The Indian government has revised its SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) policy for coal allocation to the power sector, to allow independent power producers (IPPs) to sign long-term coal supply contracts, in order to increase coal-fired power plant capacities. Coal allocation to the power sector will be eased under two windows: linkage to central power generation companies or States at a notified price (Window I) and to all power generation companies at a premium above notified price (Window II).
The revised rules also remove the requirement to have power purchase agreements (PPAs) to sell electricity. IPPs with or without PPAs will be able to get coal on an auction basis for a period of up to 12 months of for 1 to 25 years, by paying premium above the notified price and providing the power plants the flexibility to sell the electricity as per their choice.
India aims to increase its coal-fired power capacity by 80 GW by 2031-2032 to meet the growing demand for electricity.