CCEA Approves Enhanced Coal Supply via Revised SHAKTI Policy

The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal under the revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) policy to enhance coal supply for thermal power plants operated by the central and state governments, as well as independent power producers (IPPs).

First introduced in 2018 to support financially stressed power units, the updated SHAKTI framework introduces two new coal linkage windows:

Window-I: Provides coal at the notified price to central and state-owned thermal power plants. Existing allocation mechanisms for central sector projects, including joint ventures and their subsidiaries, will continue. States or groups of states may also receive coal linkages based on recommendations from the Ministry of Power.

Window-II: Offers coal to all power generation companies (gencos) through auctions at a premium over the notified price. This includes both domestic and imported coal-based producers, regardless of whether they have power purchase agreements (PPAs). These producers can sell electricity freely in the market, without restrictions.

Coal linkage auctions under this policy will be available for tenures ranging from less than 12 months up to 25 years. Implementation will be led by Coal India Ltd. (CIL) and Singareni Collieries Company Ltd. (SCCL), who will operationalize the revised guidelines.

News by Rahul Yelligetti.