A new coal linkage policy to ensure an adequate supply of the fuel to power plants through reverse auction received approval of the Cabinet Committee on Economic Affairs (CCEA) in New Delhi. According to the Union cabinet, Shakti -- Scheme for Harnessing and Allocating of Koyala (coal) Transparently in India -- has been envisaged to make optimal allocation of the natural resource across power units. The new coal linkage policy for power plants will help producers ensure fuel supplies in an organised manner. The government's initiatives as well as international market conditions have helped bring down price of the dry fuel and boosted domestic production.
But a mechanism is required for providing coal linkages to power plants at competitive rates. According to sources, the new policy will address this concern and put in place a proper mechanism for sourcing of the dry fuel by the power plants as per their schedules.