India to add 97 GW of new coal capacity by 2035 for supply reliability
CEA warns of “high-risk phase” in energy transition with steep ramping needs
Nuclear capacity to jump tenfold by 2047; pumped storage to hit 60 GW by 2033
CERC working on new capacity market, ancillary service reforms and storage incentives
Push for domestic storage technologies to reduce reliance on imported lithium
India is set to overhaul its power market design and add 97 gigawatts (GW) of new coal-based capacity by 2035, as regulators seek to tackle grid reliability challenges posed by surging renewable energy, senior officials from the Central Electricity Authority (CEA) and regulator Central Electricity Regulatory Commission (CERC) said on September 16, 2025.
Reiterating a disclosure made in Parliament during the monsoon session, CEA chairperson Ghanshyam Prasad told an energy dialogue by consulting agency KPMG that India has approved plans for around 97 GW of new coal-based power capacity by 2035 to ensure round-the-clock supply as renewable penetration accelerates.
Prasad said the government has recalibrated its resource mix strategy after identifying risks to stability during non-solar hours. “We saw challenges coming ahead and that is how we devised our strategy,” Prasad said, adding that 70 GW will be located in renewable-rich states, with another 27 GW rolled out gradually.
These plants are expected to run until 2050, providing firm backup as India pursues its 500 GW renewable energy target for 2030 and its net zero goal for 2070. The country’s installed non-fossil fuel capacity already stands at 252 GW.
Prasad warned that India’s transition is entering a high-risk phase, marked by volatile demand, steep ramping requirements and rising system reliability costs.
The CEA is now updating its resource adequacy and transmission plans annually and for the first time has extended them to the intrastate level. Studies have been completed for 11 states and will cover the rest by December, providing “visibility” for distribution companies and manufacturers to align long-term investments.
The plans map expected demand growth from emerging high-load sectors such as green hydrogen, green ammonia and large-scale data centres, which will require dedicated green supply.
India is also pushing a tenfold increase in nuclear capacity, from 8.8 GW today to around 100 GW by 2047, backed by new policies to enable players beyond the state-run Nuclear Power Corporation of India Ltd (NPCIL).
Hydro pumped storage is set for a major expansion, with capacity targeted to rise from 4.7 GW to nearly 60 GW by 2033. Prasad said 2.8 GW will be commissioned this year, 2.6 GW next year and 13 GW the year after, adding that “closed-loop off-stream hydro projects are seeing huge private interest.”
CERC Chief of Regulatory Affairs and Power Market SK Chatterjee flagged the operational and market design challenges posed by intermittent renewables.
He said the system is grappling with very low net load during the day and steep ramping needs in the evenings, forcing thermal plants to operate at minimum technical levels.
“Reliability and affordability do not necessarily go hand in hand,” Chatterjee said. “We are trying to flex the thermal fleet and create incentives for reserves through ancillary services, but the absence of down reserves during the day is a real concern.”
Chatterjee added that CERC is working on a new capacity market design, reforms to ancillary services, and mechanisms to incentivise battery and pumped storage projects. A discussion paper on wholesale market redesign is expected soon.
Prasad also emphasised the need to accelerate alternative storage technologies such as sodium-ion, sodium-sulphur and CO₂-based long-duration storage to avoid reliance on imported lithium batteries. He noted that India’s estimated pumped hydro potential had jumped from 94 GW to 214 GW within a year, underscoring untapped domestic scope.
“We must build storage solutions that are immune to global supply chain shocks,” he said, urging faster domestic manufacturing under Make in India mandates.
Chatterjee added that regulations would remain “dynamic and adaptive rather than rigid”, to respond to rapid shifts in technology and markets while still providing investor confidence.