Thermal Power

  • India ranks 4th in Wind Power capacity and Solar Power capacity.*
  • All India installed capacity in 2029-30 is estimated to be 8,17,254 MW which includes 2,66,911 MW Coal, 25,080 MW Gas, 71,128 MW Hydro, 18,980 MW Nuclear and 4,35,155 MW Renewable Energy Sources. *
  • India to have 500 GW of non-fossil based electricity installed capacity by 2030.*
Reasons to Invest
  • Biomass has a huge potential as it is still an untapped resource with additional source of income, high scale of demand & favorable government policies in India.*
  • The government of India, through the Ministry of Power, launched the initiative of Ultra Mega Power Projects (UMPPs) in 2005. It comprises of 4,000 MW super thermal power projects (both pit head and imported coal-based) with the objective to develop large capacity power projects in India. Power Finance Corporation Ltd (PFC) was appointed as the nodal agency to facilitate the development of these projects. Various inputs for the UMPPs are tied up by the Special Purpose Vehicle (SPV) with the assistance of the Ministry of Power and Central Electricity Authority (CEA). CEA is involved in the selection of sites for these UMPPs.
  • UMPPs projects in the pipeline: *
    • Husainabad in Deoghar district in Jharkhand
    • Bijoypatna in Chandbali Tehsil of Bhadrak District, Narla & Kasinga sub-division of Kalahandi District in Odisha
    • Kakwara in Banka Distt in Bihar
    • Niddodi village in Karnataka
    • Sites in Tamil Nadu and Gujarat for their second UMPPs and a site in Uttar Pradesh are being examined
  • Consumers) Rules, 2020 were issued to make the electricity follow easy and transparent. *
  • Electricity (Promoting Renewable Energy through Green Energy open Access) Rules, 2022 have been issued to remove barriers in availability and utilisation of RE and to address the issues that have hindered the growth of open access for a long time. The Rules reduces the Open Access limit from 1 MW to 100 kW.*

Explore more about infrastructure availability in the Thermal Power sector >

Key Achievements
  • NTPC augments its solar footprint and achieves 69454 MW of installed capacity. *
  • As per the data from the Bureau of Energy Efficiency (BEE), Ministry of Power, the overall energy efficiency for split Room ACs has improved by 43% for 1-Star and 61% for the 5-Star level.*
  • Green Energy Open Access Rules, 2022 are a major step towards India cutting emissions by 45% in line with NDC target for 2030.*
  • Roughly 97,000 Metric Tonnes (MT) of agro-residue based biomass has been co-fired with coal in thermal power plants to date, which has resulted in a reduction of over 1.2 Lakh Metric Tonnes (LMT) of carbon dioxide emissions.*
  • National Open Access Registry (NOAR) has been designed as an integrated single window electronic platform accessible to all stakeholders including open access participants, traders, power exchanges, national/regional/state load despatch centres for electronic processing of short-term open access application thereby automating the administration of the short-term open access in inter-state transmission system. *
Recent Announcements

18th Aug 2023: Union Power Minister dedicates to the nation NTPC’s 660 MW Super Thermal Power Project in Barh, Bihar

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10th Aug 2023: Total Power Generated in the Country grows by more than 8% year-on-year in 2021-22 and by 9% in 2022-23

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02nd Aug 2023: Revised Biomass Policy mandates 5% biomass co-firing in Thermal Power Plants from FY 2024-25: Union Minister for Power and New & Renewable Energy

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27th Jul 2023: Adequate Generation Capacity available to meet the electricity demand in the country: Shri R. K. Singh, Union Power & NRE Minister

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27th Jul 23: All Thermal Power Plants required to comply with Emission Norms notified by MOEFCC02: Shri R. K. Singh, Union Power & NRE Minister

