The Government Accepts the Updated SHAKTI Policy: Lets learn more!

The updated SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy for coal allocation to the power sector was approved by the Cabinet Committee on Economic Affairs.

The SHAKTI Policy, which was introduced by the Ministry of Coal in 2017, is an open method of allocating coal to the power sector.

Principal Points of the Updated SHAKTI Policy Objective: to reduce reliance on imported coal, encourage import substitution, and meet the sector's fluctuating coal demands. Framework for Simplified Allocation: By combining the previous eight categories into two streamlined processes, it simplifies coal allocation and improves business ease in the power industry.

Window I: Central and State Government-owned thermal power plants, as well as their joint ventures and subsidiaries, will continue to receive coal links at stated prices.

Window II: Coal can now be purchased through an auction procedure by any thermal power generators, including those who use imported or domestic coal, for a premium over the advertised price.

Elimination of Required PPAs (Power Purchase Agreements): In order to promote private sector involvement, the PPA requirement has been removed for Window-II.

Meets the Sector's Changing Coal Needs: Auctions will enable purchases for durations as little as 12 months or as long as 25 years.

Favoritism for "Pithead" power plants: Encourage the construction of greenfield thermal power projects, mainly at pithead locations, which are closer to the coal source.