India may raise coal power capacity as electricity demand outpaces plan

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India may raise coal power

Highlights

India may increase planned coal-fired power additions to 105–150 GW by 2035, surpassing the previous 97 GW target due to surging demand.
September power shortages reach 560 million kilowatt-hours, the highest since August 2023, as daily peak demand runs 45–50 GW higher year-on-year.
Coal generation rises 13.3% and hydropower falls 20% year-on-year in September, while India continues 50 GW annual renewable additions and broadens nuclear and pumped-storage projects.

Higher coal capacity needs through 2035

As reported by Reuters, India may need to add far more coal-fired power capacity than envisaged last year, after stronger demand pushes the system beyond earlier projections.

The country planned in 2025 to add 97 gigawatts of coal capacity to reach 307 GW by 2035, from about 230 GW currently. Ghanshyam Prasad, chairperson of the Central Electricity Authority, says the additional requirement could now rise to 105 GW or even 150 GW beyond last year's target.

Speaking at an event organised by the Indian Chamber of Commerce, Prasad says growing demand requires stable supply resources. His comments highlight how India is factoring in a sizeable coal expansion even while it keeps adding renewable generation.

Supply pressure and grid stability

Daily peak electricity demand this year is running about 45 GW to 50 GW above the level of a year earlier, partly because weaker monsoon rains reduce hydropower output and increase reliance on thermal plants.

India's power shortages rise to 560 million kilowatt-hours in September, the highest level since August 2023, even as coal-fired plants increase output to meet strong demand. Government data show coal-fired generation rises 13.3% in September from a year earlier, while hydropower generation falls 20% over the same period.

Prasad says the increased focus on coal does not mean India is slowing renewable energy development. The country adds about 50 GW of renewable capacity last year and is expected to keep adding more than 50 GW annually, while also relying on nuclear power and pumped-storage hydropower to maintain grid stability and secure reliable supply as demand keeps rising.

In our earlier article on NTPC’s planned green hydrogen hub in Andhra Pradesh, we reported that the company was in talks with potential overseas buyers for green ammonia and green methanol. We noted that securing long-term offtake agreements is crucial for scaling up hydrogen investments, as India targets 5 million metric tons of annual green hydrogen production by 2030 with government subsidies.

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