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CEA Projects Need for 97 GW of Additional Coal and Lignite Capacity by 2035

India will require nearly 3,07,000 MW of coal- and lignite-based thermal power capacity by 2034–35, according to a generation expansion planning study conducted by the Central Electricity Authority (CEA) under the Ministry of Power. The findings were shared by Minister of State for Power, Shripad Naik, in a written response to the Rajya Sabha.

The study evaluates the optimal combination of generation sources — including coal, hydro, solar, wind, storage, and nuclear — to meet the country’s projected electricity demand. It incorporates variables such as capital investment, fuel costs, operations and maintenance expenses, and the expected operational life of different technologies.

As of March 31, 2023, India’s installed coal- and lignite-based power capacity stood at 2,11,855 MW. To meet the anticipated requirement by 2035, the Ministry of Power has outlined plans to add at least 97,000 MW of new thermal capacity.

Progress toward this target is already underway. Between April 2023 and January 20, 2026, approximately 17,360 MW of thermal capacity has been commissioned. Additionally, 39,545 MW — including 4,845 MW categorized as stressed projects — is currently under construction. Contracts have been awarded for another 22,920 MW, which is expected to enter the construction phase. A further 24,020 MW of coal- and lignite-based projects is at various stages of planning nationwide.

The study estimates that coal-based plants may operate at a Plant Load Factor (PLF) of around 61% by 2031–32. However, actual PLF levels will depend on future electricity demand growth and the pace of renewable energy expansion.

The generation expansion modelling framework compares coal-fired power with renewable sources such as solar and wind, along with storage technologies. The analysis considers parameters including projected demand, fuel prices, cost structures, operational performance, and storage durations.

Electricity tariffs from coal-based plants vary based on factors such as plant vintage, proximity to coal mines, and whether the technology deployed is sub-critical or super-critical. Government data indicates that the all-India Weighted Average Rate of Sale of Power (WARSP) from existing coal plants over the past three years ranged from Rs4.36 per kWh to Rs4.58 per kWh, with the lowest recorded tariff at approximately Rs1.52 per kWh.

For new coal-fired projects awarded through tariff-based competitive bidding (TBCB) in 2025, discovered tariffs ranged between Rs5.38 per kWh and Rs6.30 per kWh. In comparison, firm and dispatchable renewable energy (FDRE) projects awarded by the Solar Energy Corporation of India (SECI) in August 2024 recorded tariffs in the range of Rs4.98–Rs4.99 per kWh.

While these tariff bands may appear close, the government clarified that direct comparisons are not appropriate. Differences in dispatch characteristics, fuel cost exposure, contractual structures, operational flexibility, and risk allocation between coal-based and FDRE projects make one-to-one tariff comparisons unsuitable.