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  • Electricity generation (weight: 19.85 per cent) increased by 3.3 per cent in June, 2023 over June, 2022. Its cumulative index increased by 1.0 per cent during the quarter April to June, 2023-24 over the corresponding period of previous year.*
  • While 14 out of these plants belong to NTPC, there are 21 power plants from the State and Private sector, thus, quadrupling the number of plants within an year.*
  • The electricity generation target (Including RE) for the year 2023-24 has been fixed as 1750 BN Unit (BU). i.e. growth of around 7.2% over actual generation of 1624.158 BU for the previous year (2022-23).*
Growth Drivers
  • Government plans to reduce the share of coal based thermal power generation capacity to 32% by 2030 as against the present share of 52%. *
  • Co-firing of agro residue pellets with coal has started in 39 thermal power plants. *
  • Central Transmission Utility of India Limited (CTUIL) has successfully integrated filing of Applications for grant of Connectivity, Long Term Access and Medium-Term Open Access to Inter State Transmission System (ISTS) in India as well as to Participating Entities located in the Neighboring Countries through the National Single Window System (NSWS) portal. It will enables ‘Single-point’ approvals as well as clearances needed by Investors, Entrepreneurs, and Businesses in India thereby facilitating ‘Ease of Doing Business’ initiatives by Ministry of Power. *
  • Ministry of Power has notified Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 on 06.06.2022 in order to further accelerate our ambitious renewable energy programmes, with the objective of ensuring access to affordable, reliable, sustainable and green energy for all. *  
  • PM dedicates and lays foundation stone of green energy projects of NTPC worth over INR 5200 cr. *
  • The national portal for Rooftop solar is launched to enable online tracking of the process of installation of rooftop solar plants, starting from registering the applications to release of subsidy in residential consumers’ ('beneficiaries’) bank account after installation and inspection of the plant. The estimated capacity under the national solar rooftop program is 4000 MW. * 
FDI Policy
  • Under the automatic route, 100% Foreign Direct Investment (FDI) is allowed in the Power industry for generation from all sources (except atomic energy), transmission and distribution of electric energy and power trading, subject to all the applicable regulations and laws.
  • FDI in power exchanges up to 49% registered under Central Electricity Regulatory Commission (Power Industry) Regulations, 2010 under the automatic route, subject to the following conditions, as laid down in the Policy:
    • Foreign Institutional Investors (FII)/ Foreign Portfolio Investors (FPI) purchases shall be restricted to the secondary market only
    • No non-resident investor/entity, including persons acting in concert, will hold more than 5% of the equity in these companies
    • The foreign investment will have to comply with the Securities & Exchange Board of India (SEBI) regulations and the applicable laws/regulations, security and other conditions.
  • The cumulative FDI equity inflow in the Power sector is USD 16.58 bn during the period April 2000 to March 2023. This constitutes 2.61% of the total FDI inflow received across sectors. *


Read more about Foreign Direct Investment Policy in India >

Sector Policy
  • Scheme for Procurement of Aggregate Power of 4500 MW: The objective of the scheme is to help states that are facing power shortage and help generation plants to increase their capacities.*

  • Ministry of Power issues amendment in the revised consolidated Guidelines & Standards dated for Charging Infrastructure for Electric Vehicles:
    • The public charging stations shall have the feature of prepaid collection of service charges with the time of the day rates and discount for solar hours.
    • CEA will periodically recommend to the State Government the ceiling limit of service charges to be levied. This Committee shall also recommend "time of the day rate " for service charges as well as the discount to be given for charging during solar hours.


  • Elimination of licensing for electricity generation projects
  • Increased competition through international competitive bidding
  • Demarcation of transmission as a separate activity


Revised Tariff Policy, 2016:

  • Ensure the availability of electricity to consumers at reasonable and competitive rates
  • Ensure financial viability of the sector and attract investments Promote transparency, consistency and predictability in regulatory approaches across jurisdictions and minimize perceptions of regulatory risks
  • Promote competition, efficiency in operations and improvement in the quality of supply
  • Promote the generation of electricity from renewable sources 
  • Promote hydroelectric power generation including Pumped Storage Projects (PSP) to provide adequate peaking reserves, reliable grid operation and integration of variable renewable energy sources
  • Evolve a dynamic and robust electricity infrastructure for better consumer services
  • Facilitate the supply of adequate and uninterrupted power to all categories of consumers
  • Ensure creation of adequate capacity including reserves in the generation, transmission and distribution in advance, for the reliability of supply of electricity to consumers. 


