India is expected to add approximately 8,000 MW of thermal power capacity by the end of FY25, falling short of the government’s ambitious target of 15,000 MW, as per sources close to the matter.
In FY24, the country saw the addition of around 6 GW of thermal units. So far in the current fiscal year, only two units, with a combined capacity of 1,320 MW, have been commissioned, both in December. Other projects are anticipated to go online by March, although delays persist due to challenges in land acquisition, balance of plant work, and material supply.
The government’s broader goal is to achieve an 80 GW increase in thermal power capacity by FY32, alongside a target of 500 GW in renewable energy to meet the nation’s growing electricity needs.
Vikram V, Vice President & Co-Group Head of corporate Ratings at ICRA, noted that the current under-construction thermal capacity is approximately 30 GW, with commissioning expected in the next 4-5 years. “Many of these projects are behind schedule due to execution challenges, including land-related issues,” he said. ICRA maintains that coal-based capacity will contribute 5-6 GW in the ongoing fiscal year.
With India’s energy requirements on the rise, the Central Electricity Authority (CEA) reported year-on-year growth of 8.2% in FY22, 9.7% in FY23, and 7.4% in FY24. By November of FY25, electricity consumption had increased by 4.4% to 1.15 trillion units.
Although India is committed to having 50% of its cumulative installed electric capacity from non-fossil fuel sources by 2030, it still relies heavily on coal-based and nuclear power sources to meet its base load demands.
Currently, thermal power accounts for 52.9% of India’s total installed electricity capacity, but this is projected to decline to 42.6% by FY27 and 31.6% by FY32, according to the CEA. This shift is due to the expected increase in clean energy capacity.
