India’s push to make coal-fired power plants operate flexibly to balance rising renewable energy generation is running into mounting cost, technical and operational hurdles, with senior government officials flagging retrofit expenditure, higher operating costs and tariff implications even as battery storage increasingly emerges as a stronger grid-balancing alternative amid record electricity demand.
The issue assumes significance at a time when India’s electricity demand is hitting unprecedented highs. Peak power demand touched a record 270.82 GW this summer amid severe heatwave conditions, sharply increasing pressure on the grid during evening hours when solar generation drops and thermal plants are required to ramp up output rapidly.
Around midday, solar generation alone was contributing nearly 80 GW to the grid — roughly one-third of India’s total electricity generation at that hour — underlining the scale of balancing challenges once solar output declines sharply after sunset and thermal generation has to bridge the gap.
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The challenges surrounding coal flexibilisation were discussed during a high-level review meeting chaired by the power secretary in January, attended by officials from the ministry of power, central electricity authority (CEA), CERC, NTPC, Grid India and thermal power producers.
Technical Strain
Since 2019, the Centre has been pursuing a strategy to gradually reduce the minimum technical load (MTL) of coal-fired power plants from 55% to 40% to improve operational flexibility and absorb higher renewable energy generation. The strategy is aimed at enabling thermal plants to reduce generation during peak solar hours and ramp up quickly during evening demand peaks.
However, according to the meeting minutes, officials acknowledged that implementation progress “has not been commensurate with the phasing plan”, largely because of the “absence of an adequate regulatory and compensation framework, particularly in the case of State generating units”.
The minutes noted that the power secretary advised extending the implementation timeline for Phase-I of the 40% MTL framework by one year.
Rising Economic & Storage Challenge
At the same time, the economics of storage are changing rapidly. Solar and battery storage tariffs have fallen sharply, highlighted by a recent Madhya Pradesh auction where tariffs for Firm and Dispatchable Renewable Energy (FDRE) projects fell below ₹3 per unit for the first time in India, with a Solar+BESS project discovering a record tariff of ₹2.70 per kWh.
Officials during the meeting flagged growing concerns that coal-based plants, originally designed for stable baseload operations, may face operational stress and rising maintenance costs if forced into frequent ramping operations without major retrofits.
“It was briefed that operation at 40% MTL without retrofitting can cause accelerated wear and tear of critical equipment,” the meeting minutes stated.
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The meeting also highlighted concerns over higher heat rates, increased auxiliary power consumption, additional oil usage, lower efficiency and rising operation and maintenance expenditure under flexible operations. According to the minutes, compensation for increased O&M costs under flexible operations has not yet been incorporated into tariff regulations because of insufficient operational data.
The debate comes as renewable energy curtailment and balancing requirements rise sharply. An analysis by Duttatreya Das, Energy Analyst (Asia) at Ember, and Shreya Jai, Energy Lead at Climate Trends, estimated that India witnessed nearly 2.3 terawatt-hours (TWh) of flexibility-related renewable energy curtailment between July and December 2025 because the grid could not absorb excess solar generation.
The analysis highlighted that India’s thermal fleet reduced generation to nearly 120 GW during peak solar hours in April 2026 before ramping output back up to around 180 GW during evening demand, implying daily thermal ramps of nearly 60 GW.
“India is now thinking to make its coal fleet flexible so that it can move in sync with renewable energy,” the analysis noted, adding that the objective was to “unburden the grid and provide electricity supply with enough resilience and foresight”.
But the analysis warned that flexibilising coal could significantly increase generation costs.
“Flexibilising coal is not just a technical challenge — it is an economic one,” it said, noting that lower plant utilisation spreads fixed costs over fewer units of electricity, increasing tariff burdens on distribution companies.
The January meeting also reviewed comparative cost-benefit assessments between flexible coal operations and Battery Energy Storage Systems (BESS), amid rising investment momentum in storage infrastructure.
India currently has around 12 GW of energy storage system capacity linked to renewable energy pooling stations, with additional battery and pumped storage projects under development.
“Given the operational and technical complexities associated with coal flexibility, accelerating energy storage deployment offers a more immediate and scalable solution for grid balancing,” the analysis said.
The power ministry meeting further directed CEA to conduct additional pilot studies involving central, state and private generating companies to assess long-term operational impacts, equipment stress and compensation requirements before wider implementation of the flexible coal framework.
TOPICSCoalThis article was first uploaded on May twenty-four, twenty twenty-six, at twenty-three minutes past five in the evening.