Source: The post is based on the article “Ministry of Power launches scheme for Procurement of Aggregate Power of 4500 MW for five years under of SHAKTI Policy” published in PIB on 1st December 2022
What is the News?
The Ministry of Power has announced a Scheme for Procurement of Aggregate Power of 4500 MW on a competitive basis for five years on Finance, Own and Operate(FOO) basis under SHAKTI Policy.
This scheme is expected to help the states that are facing power shortage and also help generation plants to increase their capacities.
What is SHAKTI Policy?
SHAKTI or Scheme for Harnessing and Allocating Koyala Transparently in India was launched by the Ministry of Power in 2018.
The main objectives of this policy are to 1) Make coal available to all the Thermal Power Plants of the country in a transparent and objective manner and 2) At the same time ensure that the benefits of linkage coal are transferred to the end consumers.
Significance: The policy is supposed to be beneficial not just for the infrastructure sector, but also for the public sector banks which have huge loans unpaid at the end of the power companies.
It also aims to reduce the dependence on imported coal and promote domestic industries.