**Executive Summary:**
This document summarizes the Indian government's efforts to increase power generation capacity since 2014. It details the growth in installed capacity, steps taken to enhance transmission infrastructure, and measures to reduce the per-unit cost of power generation. The information includes data up to June 2025 and references initiatives and policies implemented since 2014.
**Key Points / Main Content:**
**Power Generation Capacity Increase:**
* Installed capacity increased from 248,554 MW in March 2014 to 484,819 MW in June 2025.
* Coal-based thermal power capacity increased from 139,663 MW to 242,040 MW.
* Renewable Energy (RE) capacity, including Large Hydro, increased from 75,519 MW to 233,999 MW.
**Infrastructure Enhancement:**
* Addition of 201,088 circuit kilometers (ckm) of transmission lines.
* Addition of 778,017 MVA of Transformation capacity.
* Addition of 82,790 MW of Inter-Regional capacity, enabling the transfer of 118,740 MW across the country.
* Construction of Green Energy Corridors and establishment of 13 Renewable Energy Management Centers.
* Construction of the Inter-State transmission system ahead of the generation capacity.
* Setting up of Ultra Mega Renewable Energy Parks to provide land and transmission to RE developers.
**Policy and Regulatory Measures:**
* Waiver of ISTS charges on transmission of electricity from Solar, Wind, Pumped Storage Plants, and Battery Energy Storage Systems.
* Implementation of Renewable Purchase Obligations (RPOs) and Energy Storage Obligations Trajectory until 2029-30.
* Introduction of the SHAKTI policy for transparent coal allocation to Thermal Power Plants.
* Measures to promote the Hydro Power Sector, including declaring Large Hydro Projects (25 MW) as Renewable Energy sources.
* Expansion of Budgetary support towards cost of enabling infrastructure of Hydro Power Projects.
**Cost Reduction Initiatives:**
* Setting up of Power Exchanges for electricity price discovery.
* Introduction of flexibility in domestic coal utilization by State/Central Generation Companies (GENCOs).
* Rationalization of linkage sources for GENCOs and Independent Power Producers (IPPs) to optimize transportation costs.
* Issuance of guidelines for tariff-based bidding for electricity procurement under Section 63 of the Electricity Act, 2003.
* Reduction of Aggregate Technical & Commercial (ATC) losses under RDSS.
* Operationalisation of National Merit Order Dispatch.
* Withdrawal of advisory for blending of imported coal from 16th October 2024 due to sustained supplies of domestic coal.
**Financial Improvements:**
* Reduction of ATC losses from 22.62% in 2013-14 to 16.28% in 2023-24.
* All current payments to GENCOs are up to date.
* Legacy dues of GENCOs reduced from Rs. 1,39,947 crore to Rs. 18,857 Crore.
* Average Power purchase cost has decreased by 5 Paisa between FY 2022-23 and FY 2023-24.
**Impact Analysis:**
**Power Generation Companies (GENCOs):**
* *Impact:* Benefit from policy support, transparent coal allocation, and reduced outstanding dues.
* *Action Required:* Utilize policy frameworks like SHAKTI for efficient coal allocation and participate in power exchanges.
**Distribution Licensees:**
* *Impact:* Benefit from competitive procurement of electricity through tariff-based bidding and reduced ATC losses.
* *Action Required:* Participate in tariff-based bidding processes and implement measures to reduce ATC losses.
**Renewable Energy Developers:**
* *Impact:* Benefit from waivers on ISTS charges, access to land and transmission infrastructure through Ultra Mega Renewable Energy Parks, and clear RPO targets.
* *Action Required:* Leverage policy support for renewable energy projects and contribute to meeting RPO targets.
**Consumers:**
* *Impact:* Expected to benefit from reduced per-unit cost of power generation and improved grid infrastructure.
* *Action Required:* N/A
Key Entities Referenced
Ministry of Power: The Indian government ministry responsible for power generation and distribution.
Shri Shripad Naik: Minister of State in the Ministry of Power.
Renewable Energy (RE): A source of energy that is not depleted when used, such as solar or wind power.
Renewable Purchase Obligations (RPOs): Requirement for obligated entities to purchase a certain percentage of electricity from renewable energy sources.
Green Energy Corridors: Infrastructure projects aimed at facilitating the transmission of renewable energy.
SHAKTI policy: Policy for transparent allocation of coal to Thermal Power plants.
Electricity Act, 2003: An act of the Parliament of India to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity.
Hydro Power Sector: The sector related to the generation of electricity from hydropower projects.
GOVERNMENT OF INDIA
MINISTRY OF POWER
LOK SABHA
UNSTARRED QUESTION NO.1912
ANSWERED ON 31.07.2025
PER UNIT COST OF POWER GENERATION
†1912. SHRI IMRAN MASOOD:
Will the Minister of POWER
be pleased to state:
(a) the total power generation capacity across the country since 2015, year-wise;
(b) the steps taken by the Union Government to increase power generation capacity
since 2014;
(c) whether the per unit cost of power generation has increased due to coal imports
during the last few years and if so, the details thereof; and
(d) the steps taken by the Government to reduce the per unit cost of power
generation?
