India added 1.6 GW of thermal power capacity till May 31, up 60% from 1 GW in the same period of FY26, but execution delays and stranded projects remain a concern as peak power demand rises sharply and is expected to touch 300 GW next year.
The latest Central Electricity Authority data showed that the capacity addition till May accounted for 22% of the FY27 target of 7.3 GW. In FY26, India had added 9.47 GW of thermal capacity against the targeted 12.86 GW, reflecting continuing slippages in project execution.
The capacity addition in the current fiscal came entirely in May, while April saw no thermal capacity addition against 1.01 GW in April last year. Of the 10 thermal units targeted for commissioning in FY27, only two had been commissioned by May 31. These included Patratu STPP in Jharkhand and Yadadri TPS in Telangana, both of 800 MW each.
Skyrocketing Peak Demand
The pace of thermal addition assumes significance as India’s peak power demand touched 270.8 GW in May, surpassing 241 GW recorded in 2025. Union power minister Manohar Lal recently said peak demand had already reached 271 GW, while available capacity had grown to 284 GW.
“Our available capacity has grown up to 284 GW, which enables us to meet all types of demand. But with the accelerating pace of electrification, we must prepare for 300 GW peak demand next year,” the minister said at India Energy Storage Week 2026 on Wednesday.
Under-Construction Bottlenecks
Project delays continue to weigh on the sector. As of May 31, 32 thermal units with 43.36 GW capacity were under construction, while another 21.38 GW remained stranded, with work either on hold or unlikely to be commissioned. The private sector did not commission any thermal unit during April-May.
The data showed that two stranded central-sector plants were originally scheduled for commissioning in May 2020, while several private-sector thermal projects have faced delays since 2013. Delays in equipment supply from EPC companies and land acquisition issues continue to stall projects even as demand increases.
The government is targeting 97 GW of coal- and lignite-based capacity addition by 2034-35 to meet rising power demand. As of May 2026, India’s total installed power capacity stood at 542 GW, of which thermal capacity accounted for 251 GW.
While India has committed to achieving 500 GW renewable energy capacity by 2030, policymakers have reiterated that renewable energy alone cannot meet rising demand, keeping coal-based capacity central to grid reliability.