Revamped SHAKTI Policy Fuels India's Power Sector

The Cabinet Committee on Economic Affairs approved a revised SHAKTI policy to streamline coal allocation for India's power sector. The policy introduces flexible coal linkage options for thermal power plants, facilitating future expansion. It promotes transparency and flexibility in coal sourcing, reducing dependency on imported coal.

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has greenlit a revised SHAKTI policy, aimed at overhauling coal allocation for India's power sector. This strategic move is expected to meet both long-term and short-term coal requirements efficiently.

The revamped policy offers two distinct pathways for coal linkage: central and state power producers will have access to coal at notified prices, while all generators can opt for coal at a premium over the notified price through an auction-based system. This ensures a streamlined and transparent coal sourcing mechanism.

By encouraging flexible linkage terms, ranging from 12 months to 25 years, the policy aims to spur thermal capacity expansions. Furthermore, the decrease in dependency on imported coal is a significant step forward, with benefits passed to consumers, ensuring economical electricity supply.

(With inputs from agencies.)