In a significant move to bolster energy security, the Ministry of Coal announced the removal of restrictions on coal purchases for thermal power plants, ensuring uninterrupted supply to meet the nation’s growing electricity demands.
The decision, rooted in the Shakti Policy (2017), replaces the earlier New Coal Distribution Policy (2007) and allows coal companies to supply fuel as per the full Power Purchase Agreement (PPA) requirements, irrespective of Annual Contracted Quantity (ACQ) levels.
Key Policy Changes
Under the revised framework, coal supply to power plants will be governed by Fuel Supply Agreements (FSAs), with pricing determined by commercial terms and notifications from Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL). Additionally, coal is being made available through Single Window e-auctions, catering to all sectors, including power.
Record Coal Production
The government emphasized its focus on ramping up domestic coal production, citing record output of 997.83 Million Tonnes (MT) in 2023-24. Provisional data for 2024-25 (up to February) shows a 5.45% growth, with production reaching 929.15 MT compared to 881.16 MT in the same period last year.
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