  • Govt. of India undertook the initiative for setting up of Ultra Mega Power Projects of 4 GW capacity each, to reap the benefits of economies of scale, and provide fast capacity addition. The Ministry of Power identified Power Finance Corporation (PFC) as the nodal agency for the UMPPs. To enhance investors' confidence, reduce risk perception and get a good response to competitive bidding, PFC incorporated Special Purpose Vehicles (SPVs) for each UMPP. The SPVs take up the bidding process on behalf of the power procuring (beneficiary) states. The purpose of the SPVs is to carry out the bid process management and obtain various clearances/consents for the projects. Thus, the same is transferred to the successful bidder along with the SPV, who are selected through the tariff-based International Competitive Bidding (ICB). The logistic support provided by the SPV, prior to award of the project, is considered necessary - to enhance the investor’s confidence, reduce risk perception and get a good response to the competitive bidding process. Based on the above initiative of the Government of India and its implementation process, four UMPPs -Sasan in Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand - were awarded to the successful bidders. Mundra UMPP and Sasan UMPP are fully commissioned and are generating electricity.


  • The government of India launched two schemes, namely, Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS) in December 2014. It provides a capital subsidy to the States for strengthening sub-transmission and distribution networks in rural areas and urban areas. Under the DDUGJY scheme, a capital subsidy is being provided for feeder separation, electrification of unelectrified villages and households, metering and system strengthening & augmentation of the distribution system in rural areas. The erstwhile scheme of RGGVY was subsumed in DDUGJY as a separate component for rural electrification in the country. Under the IPDS Scheme, a capital subsidy is provided for strengthening and augmentation of the distribution system. A capital subsidy is also provided for the metering of distribution transformers/feeders/consumers, and IT enablement in the distribution sector in the urban areas. The erstwhile Restructured Accelerated Power Development and Reform Programme (R-APDRP) scheme was subsumed in the IPDS as a separate component for IT enablement and system strengthening.


  • The Ministry of Power has launched the UJALA (Unnat Jyoti by Affordable LED for All) scheme for the replacement of 770 mn incandescent domestic bulbs with energy-efficient LED bulbs in the country.
  • EESL distributes 36.69 cr LED bulbs, Installs 1.14 cr LED streetlights under UJALA; Results in cumulative energy savings of 55.32 bn kWh per year.
  • EESL installs about 1.14 cr LED streetlights under SLNP; Results in estimated energy savings of 7.67 bn kWh per year 


  • The Fuel Supply Agreement with Coal India Ltd. will ensure the availability of coal for power companies over the long term.


  • To reduce dependency on imported coal, a PPP policy framework is planned to be devised with Coal India Ltd. to increase coal production.


  • The Government of India is planning to revise the National Electricity Policy to bring out far-reaching changes in the Power industry. This includes ensuring a cleaner atmosphere by increasing renewable generation including rooftop solar PV generation, increasing electric vehicles in cities and towns, improved power supply reliability to consumers through the smart grid. This policy would also encourage efficient utilization of resources including land and water.


  • The Scheme "UDAY" (Ujwal DISCOM Assurance Yojana) was formulated and launched by the Government in November 2015, for the financial and operational turnaround of State-owned DISCOMs (Electricity Distribution Companies). The scheme UDAY envisages reform measures in all sectors – generation, transmission, distribution, coal, and energy efficiency. The scheme aims to reduce the interest burden, reduce the cost of power, reduce power losses in distribution and improve the operational efficiency of DISCOMs. The scheme also incentivizes the States by
  • Exempting State takeover of DISCOM debts from Fiscal Responsibility & Budget Management (FRBM) limits for two years
  • Increased supply of domestic coal
  • Coal linkage rationalization
  • Liberally allowing coal swaps from inefficient to efficient plants
  • Allocation of coal linkages to States at notified prices and additional/priority funding in schemes of the Ministry of Power and the Ministry of New & Renewable Energy, if they meet the operational milestones in the scheme.
  • The scheme also envisages that the States accepting UDAY and performing as per operational milestones will be given additional/priority funding through DDUGJY, IPDS and Power System Development Fund (PSDF) or other such schemes of the Ministry of Power and Ministry of New and Renewable Energy. These States shall also be supported with additional coal at notified prices and, in case of availability through higher capacity utilization. The States not meeting operational milestones will be liable to forfeit their claim on IPDS and DDUGJY grants.


