India’s power sector continues to walk a tightrope between energy transition and energy security. While renewable capacity is expanding rapidly, coal remains the backbone of electricity generation, supplying more than half of the country’s power. In this context, the Shakti Bill assumes significance not merely as a coal allocation mechanism, but as a policy instrument aimed at stabilising fuel supply for thermal power plants in a changing energy landscape.
At its core, the Shakti framework was designed to address one of the most persistent challenges faced by power producers: uncertainty in coal supply. Historically, coal linkages were often fragmented, delayed or misaligned with actual plant requirements, leading to underutilisation of assets and stress across the sector. The Shakti policy sought to bring transparency and predictability by linking coal allocation directly to power purchase agreements, thereby aligning fuel supply with contracted demand.
The proposed legislative backing through the Shakti Bill marks an attempt to institutionalise this approach. By providing a clearer statutory framework, the Bill aims to reduce discretion in coal allocation, introduce competitive elements through auctions where appropriate, and ensure that coal is directed toward plants that are operationally and financially viable. This matters at a time when stranded capacity and stressed assets continue to weigh on the sector.
One of the key strengths of the Shakti approach is its emphasis on efficiency. By prioritising coal supply to plants with confirmed offtake, the policy discourages speculative capacity and rewards generators that are integrated into the formal power market. This reduces the risk of coal being locked into idle assets while active plants struggle to secure fuel. In theory, it also supports lower tariffs by reducing dependence on spot coal purchases or costly imports.
However, the Shakti Bill also raises important questions about the future role of coal in India’s power mix. As renewable energy becomes cheaper and storage technologies mature, thermal power plants are increasingly being asked to operate flexibly rather than continuously. Coal supply frameworks built around baseload assumptions may need to evolve to reflect this operational reality. The Bill will need to remain adaptable to avoid locking the sector into rigid fuel commitments that do not match future grid requirements.
Another consideration is federal balance. Coal allocation and power generation often involve coordination between central agencies, state utilities and private producers. Any statutory framework must ensure transparency while respecting the operational needs of states, particularly those with legacy thermal capacity or regional fuel constraints. If implemented without sufficient consultation, the Shakti Bill could face resistance from stakeholders who fear loss of autonomy or uneven treatment.
From a broader policy perspective, the Bill underscores a critical truth: energy transition does not eliminate the need for fuel security overnight. Until renewables and storage can fully meet peak and seasonal demand, coal will continue to play a stabilising role. Ensuring that this role is performed efficiently, predictably and at the lowest possible cost is essential for both consumers and the economy.
The Shakti Bill, therefore, should not be seen as a rollback of India’s clean energy ambitions, but as a bridge policy. Its success will depend on how well it balances certainty with flexibility, competition with coordination, and short-term security with long-term transition goals. In an era of rapid change, stability in fuel policy can provide the sector with the confidence it needs to evolve responsibly.
