New Delhi: The Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, has approved a revised version of the SHAKTI scheme (Scheme for Harnessing and Allocating Koyala Transparently in India) to improve the process of coal allocation to the power sector.
The revamped policy is intended to simplify coal linkage procedures and ensure a consistent supply of coal to meet both short-term and long-term demands of power generation companies.
According to a statement from the Ministry of Coal, the updated policy allows for fresh coal linkages to thermal power plants across central and state sectors, including independent power producers (IPPs).
The revised SHAKTI scheme offers coal under two pricing mechanisms: one based on notified prices and the other at a premium above the notified price.
Under the notified price segment, the existing mechanism for granting coal linkages to central thermal power projects, including joint ventures and subsidiaries, will remain in place.
States will also be allowed to utilize their allocated coal for their own generating companies or assign it to IPPs identified through tariff-based competitive bidding.
Existing IPPs with valid power purchase agreements will be eligible to use this coal for setting up new or expansion units.
In the second segment, where coal is offered at a premium over the notified price, domestic coal-based power producers—including those with untied capacity—as well as imported coal-based power plants, if required, will be able to secure coal through auctions.
These linkages may be granted for durations ranging from less than a year to up to 25 years, depending on the project’s requirement.
The policy confirms that coal linkages for central sector power projects will continue to be allocated on a nomination basis, following recommendations from the Ministry of Power.
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Similarly, states will receive nominated linkages which they can use for their own power utilities or for IPPs, in accordance with their energy needs.
The revised SHAKTI policy is expected to enhance transparency, strengthen energy security, and reduce the power sector’s dependence on imported coal by improving access to domestic coal resources.