A N S W E R
THE MINISTER OF STATE IN THE MINISTRY OF POWER
(SHRI SHRIPAD NAIK)
(a) : The year wise details of total power generation capacity in the country from 2014-
15 to 2025-26 (upto June, 2025) are given at Annexure.
(b) : Government of India has taken following steps to increase the power generation
capacity in the country since 2014:
(i) Increase in installed capacity from 2,48,554 MW in March 2014 to 4,84,819 MW in
June 2025 including increase in installed capacity of coal based thermal power
plants from 1,39,663 MW to 2,42,040 MW and Renewable Energy (RE) (including
Large Hydro) from 75,519 MW to 2,33,999 MW during this period.
(ii) Addition of 2,01,088 circuit kilometer (ckm) of transmission lines, 7,78,017 MVA of
Transformation capacity and 82,790 MW of Inter-Regional capacity with capability
of transferring 1,18,740 MW from one corner of the country to another.
(iii) Waiver of ISTS charges on transmission of electricity generated from Solar, Wind,
Pumped Storage Plants and Battery Energy Storage Systems.
……..2.- 2 -
(iv) Renewable Purchase Obligations (RPOs) and Energy Storage obligations Trajectory
till 2029-30.
(v) Construction of Green Energy Corridors and putting in place 13 Renewable Energy
Management Centres.
(vi) Setting up of Ultra Mega Renewable Energy Parks to provide land and transmission
to RE developers for installation of RE projects at large scale.
(vii) Reduction of AT&C losses from 22.62% in 2013-14 to 16.28 % in 2023-24. All current
payment of GENCOs are up-to-date and the legacy dues of GENCOs have come
down from Rs. 1,39,947 crore to Rs. 18,857 Crore.
(viii) In 2019, Government announced measures to promote Hydro Power Sector such as
Declaring Large Hydro Projects (> 25 MW) as Renewable Energy source, Tariff
rationalization measures for bringing down hydropower tariff, Budgetary Support
for Flood moderation / Storage Hydro Electric Projects (HEPs), Budgetary Support
towards Cost of Enabling Infrastructure i.e., roads / bridges, etc. The scope of
Budgetary support towards cost of enabling infrastructure has been subsequently
expanded on 08.10.2024 to include : (a) Transmission line upto nearest pooling
point including upgradation of pooling sub-stations, (b) Railway sidings, (c)
Communication infrastructure, and (d) Rope ways.
(ix) Introduction of SHAKTI policy for transparent allocation of coal to Thermal Power
plants. This enabled efficient domestic coal allocation to Thermal Power Plants
and also ensured revival of various stressed Thermal Power Projects.
(x) Construction of the Inter-State transmission system ahead of the generation
capacity.
(c): The cost of generation of electricity from coal based power plant is dependent upon
the price of coal and cost of freights and in case of blending also the price of the blended
imported coal. The price of imported coal is linked with International Indices, source of
origin and factors like ocean freight, insurance etc. which vary with international demand
supply scenario. Further, every generating company consumes imported coal as per its
requirement.
With sustained supplies of domestic coal to Domestic Coal Based (DCB) plants, the
advisory for blending of imported coal has been withdrawn from 16th October, 2024.
Average Power purchase cost has decreased by 5 Paisa between FY 2022-23 and
FY 2023-24.
…..…3.- 3 -
(d): Government of India have taken following steps to reduce the cost of power
generation in the county:
(i) Setting up of Power Exchanges to ensure fair, neutral, efficient and robust
electricity price discovery.
(ii) Introduction of flexibility in utilization of domestic coal by State/Central
Generation Companies (GENCOs).
(iii) Rationalization of linkage sources of State/Central Generating Companies
(GENCOs) and Independent Power Producers (IPPs) with a view to optimize
transportation cost.
(iv) Issuance of guidelines for tariff based bidding process for procurement of
electricity under Section 63 of Electricity Act, 2003 to promote competitive
procurement of electricity by distribution licensees.
(v) Reduction of Aggregate Technical & Commercial (AT&C) losses under RDSS will
improve the finances of the utilities, which will enable them to better maintain
the system and buy power as per requirements; benefitting the consumers.
(vi) The operationalisation of National Merit Order Dispatch with the objective of
lowering the cost of electricity to consumers.
*************ANNEXURE
ANNEXURE REFERRED IN REPLY TO PART (a) OF UNSTARRED QUESTION
NO. 1912 ANSWERED IN THE LOK SABHA ON 31.07.2025
*************
The year wise details of total power generation capacity in the country from 2014-
15 to 2025-26 (upto June 2025):
Year (as on 31st March) Installed Capacity (in MW)
2014-15 2,75,895
2015-16 3,06,330
2016-17 3,28,146
2017-18 3,45,631
2018-19 3,57,871
2019-20 3,71,334
2020-21 3,83,521
2021-22 3,99,497
2022-23 4,16,059
2023-24 4,41,970
2024-25 4,75,212
2025-26 (upto June, 2025) 4,84,819
*****************