Lok Sabha Question No. 3597 (UNSTARRED), answered on 2019-01-02
Subject: Shakti Scheme
Ministry: COAL
Asked by: KIRIT PREMJIBHAI SOLANKI

## GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA

## UNSTARRED QUESTION NO.3597 TO BE ANSWERED ON 02.01.2019

## Shakti Scheme

## 3597. DR. KIRIT P. SOLANKI:

## Will the Minister of COAL be pleased to state:

- (a) the salient features of  the  Shakti  scheme  and  the  status  of  its implementation;
- (b)  the  details  of  long  term  contracts  to  power  companies  through  Shakti scheme and the Power Purchase Agreements till date;
- (c) the details of coal procurement made under the scheme; and
- (d) the total allocation of coal linkage to Gujarat under Shakti scheme?

## ANSWER MINISTER OF RAILWAYS AND COAL (SHRI PIYUSH GOYAL)

- (a)  &  (b)  The  Government approved  fading  away  of  the  existing Letter  of Assurance  (LoA)-Fuel  Supply  Agreement  (FSA)  regime  and  introduced Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI), 2017, which was issued by Ministry of Coal on 22.05.2017. A few salient features under various paras of the SHAKTI policy are:
- A. It has allowed continuation of the existing coal supply to the capacities of about 68,000 MW at the rate of 75% of Annual Contracted Quantity (ACQ). The  coal supply may  further be increased in future based  on  coal availability. Also, the policy has enabled about 19,000 MW capacities out of the  68,000  MW  which  have  delayed  in  commissioning  for  signing  of FSA   provided  these  plants  are  commissioned  within  31.03.2022.  The medium term PPAs to be concluded in near future against bids invited by Discoms have also been made eligible for linkage coal supply. With these, the old regime of LoA-FSA came to finality and fade away.
- B (i). Coal India Limited (CIL)/ Singareni Collieries Company Limited (SCCL) may grant coal linkages to State/Central Gencos/Joint Ventures at notified price on recommendations of Ministry of Power.
- B  (ii).  Linkages  to  Independent  Power  Producers  (IPPs)  having  Long  Term Power Purchase Agreement (PPA) based on domestic coal but no linkage are provided  where  IPPs  participating  in  auction  will  bid  for  discount  on  the tariff (in paise/unit).
- B (iii). Linkages to IPPs/ Power Producers without PPAs shall be on auction basis  where  methodology  would  be  similar  to  that  followed  under  linkage auction to non-regulated sector.
- B (iv). Coal linkages may also be earmarked for fresh PPAs, by pre-declaring the  availability  of  coal  linkage  with  description,  to  the  States.  States  may indicate these linkages to Discoms/SDAs.
- B  (v).  Power  requirement  of  group  of  States  can  also  be  aggregated  and procurement  of such aggregated power can be made  by  an  agency designated by Ministry of Power or authorized by such States on the basis of tariff based bidding.
- B  (vi).  Linkages  shall  be  granted  for  full  normative  quantity  to  Special Purpose Vehicle (SPV) incorporated by nominated agency for setting up Ultra Mega Power Projects  (UMPP)  under  Central  Government  initiative  through tariff  based competitive under the guidelines for determination of tariff, on the recommendation of Ministry of Power.
- B (vii). Ministry of Coal in consultation with Ministry of Power may formulate a detailed methodology of a transparent bidding process for allocating coal linkages to IPPs, having PPAs based on imported coal, with full pass through of cost saving to consumers.

As  of  now,  coal  linkages  to  following  capacities  have  been  granted  under Para A (i), B (i) & B (ii) of the policy.

-  Para  A(i):  Clearance  has  been  given  for  signing  of  FSA  for  6  power plants with a total capacity of 4,730 MW.
-  Para  B(i): 18  TPPs  have  been  granted  linkage  for  a  total  capacity  of 21,880 MW,
-  Para  B(ii):  Linkage  auction  under  para  B(ii)  of  SHAKTI  policy  was conducted  in  Sep'17  whereby  27.18  MT  of  annual  coal  linkage  was booked by ten provisional successful bidders for 9,045 MW capacity.

Central  Electricity  Authority  (CEA)  has  informed  that  no  long  term  power purchase agreement has been made under SHAKTI Policy.

- (c). In  2018-19  (up  to  26.12.2018),  total  coal  supplied  to  the  Power producers under SHAKTI scheme [Para A(i), B(i) & B(ii)] is given in the table below (the figures are in Million Tonnes):
- (d). No  coal  linkage  has  been  granted/allotted  to  Gujarat  State  till  date under SHAKTI policy.

| Para of SHAKTI   |   Coal Supply |
|------------------|---------------|
| A(i)             |         2.131 |
| B(i)             |         2.33  |
| B(ii)            |        11.085 |

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