India to Add 97 GW Coal and Lignite Based Thermal Capacity by 2035: CEA Study

India’s thermal power capacity requirement based on coal and lignite is projected to reach about 3,07,000 MW by 2034–35, according to a generation expansion planning study conducted by the Central Electricity Authority (CEA) under the Ministry of Power. This information was provided by the Minister of State for Power, Shripad Naik, in a written reply to the Rajya Sabha.

The study assesses the optimal mix of generation resources, including coal, hydro, solar, wind, storage and nuclear power, to meet India’s projected electricity demand. It factors in parameters such as capital costs, fuel expenses, operation and maintenance costs, and the useful life of generation technologies.

As of March 31, 2023, India’s installed coal and lignite-based capacity stood at 2,11,855 MW. To bridge the projected gap, the Ministry of Power has envisaged the addition of a minimum 97,000 MW of new thermal capacity based on coal and lignite.

Since April 2023, around 17,360 MW of thermal capacity has already been commissioned up to January 20, 2026. In addition, 39,545 MW of thermal power capacity, including 4,845 MW of stressed projects, is currently under construction. Contracts have also been awarded for another 22,920 MW, which is expected to move into the construction phase. A further 24,020 MW of coal- and lignite-based capacity has been identified and is at various stages of planning across the country.

The projected Plant Load Factor (PLF) for coal-based power plants is estimated to be about 61% by 2031–32, although actual PLF levels will depend on factors such as growth in electricity demand and the pace of renewable energy capacity addition.

The generation expansion model compares coal-based plants with renewable sources such as solar and wind, as well as storage technologies, by analysing costs, projected demand, fuel prices, operational characteristics and storage duration.

The cost of electricity generated from coal-based power plants varies depending on several factors, including the plant’s operating life, distance from coal mines and the type of technology used, such as sub-critical or super-critical units.

According to government data, the all-India Weighted Average Rate of Sale of Power (WARSP) from existing coal-based plants over the past three years has ranged between INR 4.36 per kWh and INR 4.58 per kWh, with the lowest tariff recorded at about INR 1.52 per kWh.

For new coal-based thermal power projects selected through the tariff-based competitive bidding (TBCB) route in 2025, discovered tariffs ranged between INR 5.38 per kWh and INR 6.30 per kWh.

Meanwhile, tariffs discovered under firm and dispatchable renewable energy (FDRE) tenders awarded by the Solar Energy Corporation of India (SECI) in August 2024 were in the range of INR 4.98–4.99 per kWh.

Although the tariff ranges appear broadly comparable, the government noted that a direct comparison is not appropriate due to differences in operational characteristics, fuel cost structures, risk allocation, dispatch profiles and contractual frameworks between coal-based and FDRE projects.