India is considering incentives for thermal power plants to encourage greater flexibility in power generation, as policymakers look to create more headroom for renewable energy while maintaining grid stability.With record additions in renewable capacity, authorities have noted oscillations in the grid due to the variable nature of solar and wind power. Chairperson of the Central Electricity Authority (CEA), Ghanshyam Prasad, said absorption of renewable power has also faced challenges due to weaker-than-expected demand last year. Persistent rains between April and October 2025 kept peak demand at 245 GW, lower than the earlier projection of 270 GW.
Speaking at FICCI’s India Energy Transition Summit, Prasad said thermal plants are often reluctant to reduce their Plant Load Factor (PLF) from 55% to 40% over efficiency concerns. However, he noted that greater operational flexibility is technically feasible with procedural changes, enabling higher renewable integration during periods of strong solar and wind output. A scheme to incentivise such flexibility has been recommended to the Ministry of Power.
He also stressed adherence to grid standards, citing instances where oscillations originating in Rajasthan were felt as far as Kudankulam. State commissions, he said, are yet to adopt compensation principles laid down by the CERC.On reforms, Prasad indicated that the 2005 Electricity Policy is due for revision by mid-2026, alongside the expected passage of the Electricity Bill. He added that renewable additions have surged, with 52 GW installed in the first ten months of the financial year, and another 10–15 GW likely in the final two months. However, he cautioned that adding capacity without matching demand or transmission infrastructure could recreate past imbalances.
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