India's Power Surge: 5 GW Thermal Capacity Added in 6 Months! Is the Energy Target Achievable?

Energy

|

Updated on 13 Nov 2025, 01:10 pm

India has added 5.09 gigawatts (GW) of thermal power capacity in the first half of the current fiscal year (FY 2025-26), as per data from the Central Electricity Authority. This pace represents a sequential pick-up compared to previous periods. The national target for the entire fiscal year is 12.86 GW of thermal capacity addition. However, the overall trend shows a slowdown; for example, in FY25, only 4.53 GW was added against a target of 15.4 GW. Experts anticipate India might achieve approximately 9.4 GW this fiscal year. As of September 30, 2025, five thermal units have been commissioned, including three central sector and two state sector projects. Additionally, the private sector commissioned four units totaling 1.65 GW.

Currently, 26 thermal projects with a combined capacity of 37.62 GW are under construction. Analysts cite delays in equipment supply and land acquisition as primary reasons for commissioning setbacks.

Despite a growing commitment to renewable energy, India continues to affirm its reliance on coal-based power, planning to add 97 GW of coal and lignite capacity by 2034-35 to meet rising demand. Meeting peak demand requires firm generation sources, where thermal plants often play a crucial role due to shorter gestation periods and lower capital costs compared to hydro and nuclear.

Total installed capacity in India stood at 500.89 GW as of September 30, 2025, with thermal power accounting for 244.79 GW.

Impact This news is significant for the Indian stock market as it relates to crucial infrastructure development, energy security, and the performance of companies involved in the power generation and related supply chain sectors. The pace of capacity addition directly impacts economic growth and investor confidence in the energy sector. Rating: 8/10

Difficult Terms: Thermal Capacity: The maximum amount of electricity a thermal power plant can generate. Fiscal Year (FY): A 12-month period used for financial reporting and budgeting, which in India runs from April 1 to March 31. Commissioned: When a power plant or unit is completed, tested, and officially put into operation. Central Sector Projects: Projects undertaken by central government ministries or departments. State Sector Projects: Projects undertaken by state government ministries or departments. Peak Power Demand: The highest amount of electricity demand recorded over a specific period, usually daily or annually. Installed Capacity: The total rated capacity of all electricity-generating units that are connected and available for service. Renewable Energy: Energy derived from natural sources that are replenished at a higher rate than they are consumed, such as solar, wind, and hydro power. Gestation Period: The time taken from the conception of a project to its completion and operation.