Thermal power capacity addition slows 32% amid project delays

India’s thermal power generation capacity expansion has declined by 32% in the first 11 months of FY25, with only 3.9 GW of capacity added up to February 2025, down from 5.7 GW in the same period of FY24. The decline in capacity additions is largely attributed to delays in project commissioning, land acquisition issues, and material.

The government’s roadmap to add approximately 80 GW of new coal-based power capacity by 2032 aims to address India’s rising energy needs. Thermal power currently constitutes 52.6% of India’s total installed capacity, with the CEA projects this share will decline to 42.6% by FY27 and to 31.6% by FY32. The government.

Supply bottlenecks reaffirmed its plan to install 80 GW of new thermal capacity in November 2023 India’s thermal power sector has experienced a significant slowdown, with capacity additions decreasing by 32% in the first 11 months of FY25. According to provisional data from the Central Electricity Authority (CEA), only 3.9.

Causes of the Slowdown

The decline in capacity addition is primarily attributed to several execution-related challenges GW of thermal capacity was added by February 2025, compared to 5.7 GW during the same period in the previous fiscal year Delays in the supply of essential materials have further hampered the timely completion of projects.

• Project Execution Delays: Many thermal power projects are facing delays in commissioning due to issues with contractors and the availability of equipment Vikram V, Vice President and Co-Group Head of Corporate Ratings at ICRA Ltd., noted that while substantial progress has been made on many projects, last-mile completion delays are causing deferments in project.
• Land Acquisition and Right of Way (RoW) Issues: Securing land and obtaining the necessary rights of way have posed significant hurdles, leading to project postponements to achieve without addressing commissioning the underlying issues causing delays To address the challenges in thermal power capacity addition, several measures are being considered.

Impact on National Energy Goals

The slowdown in thermal capacity addition poses challenges to India’s broader energy objectives. The government aims to add 80 GW of thermal power capacity by FY32 to meet the country’s growing electricity demand . However, the current pace of additions suggests that this target may be difficult to achieve without addressing.

Shift Towards Renewable Energy

While thermal power remains a cornerstone of India’s energy mix, there is a noticeable shift towards renewable energy sources. In the first 10 months of FY25, the gross capacity addition stood at 24.4 GW, primarily renewable energy segment . This trend indicates a growing emphasis on sustainable energy.

Enhancing Domestic Manufacturing: Encouraging domestic production of thermal power equipment to reduce reliance on imports and mitigate supplyImplementing Implementing policies to expedite land acquisition and resolve RoW issues more efficiently policies to expedite land acquisition and resolve RoW issues more.

• Streamlining Land Acquisition Processes: Implementing policies to expedite land acquisition and resolve RoW issues more efficiently Implementing policies to expedite land acquisition and resolve RoW issues more efficiently Addressing these challenges is crucial for India to meet its energy demands and achieve its long-term goals of energy security sustainability.
• Incentivizing Project Completion: Providing incentives for timely project Implementing policies to expedite land acquisition and resolve RoW issues more efficiently execution to ensure that capacity addition targets are met Implementing policies to expedite land acquisition and resolve RoW issues more efficiently chain disruptions.​

Addressing these challenges is crucial for India to meet its energy demands and achieve its long-term goals of energy security and sustainability Implementing policies to expedite land acquisition and resolve RoW issues more efficiently.

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