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Coal India Lifts Restrictions on Surplus Power Sales in Open Market

Starting August 1, 2025, Coal India Limited (CIL) has allowed thermal power plants using its linkage coal under long and medium-term Fuel Supply Agreements (FSAs) to sell surplus electricity in the open market, including power exchanges. This marks a major change from previous rules, where power generated using CIL coal was restricted for use only under specific Power Purchase Agreements (PPAs).

This move is in line with the revised SHAKTI policy, and removes earlier barriers that limited the sale of power outside of signed contracts. Now, all power producers using CIL coal—whether they are central government units, state utilities, or independent power producers (IPPs)—can sell un-requisitioned surplus (URS) power freely in the market.

The policy change applies to both existing and new FSAs, creating a level playing field and promoting flexibility in power trading. This is expected to increase power availability in the spot market, helping to stabilize electricity prices and make power more affordable for consumers.

Overall, this policy shift is aimed at improving efficiency in coal-based power generation, reducing idle capacity, and making better use of available coal resources in India’s power sector.