Revised SHAKTI Policy To Boost Power Sector With Simplified Coal Allocation

(MENAFN- KNN India) New Delhi, May 8 (KNN) The Cabinet Committee on Economic Affairs (CCEA), has approved significant revisions to the SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy for coal allocation to the power sector.

The revised policy simplifies the existing framework by consolidating multiple allocation paragraphs into just two operational windows.

Under the updated policy structure, Window-I will provide coal linkages to Central Government power generation companies and state entities at notified prices.

This window maintains the existing mechanisms for Central Sector Thermal Power Projects, including Joint Ventures and their subsidiaries.

States will continue to receive coal linkage allocations based on recommendations from the Ministry of Power, with flexibility to utilise these allocations through various channels.

Window-II introduces a premium-based allocation system, allowing any domestic coal-based power producer with Power Purchase Agreements (PPAs), untied capacity, or imported coal-based plants to secure coal through auctions.

These allocations can range from short-term periods of up to 12 months to long-term arrangements extending to 25 years. Notably, this window offers power plants complete flexibility in electricity sales arrangements.

The government anticipates that the revised policy will generate multiple economic benefits, including increased power generation, lower electricity tariffs, and positive economic impacts.

The policy allows linkage coal to be used for generating power from Un-requisitioned Surplus capacity, potentially deepening power markets by increasing availability in power exchanges.

The policy also encourages pit head thermal capacity addition while enabling imported coal-based plants to reduce their dependence on foreign coal sources, strengthening India's energy independence and security.

(KNN Bureau)

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