GS Paper - 3 (Energy)

In order to make more coal available to power plants that do not have any power purchase agreement (PPA), the union power ministry agreed to changes in the guidelines for SHAKTI scheme. SHAKTI, or Scheme for Harnessing and Allocating Koyala Transparently in India, was launched in 2018 to provide coal to stressed power units which lack coal supply.

What

  1. The power ministry in a meeting with Association of Power Producers (APP), the representative body for private gencos, agreed to three separate windows for auction--3 months, 6 months and one year.
  2. In order to make coal available for a longer period, MoP will examine whether the duration of auction can be extended for more than one year.
  3. Issue of Bank Guarantee is also to be examined if duration has to be extended beyond one year, said a statement by the ministry.
  4. In the earlier two rounds held over the last two years, around 9,389 megawatt (MW) of power capacity bid for the coal under the SHAKTI scheme.
  5. During the last round in February, private power players had alleged that Coal India was offering less than the required amount of coal.
  6. APP also asked the ministry for amendments in the 'Mega Power Policy' which the MoP said is being taken up through inter-Ministerial consultation.

Flashback

  1. 'Mega power policy' is for projects over 1,000 Mw and was to expire on 31 March 2017, but the CCEA extended it by five years, thereby doubling the period to 10 years for projects to receive the 'mega power' certificate.
  2. The incentives provided in the scheme are lower customs duty and excise duty exemption for equipment.