Revised SHAKTI Policy for Coal Linkages

On 6th May 2025, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved fresh coal linkages under the revamped SHAKTI policy to boost coal availability and flexibility for thermal power generation.

Key Points

Two New Allocation Windows:
- Window-I: Coal at notified prices for central/state-owned power plants and IPPs with PPAs or selected via Tariff-Based Competitive Bidding.
- Window-II: Auction-based coal access for all thermal producers—including imported coal-based plants—without a mandatory PPA.
Greater Flexibility: Coal linkages under Window-II will range from 12 months to 25 years, allowing open market power sales without PPA obligations.
Private Investment Push: Removing the PPA requirement aims to encourage private investment in thermal power and support energy security goals.
Rationalised Categories: The policy streamlines 8 earlier allocation categories into 2 mechanisms to promote ease of doing business.
Coal Source Optimisation: Source rationalisation to reduce coal’s landed cost, decongest railways, and lower electricity tariffs.
Inclusion of Imported Coal-Based Plants: ICB plants can now access domestic coal under Window-II, subject to feasibility and regulatory approval.