Govt allows GENCOs seeking coal linkage without PPA to sell power on exchange

New Delhi: Through a small amendment in the SHAKTI policy, the Ministry of Coal has now allowed power generating companies (GENCOs), including private ones, to sell power on any segment of the power exchanges. Under Para B (viii) (a) of SHAKTI policy, power plants, including private GENCOs, without a Power Purchase Agreement (PPA) could seek coal linkages for a minimum of 3 months and up to a year. However, the wording of the policy restricted them to selling power only on the Day-Ahead segment of the exchange. Therefore, through an amendment, the Ministry of Coal allowed such GENCOs to sell power on the exchange or through DEEP portal.

GENCOs sans PPA can get coal linkage if they sell power on exchange

The order issued by the ministry dated November 8 said, “All such power plants including private generators which do not have PPAs, shall be allowed coal linkage under SHAKTI Policy for a period of minimum 3 months and upto a maximum of 1 year, provided further that the power generated through that linkage is sold through any product in power exchanges or in short term through a transparent bidding process through Discovery of Efficient Energy Price (DEEP) portal. A methodology in this regard shall be formulated by the Ministry of Power, in consultation with the Ministry of Coal.”

“The above amendment in SHAKTI Policy is circulated to all concerned for further action. Coal India Limited and its subsidiaries and SCCL are advised to take further action accordingly,” the ministry added.

Power demand

Energy Watch reported earlier this week that the government is following a four-pronged strategy for meeting a consistent surge in power demand. One of the ways that the government is seeking to meet the demand is by instructing power plants, both domestic coal-based and imported coal-based, to run on full capacity and be available for scheduling, either through PPA or on the exchange. Official projections show that India is expected to see a peak power demand of 250 GW or higher next year.