Coal plants’ PLF to fall to 55% by FY32: Report
More solar entering the generation mix is likely to push down the coal fleet’s utilisation and thermal power is likely to become more expensive
- Oct 29, 2025,
- Updated Oct 29, 2025 12:46 PM IST
As India plans to add 80 GW of thermal capacity by 2032, a global report released on Wednesday said that utilisation rates or plant load factors (PLFs) of Indian coal plants will fall to 55% in FY 2031-32 from 69% in FY 2024-25, as coal shifts from being a baseload provider to a flexible balancing resource.
The report by energy think tank Ember, points that the coal fleet will be required to routinely swing by 70-80 gigawatts (GW) between morning and mid-day, operating only slightly above its technical minimum. Lower PLFs and higher flexing requirements will increase both per unit capacity-carrying (fixed) and operating costs for coal under power purchase agreements (PPAs).
“Already, coal-based electricity has become prohibitively expensive, with recently discovered tariffs above Rs 6/kWh in Bihar and around Rs 5.85/kWh in Madhya Pradesh, despite both states being located close to coal-producing regions. Much of this escalation is driven by very high fixed costs, often exceeding Rs 4/kWh,” it said.
Lower PLFs in FY 2031-32 can send such tariffs soaring. For example, a cost of Rs 6/kWh can effectively rise to Rs 7.25/kWh for an electricity distribution company (DISCOM) when adjusted for the utilisation levels reflected in Ember’s model.
India does not need to add more coal capacity than its existing National Electricity Plan (NEP) 2032 targets, neither for reliability nor peak coverage, says the think tank.
“India’s power system is entering a new phase of transition. As renewables gain a bigger share of the country’s generation mix and storage becomes cheaper, coal’s role diminishes. Building coal beyond the current pipeline is neither necessary nor economical for the country,” says the report’s author, Neshwin Rodrigues, Senior Energy Analyst - Asia at Ember.
The report recommends prioritising acceleration of storage deployment, retrofitting select thermal plants for deeper flexibility, and strengthening dispatch and reserve frameworks to support renewable integration at least cost.
“Having learned from past coal overbuild, India must avoid repeating old mistakes amid a rapidly changing energy landscape. Renewables with storage now clearly stand out as the more prudent investment choice,” says the report’s co-author, Duttatreya Das Energy Analyst—Asia at Ember.
As India plans to add 80 GW of thermal capacity by 2032, a global report released on Wednesday said that utilisation rates or plant load factors (PLFs) of Indian coal plants will fall to 55% in FY 2031-32 from 69% in FY 2024-25, as coal shifts from being a baseload provider to a flexible balancing resource.
The report by energy think tank Ember, points that the coal fleet will be required to routinely swing by 70-80 gigawatts (GW) between morning and mid-day, operating only slightly above its technical minimum. Lower PLFs and higher flexing requirements will increase both per unit capacity-carrying (fixed) and operating costs for coal under power purchase agreements (PPAs).
“Already, coal-based electricity has become prohibitively expensive, with recently discovered tariffs above Rs 6/kWh in Bihar and around Rs 5.85/kWh in Madhya Pradesh, despite both states being located close to coal-producing regions. Much of this escalation is driven by very high fixed costs, often exceeding Rs 4/kWh,” it said.
Lower PLFs in FY 2031-32 can send such tariffs soaring. For example, a cost of Rs 6/kWh can effectively rise to Rs 7.25/kWh for an electricity distribution company (DISCOM) when adjusted for the utilisation levels reflected in Ember’s model.
India does not need to add more coal capacity than its existing National Electricity Plan (NEP) 2032 targets, neither for reliability nor peak coverage, says the think tank.
“India’s power system is entering a new phase of transition. As renewables gain a bigger share of the country’s generation mix and storage becomes cheaper, coal’s role diminishes. Building coal beyond the current pipeline is neither necessary nor economical for the country,” says the report’s author, Neshwin Rodrigues, Senior Energy Analyst - Asia at Ember.
The report recommends prioritising acceleration of storage deployment, retrofitting select thermal plants for deeper flexibility, and strengthening dispatch and reserve frameworks to support renewable integration at least cost.
“Having learned from past coal overbuild, India must avoid repeating old mistakes amid a rapidly changing energy landscape. Renewables with storage now clearly stand out as the more prudent investment choice,” says the report’s co-author, Duttatreya Das Energy Analyst—Asia at Ember.