NEW DELHI. The Centre has outlined plans to add at least 97,000 MW of coal- and lignite-based thermal power capacity by 2034–35 to meet the country’s projected rise in electricity demand. Informing the Rajya Sabha, Minister of State for Power Shripad Naik said that studies conducted by the Central Electricity Authority (CEA) estimate a total thermal capacity requirement of around 3,07,000 MW by 2034–35, compared to the installed capacity of 2,11,855 MW as of March 31, 2023. The proposed capacity addition is aimed at bridging this projected gap and ensuring energy security amid sustained demand growth.
Since April 2023, about 17,360 MW of thermal capacity has already been commissioned up to January 20, 2026. In addition, 39,545 MW — including 4,845 MW of stressed projects — is currently under construction, while contracts for another 22,920 MW have been awarded and are pending execution. A further 24,020 MW of coal- and lignite-based projects has been identified and is at various stages of planning. The government expects the plant load factor (PLF) of coal-based plants to reach around 61 per cent by 2031–32, although actual performance will depend on factors such as demand growth and the pace of renewable energy expansion.
The CEA’s generation expansion planning model evaluates the optimal mix of coal, hydro, solar, wind, storage and nuclear power based on capital costs, fuel prices, operational characteristics and demand projections. The weighted average rate of sale of power from existing coal plants over the past three years has ranged between Rs 4.36 and Rs 4.58 per kWh, with the lowest tariff recorded at Rs 1.52 per kWh. New coal-based projects awarded through tariff-based competitive bidding in 2025 have tariffs ranging from Rs 5.38 to Rs 6.30 per kWh, while firm and dispatchable renewable energy (FDRE) tenders awarded in August 2024 are priced between Rs 4.98 and Rs 4.99 per kWh. However, the government noted that direct tariff comparisons are not appropriate due to structural differences in risk allocation, fuel costs, dispatch profiles and contractual frameworks between coal-based and renewable power projects.
