Coal news and updates

Thermal power will remain crucial for base load management: Ind-Ra

Coal-based power will remain critical for base load management in the medium term, though renewable capacity additions remain strong, according to India Ratings and Research (Ind-Ra).

Furthermore, thermal capacity additions are expected to pick up pace in FY26, considering the capacity under construction and demand expectation by 2031-32 (FY32), Ind-Ra experts said in a webinar.

"We expect thermal power to remain critical for base load management in the medium term, though renewable capacity additions remain strong. Land acquisition, connectivity and adequate evacuation/transmission infrastructure remain key monitorables for the sector. The consistent functioning of the Late Payment Surcharge Rules 2022 supports the counterparty risk, even among entities selling directly selling to discoms," Vishal Kotecha, Director & Head - Infrastructure & Project Finance, Ind-Ra said.

Base load is the minimum demand observed over a day. This load is generally lowest during the night when solar isn't generating. Hence, non-solar capacity, especially thermal, is required to manage the base load, he explained.

Ind-Ra also maintains stable rating outlook for thermal power projects for the rest of FY26 based on healthy PLF, dependency on thermal, high revenue visibility through power purchase agreements (PPAs) and adequate internal liquidity.

During FY25 and April-July FY26, PPAs for over 17 gigawatts (GW) of new capacity were in various stages of approvals from state electricity regulatory commission, such as tender and power purchase signing, indicating a strong demand for thermal power purchase. Of the 17 GW, power purchase agreement has been signed for 2 GW.

Kotecha said thermal capacities contributed 71.5 percent to the total power generated during April-June quarter for FY26 with a share of 49.9 percent of the installed capacity. Ind-Ra expects thermal PLF to be healthy at 69-70 percent for FY26 and FY27, also supported by sufficient coal stock.