India’s power sector is in extraordinary flux, as evidenced by the outright collapse of reliance on coal-fired electricity generation. As the country approaches the fiscal year 2031-32 (FY31-32), experts indicate that it can achieve reliability and flexibility without the need for new coal plants. The growing availability and use of solar energy is accelerating this transition. Creative answers have gone a long way towards increasing system flexibility.
The expected revolution in India’s coal power future is based on the expected shifting cost paradigm around coal-based power. By FY31-32, the marginal cost of coal power will be about 25% higher than it was in FY24-25. Due to this requirement, operational coal plants will need to run closer to their minimum technical capabilities. That shift will make them less efficient and less productive over the long run.
Decreasing Demand for Coal Plants
As the world’s third-largest emitter of carbon, India is heavily investing in greener alternatives. Consequently, demand for coal plants during the day is projected to decrease sharply. This increase in the use of solar energy will be a major step in moving away from coal energy. This change especially matters during the brightest hours of the day. According to recent modeling, India’s coal fleet dispatches 70GW to 80GW from early morning into midday. That trend is soon to change with a welcome surge in renewable energy sources becoming more popular.
Additionally, average plant load factors for coal plants are forecasted to decline, reaching as low as 55% by FY31-32. This decline leads to an increasing burden of fixed coal generation costs on each unit of output. The net effect of these changes is that the true cost of coal power increases. As a result, the long-term economics of keeping and operating current coal plants will be put into sharper focus.
Prioritizing System Flexibility
In view of all these expected changes, India’s next round of power sector planning will need to emphasize increasing system flexibility. Regardless of what it looks like, experts say that adding storage solutions will be critical to handling the increased variability that comes with renewable energy sources. GPI says emerging energy storage technology will play a key role in balancing supply and demand, maintaining a reliable power supply despite the growing retirement of coal generation.
Operational reforms are equally notable as an essential part of the recipe for achieving improved system flexibility. These reforms will extend the operational lives of existing coal plants with selective retrofits. This will enable them to better pivot and innovate in the rapidly evolving energy landscape. These steps will guarantee that the electric sector can accommodate future demands while drastically reducing our dependence on fossil fuels.
The Future of Coal Power in India
Looking ahead, building more coal capacity doesn’t seem to be a priority for India’s power sector planners. Instead, stakeholders have begun looking more to clean, renewable energy resources that offer a truly long-term solution with sustainable and viable benefits. This ongoing transition is indicative of a stronger national move to lower carbon emissions and create a healthier, cleaner home for all.
These forecasts for India’s power sector are based on a time-slice, least-cost operations plan. This approach demonstrates the critical importance of strategic planning as energy dynamics are still shifting rapidly. Renewable energy sources—especially wind and solar—along with storage technologies are catching fire. Thus, the fate of India’s existing coal fleet is looking more and more questionable.