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Thermal Capacity Addition Misses Target; Spot Power Price Fall Seen as Temporary

India added only 4.53 GW of thermal power capacity in FY25, significantly short of its 15.4 GW target, according to the Central Electricity Authority. Only six of the planned 22 units were commissioned, with delays attributed to land acquisition and equipment supply issues. The government now aims to add 12.86 GW in FY26, but experts stress the urgency to start construction by 2026–27 to meet the 80 GW target by 2032, given the complexity of thermal project execution.

Meanwhile, a 28% year-on-year drop in real-time market electricity prices in May 2025, driven by early rains and increased renewable generation, is seen as a short-term anomaly. Executives from NTPC Green, Tata Power, and Waaree Energies agree this decline won’t impact long-term PPA signings or the development of new plants. Despite 18 GW of solar curtailment on May 25 and a 4% drop in energy consumption for the month, power demand is projected to keep growing due to sectors like data centres and rail electrification. The consensus is that renewable and hybrid energy projects will continue to expand as thermal capacity addition slows.