India delays flexible coal plan as costs, grid constraints cloud solar integration

India has delayed by a year its plan to make coal-fired power plants operate more flexibly during periods of high solar generation, as authorities work out how to compensate utilities for the costs of retrofitting and maintenance, according to government documents reviewed by Reuters.

The so-called “flexible coal” plan would require plants to lower their minimum operating level to 40% from 55% to better accommodate rising solar output. However, officials have yet to finalize rules on compensating generators for the added costs and potential operational risks, prompting the delay.

The move comes as India grapples with growing curtailment of solar power due to limited grid flexibility and inadequate transmission infrastructure. Analysts warn that without sufficient flexibility in coal generation, the country risks wasting renewable energy, increasing compensation costs for curtailed solar producers and raising emissions from continued coal use.

Energy think tank Ember estimates solar developers asked to cut output because coal plants could not ramp down may be owed as much as $76 million in compensation for the eight months to December, costs that are ultimately passed on to consumers.

Coal remains central to India’s power mix, accounting for around 60% of generation, even as the country rapidly expands renewable capacity and targets a major increase in solar installations over the coming decade. The government is seeking to balance grid reliability with the need to integrate more clean energy into the system.

Read also : India sees no need to raise coal prices as output outpaces demand, minister says

Industry concerns have also weighed on the plan. State-run generator NTPC Limited has warned that operating plants at lower loads could accelerate wear and tear on critical equipment, calling for further studies before implementation.

Officials from the power ministry, the Central Electricity Authority and industry stakeholders have agreed to further assess the technical and financial impacts of the plan based on updated cost estimates. The regulator has yet to approve proposed increases in maintenance costs, citing limited operational data.

Retrofitting coal plants to run more flexibly could raise tariffs by 0.28 to 0.60 rupees per kilowatt-hour, according to the Central Electricity Authority, significantly cheaper than battery storage, which costs around 5.76 to 6.04 rupees per kWh.

India’s approach remains less aggressive than that of China, which has already lowered minimum coal plant utilization rates to as low as 25% in some cases to support renewable integration.

Analysts say the delay highlights broader challenges in transitioning large coal-dependent power systems, where insufficient flexibility could become a key bottleneck to scaling up renewable energy.

Editing by Reiner Simanjuntak