MP Adopts Greenshoe Option for Coal Power Flexibility
POWER & RENEWABLE ENERGY

MP Adopts Greenshoe Option for Coal Power Flexibility

In a strategic move to enhance power capacity and long-term energy security, the Madhya Pradesh government has approved the adoption of the “greenshoe option” for its coal-based thermal power projects. The state cabinet ratified the decision on Tuesday, marking a policy shift in managing future capacity additions across government and private sector plants.
Traditionally used in financial markets to permit overallotment of shares, the greenshoe option has here been repurposed to allow the state to procure additional electricity beyond the original sanctioned capacity without launching a new tender process. Urban Development Minister Kailash Vijayvargiya explained that this mechanism will provide the state flexibility to adjust procurement based on demand and prevailing tariffs, ensuring quicker execution and cost optimisation.
The Madhya Pradesh Power Management Company Limited (MPPMCL) has already applied similar procurement flexibility for renewable sources such as solar and wind. Extending this model to coal-fired generation marks a significant evolution in the state’s energy policy, particularly as it seeks to balance expanding power demand with cost-efficiency and reliability.
This policy change follows the Union government’s recent approval to allocate coal for upcoming thermal projects with a total installed capacity of 4,100 MW in Madhya Pradesh. These new plants are expected to draw investments exceeding Rs 250 billion and substantially upgrade the state's energy infrastructure.
Officials noted that the greenshoe approach will enhance the state's ability to manage peak load periods, seasonal demand variations, and industrial power requirements while upholding fiscal discipline. It also complements Madhya Pradesh’s integrated energy strategy that combines thermal, hydro, and renewable sources to maintain grid stability and economic resilience.
Despite ongoing concerns regarding the environmental impact of coal, the government emphasised that the upcoming plants will incorporate cleaner technologies and comply with revised emission norms. In this context, the greenshoe mechanism is positioned as a tool for disciplined, demand-driven capacity expansion rather than unrestricted coal reliance.
As Madhya Pradesh aims to establish itself as a power-surplus state, the cabinet’s decision reflects a pragmatic blend of infrastructure planning and procurement innovation to support sustainable development. 

In a strategic move to enhance power capacity and long-term energy security, the Madhya Pradesh government has approved the adoption of the “greenshoe option” for its coal-based thermal power projects. The state cabinet ratified the decision on Tuesday, marking a policy shift in managing future capacity additions across government and private sector plants.Traditionally used in financial markets to permit overallotment of shares, the greenshoe option has here been repurposed to allow the state to procure additional electricity beyond the original sanctioned capacity without launching a new tender process. Urban Development Minister Kailash Vijayvargiya explained that this mechanism will provide the state flexibility to adjust procurement based on demand and prevailing tariffs, ensuring quicker execution and cost optimisation.The Madhya Pradesh Power Management Company Limited (MPPMCL) has already applied similar procurement flexibility for renewable sources such as solar and wind. Extending this model to coal-fired generation marks a significant evolution in the state’s energy policy, particularly as it seeks to balance expanding power demand with cost-efficiency and reliability.This policy change follows the Union government’s recent approval to allocate coal for upcoming thermal projects with a total installed capacity of 4,100 MW in Madhya Pradesh. These new plants are expected to draw investments exceeding Rs 250 billion and substantially upgrade the state's energy infrastructure.Officials noted that the greenshoe approach will enhance the state's ability to manage peak load periods, seasonal demand variations, and industrial power requirements while upholding fiscal discipline. It also complements Madhya Pradesh’s integrated energy strategy that combines thermal, hydro, and renewable sources to maintain grid stability and economic resilience.Despite ongoing concerns regarding the environmental impact of coal, the government emphasised that the upcoming plants will incorporate cleaner technologies and comply with revised emission norms. In this context, the greenshoe mechanism is positioned as a tool for disciplined, demand-driven capacity expansion rather than unrestricted coal reliance.As Madhya Pradesh aims to establish itself as a power-surplus state, the cabinet’s decision reflects a pragmatic blend of infrastructure planning and procurement innovation to support sustainable development. 

Next Story
Infrastructure Urban

VECV to Manufacture Volvo Group’s Advanced AMTs in India

VE Commercial Vehicles (VECV), a joint venture between Volvo Group and Eicher Motors, announced an investment of Rs 5.44 billion to produce and assemble Volvo Group’s 12-speed Automated Manual Transmission (AMT). The greenfield facility will be set up at Vikram Udyogpuri Integrated Industrial Township near Ujjain, Madhya Pradesh, and will cater to India and select Asia-Oceania markets.This investment marks a new milestone in the 18-year VECV-Volvo collaboration, which has already made VECV a global hub for Volvo Group’s 5 & 8 Litre (MDEP) engines since 2013, reinforcing the Make in Ind..

Next Story
Products

Action TESA Drives Shift from Plywood to Engineered Wood Solutions

Action TESA, a leading player in India’s panel industry, is spearheading the market transition from traditional plywood to engineered wood solutions such as Moist Master, HDHMR, and Boilo. These high-performance boards are redefining modular furniture, kitchen, and decorative applications with superior durability, design flexibility, and finish quality.Engineered wood offerings from Action TESA provide consistent quality, dimensional stability, and smooth surfaces, unlike plywood, which can have knots or gaps. The Moist Master, HDHMR, and Boilo BWP FR boards ensure excellent machinability, m..

Next Story
Infrastructure Urban

CREDAI-MCHI Donates Rs 30.65 Mn for Maharashtra Flood Relief

CREDAI-MCHI, the apex body of real estate developers in the Mumbai Metropolitan Region, has extended Rs 30.65 million to the Chief Minister’s Relief Fund to support rescue and rehabilitation efforts in flood-affected areas of central Maharashtra and neighbouring regions.The contribution was presented to Chief Minister Devendra Fadnavis by Sukhraj Nahar, President, and Rushi Mehta, Secretary, CREDAI-MCHI, in the presence of several leading developers from the Mumbai Metropolitan Region.A total of 44 member developers participated in this collective effort, underlining the real estate industry..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?