Report: India Supports $33 Billion Investment in New Coal-Fired Generation

Government officials in India have reportedly asked the country’s power companies to spend billions on equipment to support additional coal-fired generation. India is looking for ways to more quickly increase its baseload electricity supply as demand for power increases across the country.

Reuters news service on July 3 said the Indian government supports tenders for as much as $33 billion of new equipment, from both state-run and private generation groups. Sources told Reuters that companies such as government-owned NTPC and SJVN, along with private groups such as Adani Power and Essar Power, would be asked to add as much as 31 GW of new electricity supply through the end of the decade.

The sources told Reuters that fast-tracking orders for additional coal-fired power units was talked about during a meeting organized by Power Minister Manohar Lal. The meeting was held soon after Prime Minister Narendra Modi formed a federal cabinet in early June.

Reuters reported that one of the sources, who asked not to be named, said, “The last large orders for power equipment were placed for about 20 GW around 2009-10 when Chinese companies bagged a major pie.”

Government data shows India in recent years has ordered about 2 GW to 3 GW of new coal-fired capacity annually, though that increased to 10 GW of additional generation in 2023. India is adding renewable power generation, including from solar power, but has struggled to meet power demand—particularly at night—due to the intermittent nature of renewables. The country has set records for power demand after the pandemic, with India among the global leaders in economic growth post-COVID.

The country, like many others, also has endured more intense heat waves in recent years, driving more demand for power. Officials recently said India last month saw its largest shortfall of power supply versus demand since 2010. The government reportedly has postponed planned maintenance at some power stations, and invoked measures that mandate power companies to buy imported coal, and import electricity to avoid blackouts.

Sources told Reuters that New Delhi-based and state-run Bharat Heavy Electricals, which won all of the country’s power equipment contracts in auctions over the past year, is expected to receive most of the contracts for new equipment. The sources said Mumbai-based Larsen & Toubro, the country’s other power equipment manufacturer, did not participate in last year’s auctions.

Equipment suppliers such as Thermax–Babcock, BGR–Hitachi, and South Korea’s Doosan have closed manufacturing facilities in India, according to Reuters, due to uncertainty about the market for future coal-fired generation. India also since 2020 has asked power generators not to enter into contracts with companies that share a border with China, in part by mandating the Indian government approve all projects.

Reuters in March of this year reported that private groups in India discussed building at least 10 GW of new coal-fired generation capacity in the next decade.

—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).