According to the most recent report by the Lok Sabha’s Standing Committee, the government plans to build 3.3 GW of hydro capacity, 2.2 GW of nuclear capacity, and 6.5 GW of thermal capacity in FY26.
By January 31, just 1.4 GW of thermal power had been added, compared to the FY25 target of 15.4 GW, and only 40 megawatts (MW) of hydro capacity had been installed, compared to a target of 1.7 GW, the committee found.
In FY24, the nation only installed 5.4 GW of thermal capacity, falling short of the objective of 14.7 GW. Likewise, hydro capacity additions were only 60 MW, far short of the 2.8 GW goal. Thermal power plant commissioning was delayed by a shortage of Balance of Plant vendors and EPC (engineering, procurement, and construction) contractors, according to the ministry.
“Gencos mostly pursue EPC contracts. The two bidders taking part as EPC contractors are BHEL and L&T. “L&T is not submitting its bids in the recent tenders, and utilities are receiving essentially single bids only,” the government stated.
To keep up with the nation’s rapidly increasing demand for power, the government has set a goal to install 80 GW of extra thermal capacity by 2031–2022. Policymakers have reaffirmed that renewable energy cannot satisfy the growing electricity demand, even though India has pledged to reach 500 GW of renewable energy capacity by 2030.
Power demand is predicted to increase further with the arrival of summer, possibly surpassing the previous peak of 250 GW in 2024.
According to Ghanshyam Prasad, chairperson of the Central Electricity Authority, India’s peak power demand, which has been increasing at a compound annual growth rate (CAGR) of 6%, is now expected to accelerate to 7% CAGR over the next five years due to increased industrial expansion and economic activity. The government anticipates a peak power consumption of 270 GW this year.