The Cabinet Committee on Economic Affairs (CCEA) has approved a revised ‘SHAKTI’ policy to streamline coal allocation and boost flexibility for the power sector. The updated policy introduces two mechanisms—Window-I and Window-II—reducing the previous eight categories to make coal distribution easier. Window-I continues to provide coal linkages at notified prices for government-owned thermal power projects, while Window-II allows thermal power producers, including imported coal plants, to acquire coal through auctions at a premium, with linkages valid for 12 to 25 years and greater market flexibility, including the option to sell power without a PPA.
The revised policy aims to promote new capacity additions, especially near coal pitheads, improve long-term procurement planning, and reduce dependence on imported coal. It also seeks to lower the overall cost of coal at power plants, potentially reducing electricity tariffs for consumers, and encourages private investment in the thermal power sector. Implementation will be overseen by Coal India Limited and Singareni Collieries Company Limited, with operational issues managed by an Empowered Committee, as part of the government’s broader efforts to enhance energy security and affordability.
