coal allocation Reimagined: Exploring the Revised SHAKTI Policy
In a world where energy security is becoming a top priority, the coalition has met on May 7th, 2025, to discuss the Revised SHAKTI Policy for Coal Allocation to the Power Sector. This policy aims to transform how coal is distributed within the power sector, aiming to improve efficiency, reduce reliance on global markets, and promote energy independence. The meeting was chaired by Prime Minister Shri Narendra Modi, signaling a significant step forward in addressing the growing need for sustainable and efficient power generation.
Introduction
The coalition’s meeting introduced a groundbreaking initiative: the Revised SHAKTI Policy. Under this policy, coal linkages are being allocated to Thermal Power Plants (Central Sector/State Sector/Independent Power Producers) through two distinct windows of time. These windows represent a paradigm shift from the previous nomination-based system, where coal allocation was often subject to significant delays or even non-availability.
The Revised SHAKTI Policy seeks to streamline coal distribution, ensuring higher efficiency and better integration with global utilities. By reducing reliance on imported coal, the policy aims to foster energy independence and support initiatives like the Atmanirbhar Bharat Initiative (ABII), which promotes economic activities and local development.
The History of SHAKTI Policy: Before its current form, the SHAKTI Policy was designed to address inefficiencies in coal allocation. By creating a more transparent system, it aimed to reduce reliance on global markets while enhancing the utility of domestic coal. The policy introduced two windows for coal allocation: one at a notified price and another at a premium. This distinction was meant to encourage competition and ensure fair distribution.
The Revised Policy: Efficiency in Coal Utilization: With the Revised SHAKTI Policy, coal linkages are now allocated through two distinct windows of time:
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Window-I (Coal at Notified Price): Domestic power producers have the opportunity to secure coal on a period-to-period basis, up to 12 months or for over 12 years. For those requiring energy beyond this timeframe, premium prices could be offered.
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Window-II (Premium Over Notified Price): This window provides an additional layer of efficiency by offering premium rates, ensuring higher profitability and better utility integration with global markets.
By implementing these two windows, the policy aims to maximize coal utilization, reduce reliance on imported resources, and reinforce energy independence.
The Role of Pit Head Thermal Capacity Addition: A significant component of the Revised SHAKTI Policy is its emphasis on pit head thermal capacity addition. This initiative allows power plants to generate electricity directly from unused coal reserves, reducing their dependence on external sources like imports. This not only enhances coal availability but also supports the revival of infrastructure that has been affected by disruptions.
The Impact on Coal-Based Power Plants: The Revised SHAKTI Policy aims to reduce reliance on imported coal while still allowing power plants to generate electricity from un-seared coal reserves. This balance is crucial for maintaining efficiency and reducing carbon emissions, even as coal becomes more abundant.
Conclusion
The Revised SHAKTI Policy represents a significant step forward in addressing the challenges of coal allocation in the power sector. By introducing transparency through two windows of time and emphasizing efficient use of thermal capacity addition, the policy aims to achieve greater coal independence while enhancing efficiency and reducing reliance on global markets.
As the coalition continues its efforts, it will explore further opportunities for coal utilization and consider additional reforms to support the broader goals of energy security for all. The Revised SHAKTI Policy serves as a powerful reminder of the transformative potential of innovation in addressing the complexities of modern energy systems.