New Delhi (Economy India): Adani Power Ltd, India’s largest private-sector thermal power producer, has significantly raised its long-term installed capacity target to 41.87 gigawatts (GW) by FY 2031–32, outlining an aggressive expansion roadmap backed by a planned capital expenditure of nearly Rs 2 lakh crore. The move comes amid rapidly rising electricity demand, industrial expansion, urbanisation, and the government’s push to ensure round-the-clock power availability across the country.
Sources familiar with the development said the revised target reflects Adani Power’s strategic response to India’s accelerating power consumption, driven by manufacturing growth, electrification of transport, data centres, digital infrastructure, and expanding residential demand.
Scaling Up to Match India’s Power Demand Growth
India’s electricity demand has been growing at an average rate of 6–7 per cent annually, one of the fastest among major global economies. Peak power demand crossed 250 GW in 2024, and policymakers expect it to rise sharply over the next decade as India targets becoming a $5 trillion economy.
Against this backdrop, Adani Power’s expansion plan aims to add significant baseload capacity to the national grid, ensuring stability as renewable energy penetration rises. While solar and wind capacity are expanding rapidly, thermal power continues to play a critical role in grid balancing and meeting peak demand.
“India will require reliable, dispatchable power to support industrial growth and urban consumption. Thermal power will remain an essential component of the energy mix even as renewables scale up,” a senior industry executive said.
Investment Plan: Rs 2 Lakh Crore Capex Roadmap
The proposed Rs 2 lakh crore investment will be deployed across:
- Greenfield and brownfield thermal power projects
- Capacity expansion at existing plants
- Upgradation of technology for higher efficiency and lower emissions
- Fuel security infrastructure and logistics
- Environmental compliance and sustainability measures
The investment is expected to be spread over multiple phases through FY32, aligned with demand visibility, regulatory approvals, and fuel availability.
Adani Power currently operates a generation capacity of over 15 GW, with plants located across Gujarat, Maharashtra, Rajasthan, Karnataka, Chhattisgarh, Madhya Pradesh, and Jharkhand. The company also operates ultra-supercritical units, which offer higher efficiency and lower emissions per unit of electricity generated.
Focus on High-Efficiency Thermal Technology
Industry experts note that Adani Power’s expansion strategy is increasingly centred on high-efficiency, low-emission thermal technologies, including ultra-supercritical and advanced supercritical units. These plants consume less coal per unit of electricity and significantly reduce carbon intensity compared to older subcritical units.
The company is also expected to invest in:
- Flue gas desulphurisation (FGD) systems
- Advanced emission control technologies
- Water-efficient cooling systems
- Digital monitoring and predictive maintenance
Such measures align with tightening environmental norms and India’s broader climate commitments, even as thermal power continues to anchor grid reliability.
Supporting Industrial and Manufacturing Growth
India’s push for manufacturing-led growth under initiatives such as Make in India, Production-Linked Incentive (PLI) schemes, and the expansion of industrial corridors has sharply increased demand for uninterrupted power supply.
Heavy industries such as steel, cement, aluminium, chemicals, data centres, and electric vehicle manufacturing require stable baseload power—something thermal plants are uniquely positioned to provide at scale.
“Manufacturing competitiveness depends heavily on power availability and cost. Large thermal plants provide the backbone needed to support industrial growth, especially in emerging manufacturing clusters,” an energy policy analyst said.
Fuel Security and Supply Chain Integration
Fuel availability remains a critical factor in thermal power expansion. Adani Power benefits from the broader Adani Group’s integrated presence in coal mining, ports, logistics, and transportation, enabling relatively secure fuel sourcing and cost optimisation.
The company sources coal from:
- Domestic coal linkages
- Captive mines
- Imported coal through long-term arrangements
Logistics integration through group ports and rail infrastructure helps reduce supply disruptions and operational volatility.
Financial Strength and Balance Sheet Improvement
Adani Power’s expansion plans come at a time when the company has significantly strengthened its balance sheet. Over the past few years, the company has focused on:
- Debt reduction
- Improved cash flows
- Long-term power purchase agreements (PPAs)
- Resolution and acquisition of stressed power assets
Analysts point out that improved plant utilisation rates (PLFs) and rising power demand have enhanced the company’s earnings visibility, enabling it to undertake large-scale investments with greater confidence.
Thermal Power’s Role in India’s Energy Transition
While India has committed to achieving 500 GW of non-fossil fuel capacity by 2030, policymakers consistently emphasise that thermal power will remain a vital part of the energy mix during the transition period.
Renewable energy sources such as solar and wind are inherently intermittent, making reliable baseload generation crucial to prevent grid instability. Thermal power plants provide that stability, especially during peak demand hours and low renewable generation periods.
“Energy transition does not mean abandoning thermal power overnight. It means making thermal generation cleaner, more efficient, and more reliable while scaling renewables,” a senior power sector official said.
Regional Development and Employment Generation
The planned expansion is also expected to generate significant employment opportunities, both directly and indirectly. Construction, operations, maintenance, logistics, and allied services around power plants create thousands of jobs, particularly in semi-urban and rural areas.
States hosting Adani Power’s projects stand to benefit from:
- Infrastructure development
- Local employment
- Improved power availability
- Ancillary industrial growth
Several state governments are reportedly in discussions with the company regarding land allocation, infrastructure support, and project clearances.
Challenges and Regulatory Landscape
Despite strong demand prospects, the thermal power sector faces challenges, including:
- Environmental clearances
- Fuel price volatility
- Long gestation periods
- Regulatory approvals
- Community and land acquisition issues
However, recent policy measures by the central government—such as faster clearances, payment security mechanisms, and reforms in the power distribution sector—are aimed at improving investment sentiment.
The government has also repeatedly highlighted the need for new thermal capacity additions to avoid future power shortages, particularly during extreme weather events and demand spikes.
A Strategic Bet on India’s Growth Story
Adani Power’s decision to raise its capacity target to nearly 42 GW signals a strong vote of confidence in India’s long-term economic and electricity demand growth. As the country urbanises, digitises, and industrialises at scale, power consumption is expected to rise steadily over the next decade.
For Adani Power, the expansion represents a strategic bet on:
- India’s manufacturing-led growth
- Rising household electricity usage
- Data centre and digital infrastructure expansion
- Electric mobility adoption
- Infrastructure and urban development
If executed as planned, the investment could significantly reshape India’s thermal power landscape and reinforce the company’s position as a key player in the country’s energy ecosystem.
(Economy India)
