Coal India permits market sale of surplus power from linkage coal plants

Coal India Limited (CIL) has permitted the sale of unrequisitioned surplus (URS) electricity generated by thermal power plants using its linkage coal under long and medium-term fuel supply agreements (FSAs) in power exchanges and markets.

Under earlier rules, such surplus generation could only be supplied under power purchase agreements (PPAs) and could not be sold in the market. The restriction has now been removed through a revision to the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI) policy. The change applies to all current and future long and medium-term FSAs and covers central and state generating companies as well as independent power producers.

“With the surplus power availability in the exchanges, ideally, the spot prices will be in check, leading to affordable power to all,” CIL stated. The company expects the move to facilitate smoother supply and help stabilise spot prices, particularly during periods of high demand.

In August 2024, CIL removed the 120% ceiling on coal supply beyond the Annual Contracted Quantity (ACQ) under FSAs, allowing producers to procure additional volumes when required. For FY26, the company has around 650 million tonnes of coal committed under FSAs for the power sector.