CCEA approves new coal linkage policy SHAKTI

The Cabinet Commitee on Economic Affairs (CCEA) has approved the new coal linkage policy – SHAKTI or the Scheme to Harness and Allocate Koyla Transparently in India. As per the new policy, coal linkages will be awarded to designated state-owned power distribution companies. These, in turn, will assign linkages to state and central power generation companies via allocations and to private players through auctions. Under the auctions, firms with power purchase agreements (PPAs) based on domestic coal will offer a discount on the existing tariff, which will be adjusted in the gross coal bill. Meanwhile, those without PPAs will bid for fuel linkages with Coal India Limited‘s notified price serving as the reserve price.The policy is expected to benefit 30,000 MW of power plants in the country, which are stranded due to lack of fuel.