SHAKTI Policy

Current Context : The Government of India approved a revised SHAKTI policy (Scheme for Harnessing and Allocating Koyala Transparently in India) to streamline coal linkages for thermal power plants.

About the Revised SHAKTI Policy

• Announced by: Ministry of Coal, approved by Cabinet Committee on Economic Affairs
• Objective: Simplify coal allocation and ensure coal availability for power generation
• Structure:
  • Window I: Coal at notified price for Central/State TPPs
  • Window II: Coal via auction at premium for private players (even without PPA)

Key Features

• Tenure Options: Short-term (up to 12 months) to long-term (25 years)
• Flexibility: PPA not mandatory under Window II
• Implementation: Coal India Ltd & Singareni Collieries to act as nodal agencies

Benefits

• Reduces dependency on imported coal
• Encourages competitive electricity generation
• Allows surplus coal power to be sold via market-based mechanisms
• Helps India meet growing energy demands (302 GW target by 2031)