Thermal Power May Draw Rs 770 Billion Private Investment
POWER & RENEWABLE ENERGY

Thermal Power May Draw Rs 770 Billion Private Investment

India’s thermal power sector is projected to attract Rs 770 billion in private sector investment between FY26 and FY28, driven by renewed interest from major players such as Adani Power, Tata Power, JSW Energy, and Vedanta Power. According to Crisil Ratings, total thermal investments—including those by public sector undertakings—are expected to double to Rs 2.3 trillion during the same period.
Private firms, which previously contributed only 7–8 per cent of thermal capacity funding, will now account for nearly a third, reflecting a shift in sentiment as long-term viability improves.
For the first time in over a decade, four state power distribution companies have signed 25-year power purchase agreements (PPAs) with private thermal developers. These long-term deals help reduce financial risk and enhance project feasibility.
India's power demand is expected to rise to over 366 GW by 2031–32. While solar and wind will provide 70 per cent of this, thermal power remains essential to meet round-the-clock supply due to the intermittent nature of renewables.
Of the 80 GW of new coal-based capacity targeted by 2032, 60 GW has already been announced. Notably, 19 GW of this is under construction by private developers. Most of the upcoming capacity will be added through brownfield expansions, avoiding land acquisition delays.
Among private players, Vedanta Power is preparing for a major transformation. Following its planned demerger, it intends to add 15 GW of thermal capacity, primarily via brownfield projects. This includes reviving a 2,200 MW portfolio—1,200 MW at the Chhattisgarh Thermal Power Plant (formerly Athena) and 1,000 MW at Meenakshi—both of which already have fuel linkages and infrastructure in place.
The projects are structured around a two-part tariff of Rs 5.5–Rs 5.8 per unit, with 60 per cent as fixed charges and the rest cost-plus, offering a 15 per cent internal rate of return. This model is expected to ensure timely execution and financial viability. 

India’s thermal power sector is projected to attract Rs 770 billion in private sector investment between FY26 and FY28, driven by renewed interest from major players such as Adani Power, Tata Power, JSW Energy, and Vedanta Power. According to Crisil Ratings, total thermal investments—including those by public sector undertakings—are expected to double to Rs 2.3 trillion during the same period.Private firms, which previously contributed only 7–8 per cent of thermal capacity funding, will now account for nearly a third, reflecting a shift in sentiment as long-term viability improves.For the first time in over a decade, four state power distribution companies have signed 25-year power purchase agreements (PPAs) with private thermal developers. These long-term deals help reduce financial risk and enhance project feasibility.India's power demand is expected to rise to over 366 GW by 2031–32. While solar and wind will provide 70 per cent of this, thermal power remains essential to meet round-the-clock supply due to the intermittent nature of renewables.Of the 80 GW of new coal-based capacity targeted by 2032, 60 GW has already been announced. Notably, 19 GW of this is under construction by private developers. Most of the upcoming capacity will be added through brownfield expansions, avoiding land acquisition delays.Among private players, Vedanta Power is preparing for a major transformation. Following its planned demerger, it intends to add 15 GW of thermal capacity, primarily via brownfield projects. This includes reviving a 2,200 MW portfolio—1,200 MW at the Chhattisgarh Thermal Power Plant (formerly Athena) and 1,000 MW at Meenakshi—both of which already have fuel linkages and infrastructure in place.The projects are structured around a two-part tariff of Rs 5.5–Rs 5.8 per unit, with 60 per cent as fixed charges and the rest cost-plus, offering a 15 per cent internal rate of return. This model is expected to ensure timely execution and financial viability. 

Next Story
Infrastructure Urban

Coal Ministry Achieves Milestones under Special Campaign 5.0

The Ministry of Coal and its Public Sector Undertakings (PSUs) have achieved notable milestones under the Special Campaign 5.0, focusing on cleanliness, operational efficiency, and sustainability across the coal sector. During the implementation phase from 2–31 October 2025, over 1,205 sites were cleaned, covering 68,04,087 sq ft, nearing the target of 82,51,511 sq ft. Scrap disposal of 5,813 MT against a target of 8,678 MT generated Rs 228.7 million in revenue. In addition, 1,11,248 physical and 30,331 electronic files were reviewed, with 74,123 weeded out or closed. Key initiatives showc..

Next Story
Infrastructure Energy

Vesting Orders Issued for Three Coal Blocks under Commercial Auctions

The Ministry of Coal’s Nominated Authority has issued vesting orders for three coal blocks under commercial coal block auctions on 23 October 2025. The Coal Mine Development and Production Agreements (CMDPAs) for these mines were earlier signed on 21 August 2025. The three blocks include Rajgamar Dipside (Deavnara), Tangardihi North, and Mahuagarhi. Of these, two are partially explored while one is fully explored, with a combined peak rated capacity of around 1 MTPA and geological reserves of approximately 1,484.41 million tonnes. These mines are expected to generate annual revenue of abou..

Next Story
Infrastructure Urban

TEC, IIT-Hyderabad Partner to Boost 6G and Telecom Standards

The Telecommunication Engineering Centre (TEC), technical arm of the Department of Telecommunications (DoT), has signed a Memorandum of Understanding (MoU) with the Indian Institute of Technology Hyderabad (IIT Hyderabad) for joint research and technical collaboration in advanced telecom technologies and standardisation. The partnership focuses on developing India-specific standards and test frameworks for next-generation networks, including 6G, Artificial Intelligence (AI), and Non-Terrestrial Networks (NTNs). It also aims to enhance India’s participation in international standardisation f..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?