India to Need 3.07 Lakh MW Thermal Power Capacity by 2035 Despite Renewables Push

New Delhi, February 9, 2026: India will require nearly 3,07,000 megawatts (MW) of thermal power capacity (coal and lignite) by the financial year 2034–35, highlighting the continued importance of coal-based electricity even as renewable energy expands rapidly.

The estimate has been made by the Central Electricity Authority (CEA) as part of its long-term generation expansion planning study, which evaluates the most cost-effective and reliable mix of power sources to meet future electricity demand.

Current vs Future Thermal Capacity

As of March 31, 2023, India’s installed thermal capacity stood at 2,11,855 MW. To bridge the gap between existing capacity and projected demand, the Ministry of Power has planned a minimum addition of 97,000 MW of coal and lignite-based power plants over the next decade.

Capacity Addition Progress So Far

Significant progress has already been made:

• 17,360 MW of thermal capacity commissioned since April 2023

• 39,545 MW currently under construction

  • Includes 4,845 MW of stressed projects

• 22,920 MW already awarded and moving toward construction

• 24,020 MW identified as candidate projects in various planning stages

Together, these additions are aimed at ensuring energy security and grid stability as electricity consumption continues to rise.

Coal Plants to Operate at Lower Utilisation

According to CEA projections, the Plant Load Factor (PLF) of coal-based power plants is expected to average around 61% by 2031–32.
Actual utilisation will depend on multiple factors, including:

• Growth in electricity demand

• Speed of renewable energy deployment

• Availability of coal

• Storage and grid-balancing capacity

Cost Comparison: Coal vs Renewables

Electricity costs vary widely depending on technology, location, and fuel access:

• Existing coal plants:

  • All-India weighted average tariff ranges between ₹4.36 and ₹4.58 per unit

  • Lowest tariffs go down to ₹1.52 per unit

• New coal projects (via competitive bidding):

  • Tariffs discovered in 2025 range from ₹5.38 to ₹6.30 per unit

• Firm & Dispatchable Renewable Energy (FDRE):

  • Tariffs discovered in SECI tenders (Aug 2024) around ₹4.98–₹4.99 per unit

However, experts caution against direct tariff comparison, as coal-based power and renewable-plus-storage projects serve different grid roles, involve distinct risks, and follow different operational and contractual frameworks.

Balanced Energy Mix Still Critical

The generation planning model used by the CEA compares coal, solar, wind, hydro, nuclear, and storage technologies based on:

• Capital and fuel costs

• Operating life

• Demand patterns

• Grid reliability

• Dispatch requirements

The findings reinforce that coal-based power will remain a critical backbone of India’s electricity system for at least the next decade, particularly for meeting base load and peak demand reliably.

Parliamentary Disclosure

This information was shared by Minister of State for Power, Shri Shripad Naik, in a written reply to the Rajya Sabha, underlining the government’s strategy of maintaining a balanced and resilient energy mix while continuing the renewable transition.