd.
NTPC will now be able "to sell power in any mode" after the distribution companies exit an agreement post the completion of the tenure, added the ministry.
Power Minister RK Singh and Finance Minister Nirmala Sitharaman had previously said that the BJP government at the Centre plans to shut old coal-fired power plants. The Environment Ministry too, had pushed for shutting down coal plants, which account for 80% of India's industrial pollution.
Although the power ministry seems to be 'seeking comments' from state governments and the heads of government-run power generators, the proposal is yet to be converted into a unanimous consensus.
A senior power ministry official said on Sunday that only the "inefficient" plants would be shut down, reported Reuters.