In a major policy shift state-run Coal India Limited (CIL) has cleared the decks for un-requisitioned surplus (URS) power generated by the thermal power plants that use CIL’s linkage coal under long and medium term fuel supply agreements (FSAs), to be sold in power market and exchanges with effect from August 1, 2025. 

Earlier, thermal power plants serving power purchase agreements (PPAs) using CIL’s linkage coal could sell the electricity generated only within the confines of the PPAs. The earlier provisions disallowed the sale of power generated from long and medium term FSAs in the power market and exchanges. 

“In the spirit of the revised SHAKTI policy, CIL has done away with the earlier provision of restricting the sale of power in the open market,” the company said. 

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All about CIL’s new policy

The new provision applies evenly to all existing as well as future long, and medium term power fuel supply agreements (FSAs) and extends to all the power generators – Central and State Gencos, and independent power plants. 

“We have been cementing our relations with consumers consistently and the policy facilitates the power sector to meet consistent demand for affordable power,” said a senior official of the company.

With the surplus power availability in the exchanges, ideally, the spot prices will be in check, leading to affordable power to all, Coal India highlighted. 

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CIL capex plan for fiscal 2025-26

A year ago, in August CIL paved the way allowing supplies beyond Annual Contracted Quantity (ACQ) to thermal power plants of the country including  independent power plants, doing away with a provision which allowed coal supplies up to a maximum of 120% of ACQ. 

For the current fiscal year CIL has around 650 million tonnes of FSAs in place for the power sector. 

The state-run coal miner has charted out a Rs 16,000 crore capex plan for the fiscal 2025-26 spread across coal production, renewable energy (RE), and thermal power projects, the company has earlier told FE. It has also set a coal production target of 875 million tonnes in FY26.