Delhi, 8 May (H.S.): The Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, has approved the Revised SHAKTI Policy for Coal Allocation to the Power Sector during a meeting on 07.05.2025. This revision builds on the initial SHAKTI Policy introduced in 2017, shifting coal allocation from a nomination system to a transparent auction-based mechanism. The new policy consolidates coal linkage categories into two Windows, promoting ease of doing business, competition, and efficiency while enhancing power generation capacity and affordability.
Key features of the revised SHAKTI Policy include greater flexibility, wider eligibility, and improved accessibility to coal. It ensures coal linkages for all power producers, leading to increased power generation, lower tariffs, and positive economic impacts, fostering employment growth. The policy supports the Atmanirbhar Bharat Initiative by ensuring reliable, affordable power that stimulates economic activities.
Additionally, the increased availability of domestic coal will aid in reviving stressed power assets while allowing un-requisitioned surplus capacity to be utilized for power generation in market sales, enhancing power market depth. These changes are expected to increase coal availability and mining activities in coal-rich regions, generating higher revenue for state governments and supporting local development.
The Revised SHAKTI Policy outlines provisions for granting fresh coal linkages to Thermal Power Plants (TPPs) across Central Sector, State Sector, and Independent Power Producers (IPPs) through two approved windows.
Window-I: This allows coal linkages to Central and State Generating Companies (Gencos) at a notified price. The existing process for granting coal linkages to Central Sector TPPs, including Joint Ventures (JVs), continues. Coal will be allocated to States and an authorized agency in line with the Ministry of Power’s recommendations. States can use this coal for their Gencos or for identified IPPs under the Electricity Act, 2003.
Window-II: Domestic coal-based power producers with Power Purchase Agreements (PPAs) or those without, along with imported coal-based plants, can secure coal via auctions for periods of up to 12 months or up to 25 years by paying a premium above the notified price. This offers flexibility in selling electricity.
The Revised SHAKTI Policy aims to maximize domestic coal use, enhance thermal capacity, reduce reliance on global coal markets, and bolster national energy independence in alignment with the government’s push for Energy Security for All.
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Hindusthan Samachar / Jun Sarkar