  • The Integrated Power Development Scheme (IPDS) envisages strengthening of sub-transmission and distribution network including metering at all levels in urban areas. The major components of the scheme are as under: 
  • a) Strengthening of sub-transmission and distribution network 
  • b) Metering 
  • c) IT application-ERP and Customer Care Services 
  • d) Provisioning of Solar Panels 
  • e) Ongoing works of R-APDRP to be completed. 

The projects worth INR 30,692 crore has been sanctioned under IPDS, against which, INR 14,402 crore has been released towards projects and INR 206 crore released for enabling activities.


  • The government of India launched Pradhan Mantri Sahaj Bijli Har GharYojana – Saubhagya in September 2017 with the objective to achieve universal household electrification by providing electricity connections to all willing un-electrified households in rural and all poor households in urban areas across the country, by March 2019. 


  • This programme aims to impact India’s climate change action. If all 300 mn lights in India were replaced, the total energy savings would be 40,743 mn kWh/year, avoided peak demand of 22,743MW/year and CO2 reductions of 37 mn tons per year.

Perform Achieve and Trade (PAT) scheme

  • The scheme targets carbon emission reduction in 13 energy-intensive sectors, leads to energy savings of about 17 MTOE and results in mitigation of about 87 mn tonnes of CO2.

Commercial Auction of coal on revenue share mechanism

  • Under this scheme, total of 2 tranches have been successfully completed and third Tranche is currently under process. From these two tranches total of 28 coal mines have been successfully auctioned for which Vesting order have been signed for 27 coal mines.

Allowed sale of excess coal production

  • The Ministry of Coal has amended Mineral Concession Rules, 1960 with a view to allowing sale of coal or lignite, on payment of additional amount, by the lessee of a captive mine up to 50 percent of the total coal or lignite produced in a financial year, after meeting the requirement of the end use plant linked with the mine.
  • This is applicable for both the private and public sector captive mines.
  • With this amendment, the Government has paved the way for releasing of additional coal in the market by greater utilization of mining capacities of captive coal and lignite blocks, which were being only partly utilized owing to limited production of coal for meeting only their captive needs.

Rolling auction

  • In order to expedite the process for conducting auction and to carryout more rounds of auction in a year, a mechanism of rolling auctions of coal mines has been planned. Under this mechanism, upon completion of the electronic auction process of a tranche, the next tranche of auction would be launched for following mines:
  • a. Mines where no bid or only single bid was received in the previous tranche of auction (except for those mines where Ministry of Coal decides to go for second attempt of auction)
  • b. New mines, if any, identified by Ministry of Coal
  • In the current III tranche of commercial auction, total of 48 coal mines have been rolled over from the II tranche of mines.

Single Window Clearance

  • The Union government has already launched Single Window Clearance portal on 11.01.2021 for the coal sector to speed up the operationalisation of coal mines.
  • It is an unified platform that facilitates grant of clearances and approvals required for starting a coal mine in India. Now, the complete process shall be facilitated through Single Window Clearance Portal, which will map not only the relevant application formats, but also process flow for grant of approval or clearances.

Revamped Distribution Sector Scheme*

  • Ministry of Power’s flagship Revamped Distribution Sector Scheme which is aimed at improving the operational efficiencies and financial sustainability of Distribution Companies.
  • With an outlay of INR 3,03,758 crore over a period of five years from FY 2021-22 to FY 2025-26, the scheme aims to provide financial assistance to DISCOMs for modernization and strengthening of distribution infrastructure, aiming at improvement of the reliability and quality of supply to end consumers.
  • It is also proposed to provide 25 crore Smart Prepaid meters to consumers all over the country.

Explore Government policies/ schemes in Thermal Power sector >

Financial Support


  • The total budgetary allocation for FY 2022-23 towards the Ministry of Power is INR 16,074.74 cr.


  • Industries and infrastructure sectors including the power/energy efficiency sectors with in-house R&D centers get a write-off in revenues and capital expenditure incurred on R&D.
  • A weighted tax deduction is given under section 35 (2AA) of the Income Tax Act to industry/private sponsored research programmes.
  • A weighted deduction of 200% is granted to assesses for any sums paid to a national laboratory, university or institute of technology, or specified people with a specific direction. The said sum will be used for scientific research within a programme approved by the prescribed authority.


  • India offers additional incentives for industrial projects in certain states.
  • Incentives are in areas such as rebates in land cost, the relaxation of stamp duty exemption on the sale and lease of land, power tariff incentives, a concessional rate of interest on loans, investment subsidies, tax incentives, backward area subsidies and special incentive packages for mega projects.


