Coal India Allows Thermal Power Plants to Sell Surplus Power in Power Market and Exchanges

Coal India Limited (CIL) announced on August 7, 2025, a major policy shift allowing un-requisitioned surplus power generated by thermal power plants using CIL's linkage coal under long and medium-term fuel supply agreements to be sold in power markets and exchanges. This significant change took effect from August 1, 2025, marking a departure from previous restrictive provisions.

Policy Shift Enables URS Power Sale in Open Markets

Previously, TPPs serving power purchase agreements using CIL's linkage coal could sell electricity only within PPA confines, as provisions disallowed power sales from long and medium-term FSAs in exchanges. The revised policy, aligned with the SHAKTI policy spirit, removes restrictions on open market power sales, applying to all existing and future FSAs.

All Power Generators Benefit from New Framework

The policy extends to all power generators, including Central and State Gencos and independent power plants. A CIL senior official emphasised the company's consistent efforts in cementing consumer relations, stating the policy facilitates the power sector to meet consistent demand for affordable power through enhanced market access.

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Expected Impact on Power Pricing and Availability

With surplus power availability in exchanges, spot prices are expected to remain in check, leading to affordable power for all consumers. This policy change builds on CIL's previous reform, allowing supplies beyond Annual Contracted Quantity to TPPs, removing the 120% ACQ maximum limitation implemented a year ago in August.

65 Crore Tonnes FSA Capacity for Current Fiscal

For the current fiscal year, CIL has approximately 65,00,00,000 tonnes of FSAs in place for the power sector. This substantial capacity provides significant potential for surplus power generation that can now be sold in competitive markets, enhancing overall power sector efficiency and affordability.

Coal India Share Price Performance

On August 7, 2025, Coal India share price opened at ₹375.00 on NSE, below the previous close of ₹376.85. During the day, it surged to ₹380.25 and dipped to ₹373.60. The stock is trading at ₹379.65 as of 3:13 PM. The stock registered a moderate gain of 0.74%.

Over the past week, it has moved up by 3.42%, over the past month, it has moved up by 0.31%, and over the past 3 months, it has moved up by 0.50%.

Conclusion

Coal India's policy shift, enabling URS power sales in exchanges from August 1, 2025, represents a significant liberalisation of India's power sector. By removing restrictions on open market sales for TPPs using CIL's linkage coal, the policy enhances market flexibility whilst supporting affordable power availability through competitive pricing mechanisms across all generator categories.

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