CEA Study Projects 3.07 Lakh MW Thermal Capacity Need by 2035; Govt Plans 97 GW Addition

To bridge this gap, the Ministry of Power has envisaged setting up an additional minimum 97,000 MW of coal and lignite-based capacity.

India’s generation expansion planning studies carried out by the Central Electricity Authority (CEA) project a significant requirement for additional coal and lignite-based thermal capacity to meet the country’s rising electricity demand over the next decade, the Government informed the Rajya Sabha.

In a written reply, Minister of State for Power Shri Shripad Naik said the CEA’s generation expansion planning exercise determines the optimal mix of generation resources — including coal, hydro, solar, wind, nuclear, and storage — based on parameters such as capital cost, fuel cost, operation and maintenance expenses, plant life, and system reliability.

Thermal Capacity Requirement to Rise to 3.07 Lakh MW by 2035

According to the study, India’s projected thermal capacity requirement by 2034–35 is estimated at around 3,07,000 MW, compared to the installed thermal capacity of 2,11,855 MW as on 31 March 2023.

To bridge this gap, the Ministry of Power has envisaged setting up an additional minimum 97,000 MW of coal and lignite-based capacity.

Progress in Capacity Addition Since 2023

The Government noted that thermal capacity addition is already underway:

• 17,360 MW commissioned since April 2023 (till 20 January 2026)

• 39,545 MW currently under construction, including 4,845 MW of stressed thermal power projects

• Contracts awarded for 22,920 MW, which is due for construction

• 24,020 MW of candidate coal/lignite capacity identified and at various planning stages

These steps are aimed at ensuring adequacy of baseload and dispatchable power as demand grows.

Coal Plant Load Factor Projected at 61% by 2031–32

The projected Plant Load Factor (PLF) for coal-based power plants by 2031–32 is estimated at around 61%. However, the Government clarified that actual PLF will depend on factors such as demand growth, renewable energy capacity addition, and operational dynamics of the grid.

Optimal Mix Model Compares Coal with Renewables and Storage

The generation expansion planning model undertakes comparative analysis between coal-based plants and renewable energy sources such as solar, wind, and storage solutions. It accounts for:

• Technology costs

• Renewable generation profiles

• Fuel price trajectories

• Storage duration requirements

• Operational flexibility and dispatch characteristics

This ensures that capacity expansion aligns with least-cost planning while meeting reliability needs.

Coal Tariffs: Existing vs New Projects

The Minister highlighted that coal-based electricity tariffs vary widely based on plant life, distance from coal mines, and technology type (sub-critical or super-critical).

• The all-India Weighted Average Rate of Sale of Power (WARSP) from existing coal plants over the last three years ranged between ₹4.36/kWh and ₹4.58/kWh

• The lowest tariff recorded was about ₹1.52/kWh

For new coal-based thermal power projects selected through Tariff Based Competitive Bidding (TBCB) in 2025, tariffs were discovered in the range of:

• ₹5.38 – ₹6.30/kWh

FDRE Renewable Tariffs Around ₹5/kWh

The Government also cited tariffs for firm and dispatchable renewable energy (FDRE) tenders awarded by SECI in August 2024, which were discovered at:

• ₹4.98 – ₹4.99/kWh

Direct Tariff Comparison Not Like-to-Like

While tariff ranges for new coal projects and FDRE renewables appear broadly similar, the Government cautioned against direct comparison, noting key differences in:

• Dispatch profile

• Fuel cost risks

• Contractual structures

• Operational obligations

• System reliability roles

Coal-based thermal power and FDRE projects serve different system requirements and involve distinct cost components.

Ensuring Reliable and Affordable Power Supply

The Ministry reiterated that India’s generation expansion strategy is designed to ensure a balanced, reliable, and cost-effective electricity supply, combining renewable growth with adequate thermal capacity for grid stability and round-the-clock demand fulfilment.