Revised SHAKTI policy simplifies coal linkage; promotes thermal capacity addition

In a big improvement, the Cupboard Committee on Financial Affairs (CCEA) on Wednesday accepted the revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) policy for coal allocation to the Energy sector.

The revised policy additionally focuses on creating avenues for organising extra coal-based energy vegetation (at pit head), a essential train to satisfy future base load necessities. Energy Ministry is already implementing plans to arrange a “minimal” 80 gigawatt (GW) coal fired capacity by 2032.

In a bid to boost ease of doing enterprise within the coal sector in addition to promote addition of thermal energy capacity, the Coal Ministry had proposed adjustments to the SHAKTI policy, together with enabling thermal energy vegetation (TPPs) to plan their coal requirement each for the long-and brief time period.

“With the introduction of Revised SHAKTI policy, present eight paras, for coal allocation, have been mapped to solely two Home windows, within the spirit of ease of doing Enterprise. Window-I (coal linkage at notified worth) and Window-II (coal linkage at premium above notified worth),” the federal government stated.

Ease of doing enterprise

Beneath Window-I, the prevailing mechanism for grant of coal linkage to Central Sector Thermal Energy Tasks (TPPs) together with Joint Ventures (JVs) and their subsidiaries will proceed.

Moreover, linkages to be earmarked to States as per present mechanism, on the advice of the Energy Ministry. Coal linkage earmarked to States could also be utilised by States in its personal Genco, Unbiased Energy Producers (IPPs) to be recognized via Tariff Primarily based Aggressive Bidding (TBCB) or present IPPs having Energy Buy Settlement (PPA) underneath Part 62 of the Electrical energy Act, 2003 for organising of a brand new growth unit having PPA underneath Part 62, it added.

On Window-ii, the federal government stated “Any home coal-based energy producer having PPA or untied and likewise Imported coal-based energy vegetation (in the event that they so require) can safe coal on public sale foundation for a interval upto 12 months or for the interval of greater than 12 months upto 25 years by paying premium above the notified worth and offering the ability vegetation the pliability to promote the electrical energy as per their alternative.”

One other essential situation dealt with by the revised policy is rationalising linkages. With an goal to cut back the ‘landed value’ of coal at TPP finish, coal supply rationalisation might be achieved. This is not going to solely ease up railway infrastructure however would additionally finally lead to decreased tariff for electrical energy customers.

Extra thermal capacity

The revised SHAKTI Policy, in addition to supporting Brownfield growth, will promote organising of Greenfield Thermal Energy Tasks primarily at pithead websites i.e. nearer to the coal supply, the federal government stated.

“Requirement of PPA has been fully achieved away with for promoting the electrical energy generated via the coal secured underneath Window-II, thereby offering the ability vegetation the pliability to promote the electrical energy as per their alternative,” it added.

Moreover, permitting versatile linkage for brand spanking new capacity addition with or with out PPA with a tenure starting from 12 months to 25 years will encourage IPPs to plan new thermal capacities, which can assist in attaining the longer term thermal capacity addition.

Revealed on Might 7, 2025