In a significant policy shift, Coal India Limited (CIL) has announced that thermal power plants (TPPs) using its linkage coal under long- and medium-term fuel supply agreements (FSAs) can now sell surplus power in the open market and power exchanges, effective August 1, 2025.
Until now, power generated through linkage coal supplied under FSAs was restricted for use strictly under existing power purchase agreements (PPAs). The earlier provisions prevented power generators from selling un-requisitioned surplus (URS) electricity in the open market.
This restriction has now been lifted by CIL in line with the revised SHAKTI policy, enabling greater flexibility for all power generators — including central and state gencos as well as independent power producers (IPPs) — to sell excess power through exchanges. The revised policy applies uniformly to both existing and future long- and medium-term FSAs.
A senior CIL official stated, “We have been cementing our relations with consumers consistently, and the policy facilitates the power sector to meet consistent demand of affordable power.”
Market experts believe that the release of surplus power into exchanges will help stabilize spot prices and improve power affordability across the country.
This follows CIL’s earlier reform in August 2024, when it removed the cap on coal supplies up to 120% of the Annual Contracted Quantity (ACQ), allowing deliveries beyond the previous threshold.
For FY26, CIL has signed FSAs covering nearly 650 million tonnes of coal supply to the power sector, highlighting its key role in powering India’s growing energy demands.
