Power Ministry finalizes dual-window coal allocation rules under Revised SHAKTI Policy 2025

The Ministry of Power has released detailed procedures for allocating coal linkages to power generators under the Revised SHAKTI Policy 2025. The guidelines cover both notified price and auction-based allocations, applying to Central and State GENCOs as well as private players. 

The Revised SHAKTI Policy was cleared by the Cabinet Committee on Economic Affairs (CCEA) in May 2025. It lays out two key windows for coal linkage.

Approved by the Cabinet Committee on Economic Affairs in May 2025, the policy defines two windows.

Window I offers coal at notified prices to Central and State Government power producers. States can allocate this coal to their GENCOs, IPPs with Section 62 PPAs, or new plants selected via tariff-based competitive bidding (TBCB). Greenfield plants must be near coal mines, ideally within 300 kilometres. Exceptions require approval.

Strict timelines apply. Developers must submit commitment guarantees within 2 months, receive letters of assurance within 2 more months, place BTG orders within 2 years, sign fuel supply agreements (FSAs) within 2 years of the LoA, and begin coal drawl within 5 years of the FSA.

Window II allows auction-based linkages at a premium over notified prices. All generators can participate. Two auction types are planned:

• Short-term: Held twice a year, supplying coal for up to 12 months
  
  
• Medium/long-term: Held annually, with supply periods from 7 to 25 years

Eligibility varies. Commissioned plants can bid, excluding those already allotted coal under TBCB. Imported coal plants with PPAs are allowed if savings are passed through. Existing FSA holders must have fully drawn their contracted coal.

The same pithead rule applies to greenfield plants. Coal India Ltd (CIL) and Singareni Collieries Company Ltd (SCCL) will identify sources. Quantities are based on 100 per cent PLF minus existing linkages or captive coal. Coal must be used for PPAs or market sales, not captive use.

Coal companies will now set up auction portals and finalise FSAs based on these rules. The policy aims to ensure fuel availability, timely project development, and market-based pricing.