India’s installed thermal power capacity based on coal and lignite is projected to rise to around 3,07,000 MW by 2034–35, up from 2,11,855 MW as of March 31, 2023, according to estimates by the Central Electricity Authority (CEA).

The assessment is part of the generation expansion planning exercise carried out by the CEA to determine the optimal mix of generation resources—including coal, hydro, solar, wind, storage, and nuclear—to meet the country’s projected electricity demand. The study factors in capital costs, fuel costs, operation and maintenance expenses, and the useful life of various technologies.

To meet the projected requirement, the Ministry of Power has envisaged the addition of at least 97,000 MW of new coal- and lignite-based thermal capacity. Since April 2023 and up to January 20, 2026, around 17,360 MW of thermal capacity has already been commissioned. A further 39,545 MW, including 4,845 MW from stressed thermal power projects, is currently under construction, while contracts for 22,920 MW have been awarded and are due for construction. In addition, about 24,020 MW of coal- and lignite-based capacity has been identified and is at various stages of planning.

The projected plant load factor (PLF) for coal-based power plants is estimated at around 61% by 2031–32, though actual utilisation will depend on factors such as growth in electricity demand and the pace at which renewable energy capacity is added.

The government said the generation expansion planning model compares coal-based generation with alternatives such as solar, wind, and storage by analysing technology costs, demand projections, renewable generation profiles, fuel costs, and operational characteristics. The cost of electricity from coal-based plants varies based on factors including plant life, distance from coal mines, and technology type.

Data shared by the government shows that the all-India weighted average rate of sale of power from existing coal-based plants over the past three years has ranged between ?4.36 and ?4.58 per unit, with the lowest tariff at about ?1.52 per unit. In comparison, tariffs discovered for new coal-based thermal projects through tariff-based competitive bidding in 2025 ranged between ?5.38 and ?6.30 per unit.

For firm and dispatchable renewable energy tenders awarded by Solar Energy Corporation of India in August 2024, tariffs were discovered in the range of ?4.98–4.99 per unit. The government, however, noted that a direct comparison between coal-based thermal power and firm renewable energy is not appropriate due to differences in operational characteristics, risk allocation, dispatch profiles, and cost structures.

The information was provided by Shripad Naik, Minister of State in the Ministry of Power, in a written reply to the Rajya Sabha