Corporate Development     

Published: September 15, 2025
Updated: September 15, 2025

Coal India Gets Nod to Sell Surplus Power

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

Earlier, TPPs with power purchase agreements (PPAs) using CIL’s linkage coal could sell the electricity generated only within the confines of the PPAs as the provisions disallowed the sale of power generated from long- and mediumterm FSAs in the power market and exchanges.

NO MORE CURBS

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. This applies evenly to all existing as well as future long- and medium-term power FSAs, and extends to all power generators -- Central and state gencos, and independent power plants.

With the surplus power availability in the exchanges, ideally the spot prices will be in check, leading to affordable power to all. A year ago, CIL paved the way by allowing supplies beyond the annual contracted quantity (ACQ) to TPPs of the country, including IPPS, doing away with a provision which allowed coal supplies up to a maximum of 120% of ACQ. This policy change is designed to increase revenue by optimizing coal usage, leading to higher sales and revenue for CIL by ensuring better utilisation of its coal linkages, which is around 650 million tonnes of FSAs for the current fiscal year placed for the power sector.

MARKET FRIENDLY

By enabling power plants to sell excess power, the policy promotes market liquidity and helps in reducing power-generating cost to some extent through higher operational efficiency. Besides, market flexibility would provide remunerative prices and encourage power producers.

Major thermal power companies with coal linkages with Coal India include its largest customer, the state-owned NTPC. The other significant companies are Adani Power, Tata Power, Jindal Steel & Power, Reliance Power, and NLC India through its joint ventures, all of which rely on CIL for their fuel supply.