India has over 250 gigawatts of thermal power generation capacity. Of the overall power sector, generation capacity is distributed across the private sector, state governments, and the central government. NTPC Limited, a unit under the central Ministry of Power, remains the largest utility in the country, operating around 16–17% of India’s total power capacity and delivering nearly a quarter of its total electricity output.
While historical energy deficits have been significantly reduced through grid expansion and universal household connection programs, thermal power remains essential to India’s economic planners as a reliable baseload energy source during peak demand.
Fossil fuel and thermal plants have continued steady capacity additions, alongside a major expansion in renewable energy sources. Coal-fired power continues to account for approximately 65–70% of total electricity generation in India; while the country has the fifth largest coal reserves in the world, it also imports coking coal and high-calorific thermal coal from Australia, Indonesia, and South Africa. Annual domestic coal production has crossed the 1 billion metric ton milestone to keep pace with demand. Under current national energy plans, clean coal capacity and new ultra-supercritical thermal projects under construction exceed 40 gigawatts to meet future power requirements.
India presents significant investment opportunities for foreign power companies. The government also encourages foreign direct investment; the National Tariff Policy allows power companies to make relatively predictable returns on invested capital. This sector is profitable in India, generating 15-17% margins with fixed purchase power agreements.
American companies have made some moves. Virginia-based AES Corporation operates a dual 210-megawatt thermal power unit in Odisha in eastern India. AES proposed a new “super-critical” thermal power plant to be built in the state of Chhattisgarh. A super-critical plant operates at higher temperatures to maximize fuel efficiency and minimize greenhouse gas emissions. The new AES plant will have an efficiency rating of 45% as well as reduced carbon, nitrogen, and sulfur emissions.
India’s Ministry of Environment, Forest and Climate Change (MoEFCC) enforces strict environmental standards requiring thermal power stations to install Flue-Gas Desulfurization (FGD) systems and low-NOx burners to curb sulfur dioxide and nitrogen dioxide emissions. India is on a clear path toward safer and cleaner operational standards for coal-fired power plants.
Circulating fluidized bed-combustion, another clean coal process, has a 45% efficiency rate and results in reduced pollution rates. It is currently utilized in 60 thermal power units across India including the Neyveli Lignite Corporation complex in Tamil Nadu and Simhadri Power Plant in Andhra Pradesh. This process will become more common as India imposes regulations on existing coal-fired power plants.
Thermal power in India is a rapidly expanding sector. As India becomes more populated and industrialized, efficient power plants and clean coal techniques must also develop to keep up with the times.
Last updated: August 5th, 2026
