India eyes flexible coal generation to unlock full potential of solar power

December 6, 2025

India is preparing a major reshaping of its energy strategy that would allow coal-based power plants to operate at lower loads to make more room for solar energy in the national power mix. The move signals a significant shift in the way the country balances its traditional energy sources with fast-growing renewable capacity.
According to officials familiar with the plan, the Ministry of Power is working on guidelines that would require coal-fired plants to upgrade systems, run at reduced capacity when needed, and increase the flexibility of their operations. The proposal, once finalised, is expected to help the grid accommodate more renewable electricity without wasting it due to curtailment or lack of demand synchronisation.
India has greatly expanded solar and wind power in the last decade and is now among the world’s largest renewable energy producers. However, a growing challenge has emerged: not all clean power generated can be absorbed by the grid at the time it is produced. With large-scale battery storage still expensive and limited, much of the unused energy during peak solar hours is lost. Coal plants, which currently provide steady baseload electricity, are unable to sharply reduce or increase output to match renewable fluctuations.The new plan aims to address this gap. By allowing coal plants to operate even at load factors as low as 40 percent, the grid would have more flexibility to tap solar energy whenever available. This would represent a structural shift, as coal plants traditionally run most efficiently at higher loads and are not designed to stay operational while generating less power.
To support the transition, the government is likely to ask power producers to set aside financial resources for plant upgrades, equipment modernisation and enhanced maintenance requirements. Operating at lower loads increases wear and tear, which means more frequent servicing and software calibration will be needed. The proposals under discussion include a 20 percent increase in maintenance budgets and incentive-based mechanisms for plants that adopt the system effectively.The additional cost burden would only be passed on to consumers after approval by a tariff-setting regulator. Officials and analysts view this as a calculated trade-off, in which short-term financial adjustments help accelerate long-term renewable expansion and sustainable energy security.Experts say India would not be alone in using flexible fossil-fuel generation to support renewables. In 2023, China announced a mechanism to compensate coal plants that remained idle for longer durations for the sake of grid stability and renewable integration.