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Revised SHAKTI Policy: Two-Window Coal Linkage for Power Plants

8 May 20251 min read
GOVERNMENT SCHEMESRevised SHAKTIPolicy: Two-WindowCoal Linkage forPower Plants8 May 2025safalsetu.com

Why in the news

The CCEA cleared a revised coal allocation policy that gives power producers more routes to secure fuel.

Key facts

  • SHAKTI: Scheme for Harnessing and Allocating Koyala Transparently in India.
  • Gives fresh linkages to Central, State and IPP thermal plants with simpler allocation.
  • Window-I coal for State Gencos can also go to IPPs via TBCB or to new expansion units with PPAs.
  • Benefits: employment, flexibility for FSA holders, optimal plant use.
FeatureWindow-IWindow-II
PriceNotifiedPremium
EligibleCentral Sector projects, State-linked IPPsDomestic and imported coal-based producers
Tenure / PPAExisting mechanisms continue12 months-25 years; no PPA

Background

  • SHAKTI replaced the LoA-FSA regime on 22 May 2017 (Ministry of Coal) for transparent domestic coal allocation.
  • Transition: about 68,000 MW kept supply at 75% of ACQ; about 19,000 MW delayed capacity eligible if commissioned by 31.03.2022.
  • Clauses B(i) to B(vii) cover notified-price linkage for Gencos, auctions for IPPs with or without PPAs, pooled State demand, UMPP SPVs and imported-coal IPPs.

Exam angle

  • Nodal ministry: Coal; approving body: CCEA.

Test yourself

1. Under the Revised SHAKTI Policy, which window supplies coal at a premium price?

Window-II is coal at premium price, up to 25 years, no PPA.

2. The SHAKTI policy replaced which earlier coal regime?

SHAKTI replaced the Letter of Assurance-Fuel Supply Agreement regime.

3. Which body approved the Revised SHAKTI Policy?

The Cabinet Committee on Economic Affairs approved it.