Why in the News?
The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal under the Revised SHAKTI (Scheme to Harness and Allocate Koyla Transparently in India) Policy to enhance coal availability for Central/State Sector Thermal Power Plants and Independent Power Producers (IPPs).
About the SHAKTI Policy:
- The SHAKTI Policy, launched in 2017 by the Ministry of Power, created a transparent mechanism to allocate coal linkages to thermal power plants lacking Fuel Supply Agreements (FSAs).
- It replaced the earlier nomination-based system with auction-based and tariff-based bidding, enhancing fairness and transparency.
- While government-owned plants continue receiving coal through nominations, private power producers must obtain coal via competitive bidding.
- The policy aimed to reduce coal imports, promote the domestic coal industry, and improve energy self-sufficiency.
- It also intended to revive stressed assets in the power sector, indirectly supporting public sector banks and infrastructure growth.
Key Features of the Revised SHAKTI Policy (2024):
- The revised 2024 policy simplifies the system by merging eight criteria into just two windows, enhancing the ease of doing business.
- Window-I allocates coal at notified prices to central and state government utilities, their joint ventures, and subsidiaries, including those with PPAs under Section 62 of the Electricity Act.
- Window-II permits coal and imported coal-based producers to acquire coal through premium-based auctions for 12 to 25 years, without requiring a PPA.
- The policy encourages pithead plants, supports new capacity planning, and allows Imported Coal-Based (ICB) plants to transition to domestic coal, reducing import reliance.
- Existing FSA holders can now purchase coal beyond 100% of their Annual Contracted Quantity (ACQ) during periods of peak demand.
- Unrequisitioned surplus electricity can be sold on power exchanges, boosting plant utilization.
- The policy imposes no additional financial burden on coal companies.
- Beneficiaries include thermal power plants, Coal India, SCCL, railways, state governments, and end consumers.
| [UPSC 2023] With reference to coal-based thermal power plants in India, consider the following statements:
1. None of them uses seawater. 2. None of them is set up in water-stressed district. 3. None of them is privately owned. How many of the above statements are correct? Options: (a) Only one (b) Only two (c) All three (d) None* |
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