Cabinet Committee on Economic Affairs, chaired by PM Modi, approved the revised SHAKTI policy for coal allocation to the power sector on 7th May.
The revised policy introduces two windows:
- Window I: Coal linkage at a notified price for central/state gencos and their subsidiaries.
- Window II: Auction-based coal linkage at a premium above the notified price for all domestic coal-based power producers.
Window I continues the existing mechanism where coal is allocated to state and central sector thermal plants on the Ministry of Power’s recommendation. States can use this coal for their own power generation companies.
Window II allows producers with power purchase agreements or imported coal-based units to buy coal for 12 months to 25 years and sell electricity freely.
The revised SHAKTI policy simplifies the previous eight allocation categories into two windows, aligning with the ease of doing business initiative and addressing the dynamic coal needs of the power sector.
The policy supports brownfield expansion, encourages greenfield thermal plants near coal sources, and aims to reduce coal imports.
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