Coal power to get costlier

The report analyzes the rising effective costs of coal power in India due to underutilisation, which is expected to increase average tariffs by roughly 25% as PLFs fall. It highlights that fixed costs drive 85% of this increase, making new coal capacity economically inferior to Firm and Dispatchable Renewable Energy (FDRE). The author concludes that India's 2032 power goals can be met with the ~35 GW of coal already in the pipeline, rendering further expansion unnecessary and financially risky for distribution companies (DISCOMs).

• The effective cost of coal power in India is projected to rise by nearly 25% as plant load factors (PLFs) decline, with the average coal PLF expected to drop to approximately 55% by FY 2031–32. This cost increase is primarily driven by underutilisation, which accounts for nearly 85% of the effective cost rise because fixed costs are spread over fewer units of generation.
• Declining utilisation increases both fixed and variable costs for coal assets. Fixed costs rise due to the burden of underutilised assets, required retrofits costing between INR 100–400 million (USD 1.15-4.60 million) per unit, and higher O&M expenses from equipment wear. Variable costs increase as lower PLFs raise the station heat rate by 7–9%, increase auxiliary power consumption by 2–4% per kWh, and add INR 10–25 million (USD 0.11-0.29 million) in restart expenses per unit.
• New coal power is becoming prohibitively expensive compared to renewable alternatives. Tariffs for new coal plants have risen sharply, exceeding INR 6/kWh (USD 68/MWh) in Bihar and INR 5.85/kWh (USD 66/MWh) in Madhya Pradesh. In contrast, Firm and Dispatchable Renewable Energy (FDRE) tariffs range from INR 4.3–5.8/kWh (USD 49–67/MWh), and solar and storage tenders range from INR 2.9–3.6/kWh (USD 33–41/MWh).
• India does not require additional coal capacity beyond the ~35 GW currently under construction to meet its 2032 power sector goals. Approving further capacity would risk severe overcapacity and impose financial stress on DISCOMs by locking them into high-cost, underutilised assets.

APA

Ember (2025). Coal power to get costlier. https://ember-energy.org/chapter/coal-power-to-get-costlier/

Chicago

Ember. Coal power to get costlier. 2025. https://ember-energy.org/chapter/coal-power-to-get-costlier/.

Wikipedia

{{cite report |author=Ember |title=Coal power to get costlier |date=29 October 2025 |url=https://ember-energy.org/chapter/coal-power-to-get-costlier/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ember2025coal, author = {{Ember}}, title = {{Coal power to get costlier}}, institution = {Ember}, year = {2025}, month = oct, url = {https://ember-energy.org/chapter/coal-power-to-get-costlier/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }