India added only 9.47 GW of thermal power capacity in FY26 — just 73% of the targeted 12.86 GW — as delays in equipment supplies, land acquisition and project execution slowed commissioning even as the country braces for peak electricity demand of nearly 270 GW this summer.
The slowdown comes at a time when policymakers are increasingly relying on coal-based generation to support grid stability amid rising electricity demand and rapid renewable energy expansion.
According to Central Electricity Authority (CEA) data, only 11 of the targeted 18 thermal generating units were commissioned during FY26, highlighting continuing execution bottlenecks in the sector.
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India’s peak power demand has already crossed 256 GW in April, surpassing the 241 GW recorded in the corresponding period last year, and is projected by the government to touch 270 GW during 2026.
Growing Grid Stability Gap
The widening gap between rising electricity demand and slower thermal capacity addition is emerging as a key concern for the power sector, especially during periods of extreme summer demand and renewable intermittency.
The country added only around 660 MW of thermal capacity in March, while February saw no capacity addition at all. In FY25 too, India added just 4.5 GW thermal capacity against a target of 15.36 GW, or only 29% of planned additions, indicating a second consecutive year of major slippages in thermal project execution.
Industry sources attributed the delays primarily to equipment supply constraints and land acquisition issues that continue to stall projects despite the government’s aggressive push to revive thermal power investments.
The Centre has planned addition of 97 GW of coal and lignite-based generation capacity by 2034-35 to meet rising electricity demand and maintain grid reliability alongside rapid renewable energy expansion.
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The commissioned projects in FY26 included major central and state sector plants such as North Karanpura STPP (660 MW), Barh STPP Stage-I (660 MW), Buxar TPP (660 MW), Patratu STPP (800 MW), Ghatampur TPP (660 MW), Khurja SCTPP (660 MW), Yadadri TPS (800 MW), Obra-C STPP (660 MW), North Chennai TPP Stage-III (800 MW) and Sagardighi TPP Stage-III (660 MW).
Under Construction vs. Stranded
The private sector commissioned four units with combined capacity of 1.65 GW during the year. As of March 31, thermal capacity of 39.36 GW remained under construction, while another 21.38 GW was categorised as stranded projects where work has either been stalled or is unlikely to be commissioned, according to CEA data.
For FY27, the government has set a thermal capacity addition target of 7.3 GW. However, rating agency ICRA has estimated actual additions at around 6 GW due to continuing execution challenges
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