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SHAKTI coal linkage auctions for power plants
What it is
Scheme for Harnessing and Allocating Koyala Transparently in India - the framework under which Coal India allocates long-term coal supply to power plants through auctions and tariff-based bidding rather than administrative allotment
The policy was revised to widen eligibility and allow linkage auctions for plants without long-term PPAs
Impact on industries
- Transparent allocation replaced a discretionary regime, and assured linkage is what makes a thermal project financeable
- Revised terms let merchant and PPA-less plants secure coal, improving utilisation of stranded capacity
- Linkage secures quantity, not delivery - rake availability and logistics remain the binding constraint, with coal stocks running around 19 days at 85% PLF
- Auction premiums raise fuel cost for plants that must then compete on tariff, compressing the spread
- Coal cost is a pass-through in regulated PPAs but not in merchant sales, so linkage economics differ entirely by contracting model