  • Incentives are available for the setting up of projects in special areas like the North-east, Jammu & Kashmir, Himachal Pradesh, and Uttarakhand.
Investment Opportunities

Thermal Power Projects

Hydro Electric Projects


  • Components
  1. Separation of agriculture and non-agriculture feeders
  2. Strengthening and augmentation of sub-transmission and distribution systems including metering
  3. Rural electrification including off-grid solutions
  • Objectives
  1. Electrification of 18452 un-electrified villages by 01 May 2018
  2. Providing electricity access to 50 mn households
  • Investment Opportunities

Total Outlay: $11.67 Bn

1. System Strengthening: 

Power Transformers: 14,491 nos

Distribution Transformers: 317,068 nos 

Conductors: 869,521 km 

Energy Meters: 11 mn nos

2. Metering the un-metered

Feeder/Boundary/ DTs: 1.19 mn nos

Energy Meters: 9.99 mn nos

  • Achievements 
  1. 1227 additional villages were identified by the states for electrification in addition to 18452 un-electrified villages reported by states in 2015. Out of these 19679 villages, electrification in 18379 villages have been completed and remaining 1305 villages found to be inhabited/grazing reserve.
  2. Under the DDUGJY scheme, the country has achieved 100% electrification of villages. As 2.81 cr households were electrifying in record time.
  3. The government of India launched the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) scheme with a total outlay of INR 75,893 cr (DDUGJY: INR 43,033 cr and RE Component: INR 32,860 crore).20


Total outlay: $11.78 Bn with gross budgetary support of $7.39 Bn from Government of India (including erstwhile R-APDRP)

  • Components
  1. Strengthening of sub-transmission and distribution networks in the urban areas
  2. Metering of distribution transformers/feeders/ consumers in the urban areas.
  3. IT enablement of the distribution sector and strengthening of distribution network under R-APDRP.
  • Investment opportunities

1. Metering: $317.07 Mn; Sub Stations (New + Augmentation): $592.61 Mn; HT / LT Lines (New + Augmentation): $1.27 Bn; DTs (New + Augmentation): $495.23 Mn; UG Cabling (HT & LT): $339.87 Mn; Rooftop Solar / net metering: $36.30 Mn; Misc. (ABC cable, R&M, Capacitor etc): $696.76 Mn.

  • Objectives
  1. Electrification of 18452 un-electrified villages by 01 May 2018
  2. Providing electricity access to 50 mn households


Explore projects to invest in Thermal Power sector >

Sector Reports

Year-End- Review of Ministry of Power– 2022

Foreign Investors
  • CLP Holdings (Hong Kong)
  • GE Energy (USA)
  • AES (USA)
  • Kosep (South Korea)
  • Abellon Clean Energy (Canada)
  • GDF SUEZ (France)
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  5. “Power Sector at a Glance - ALL INDIA,” Ministry of Power Website, 
  6. “ULTRA MEGA POWER PROJECTS,” Ministry of Power Website,
  7. “BP Statistical Review of World Energy- June 2019,” British Petroleum (BP) Website,
  8. “Energy is the key driver of Socio-Economic growth’,” PIB Website: PMO,
  9. Factsheet on FDI - April 2000 to December 2021Department for Promotion of Industry and Internal Trade, 
  10. “Power Sector at a Glance - ALL INDIA,” Ministry of Power Website,
  11. All India Installed Capacity (in MW) of Power Stations, Central Electrical Authority, Ministry of Power,
  12. “Outlay on major Schemes,” Union Budget Website,
  13. Ministry of Power- Annual Report,
  14. PIB Release,,years%2C%20said%20Shri%20Pralhad%20Joshi.&text=The%20coal%20and%20lignite%20PSUs%20have%20planned%20to%20spend%20Rs.
  15. Annual Report, Ministry of Petroleum and Natural Gas,
  16. Ministry of Coal- Monthly Report,
  17. Ministry of Power- Monthly Report
  18. PIB
  19. Ministry of Power- Monthly Report,
  20. PIB Release,
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  22. Indian Investment Grid,
  23. Ministry of Power,
  24. PIB Release,
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  28. Ministry of Power- Monthly Report,

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