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The Revised SHAKTI Policy 2025, which promotes transparency and flexibility by streamlining coal allocation for thermal power plants

The Revised SHAKTI Policy 2025, which promotes transparency and flexibility by streamlining coal allocation for thermal power plants through two streamlined windows, has been approved by the Cabinet Committee on Economic Affairs (CCEA)

Deeksha Upadhyay 08 May 2025 14:14

The Revised SHAKTI Policy 2025, which promotes transparency and flexibility by streamlining coal allocation for thermal power plants

Concerning the Updated SHAKTI Policy 2025:

Ministry of Coal (MoC) and Ministry of Power (MoP) are the nodal ministries.

Goals: Assure demand-driven, adaptable, and transparent coal allocation.

Encourage the planning of long-term thermal power capacity.

Promote the replacement of coal imports and streamline logistics.

Make deeper power markets and market-driven electricity pricing possible.

Important Aspects of the Updated SHAKTI Policy

Two-Window Design

For Central/State Gencos and IPPs with Power Purchase Agreements (PPAs), Window-I (Notified Price) applies.

Coal is distributed by tariff-based bidding or nomination.

Any power generation, including imported coal-based (ICB) plants, is eligible for Window-II (Premium Basis). PPA is not necessary. the ability to sell power via bilateral agreements or markets.

Essential Changes and Notable Features

Simplification: The earlier 8 coal linkage categories are now consolidated into only two windows.

No PPA Mandate (Window-II): Allows plants to freely trade power in power exchanges or through contracts.

Support for Private Sector: Enhances Independent Power Producers (IPPs) and private funding in thermal industry.

Assistance for Greenfield and Brownfield Initiatives: Particularly in proximity to pithead sites for economical benefits.

Import Substitution: ICB facilities can transition to local coal, minimizing foreign exchange expenditure.

Coal Optimization: Decreased landed expense and streamlined rail logistics lower ultimate tariffs.

Flexibility for FSA Holders: Eligible to bid for coal exceeding annual quota through Window-II.

Market Connections: Facilitates the sale of excess electricity in energy markets, improving market fluidity.

Empowered Committee: Led by the Secretaries of Power and Coal, along with the Chairperson of CEA, to quickly address implementation challenges.

No Extra Costs: No financial pressure on coal companies.

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