xIn 2023, the government ordered coal plants to reduce their minimum output to make room for solar power. But the order has been ignored, and the June 2026 deadline has now been pushed back by another year.
ET BureauWhile the government’s plan was to reduce the minimum operating level of coal plants, called minimum technical load, to 40% from 55%, thermal generators are pushing back citing higher costs and reduced plant life.
“There is still no clarity on compensation, even as costs are set to rise,” a senior NTPC official told ET on condition of anonymity. “Running plants at 40% load not only increases operational expenses but can cut plant life by nearly a third. Without a clear mechanism to recover these costs, generators have little incentive to comply.”
As renewable energy increasingly dictates grid behaviour, coal plants are being pushed to the margins. Plant load factors fell sharply to about 55% in 2023-24 from 85% in 2009-10 and are expected to decline further to 40%. Lower utilisation can erode returns on equity by 25-30% under regulated tariffs, while per-unit coal power costs rise as fixed expenses are spread over fewer units.