Government Revises SHAKTI Policy for Coal Allocation to Power Sector

The Central Sector, State Sector, and Independent Power Producers (IPPs) Thermal Power Plants have been granted new coal linkages by the Cabinet Committee on Economic Affairs.

Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) will receive instructions on how to carry out the aforementioned decisions

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Additionally, the updated SHAKTI Policy will be communicated to the relevant Ministries and all States for subsequent distribution to the relevant Departments/Authorities and Regulatory Commissions. Benefits would accrue to state governments, end users, Coal India Limited and Singareni Collieries Company Limited, and thermal power plants.

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Following two windows have been proposed under the revised SHAKTI policy:

Coal Linkage to Central Gencos/States at Notified price: Window–I

Coal linkages to be earmarked to States and to an agency authorized by group of States as per existing mechanism, on the recommendation of Ministry of Power. Coal linkage earmarked to States may be utilized by States in its own Genco, Independent Power Producers (IPPs) to be identified through Tariff Based Competitive Bidding (TBCB) or existing IPPs having Power Purchase Agreement (PPA) under Section 62 of the Electricity Act, 2003 for setting up of a new expansion unit having PPA under Section 62.

Window-II (premium over notified price):

Any domestic coal-based power producer having PPA or untied and also Imported coal-based power plants (if they so require) can secure coal on auction basis for a period upto 12 months or for the period of more than 12 months upto 25 years by paying premium above the notified price and providing the power plants the flexibility to sell the electricity as per their choice.

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