RAJASTHAN, India - Inflexible coal power plants are limiting India's ability to tap its growing renewables capacity, even as coal-fired energy generation declined in 2025 for the first time in half a century except once during the COVID-19 pandemic.

The 3% drop, according to analysis by the Centre for Research on Energy and Clean Air, was primarily driven by a record increase in clean power generation, along with reduced air conditioning demand and a longer-term slowdown in power demand growth. The fall has been heralded as a potentially historic shift with implications for the carbon dioxide emissions that are contributing to extreme weather worldwide.

But coal plants' lack of flexibility -- reducing their output during solar hours to enable the integration of clean power, and quickly ramping up production after sundown when the renewable feed dips -- limited the extent of the fall, and came at a cost.

India lost 2.3 terawatt-hours of solar generation between May and December 2025 due to the need to curtail the energy source to preserve the integrity of the grid, according to a report by think tank Ember, a loss costing between 5.75 billion rupees ($62.7 million) and 6.9 billion rupees in compensation to solar generators.

"[The curtailment] served as a real-world stress test for a high-solar future," said Ruchita Shah, an energy analyst at Ember and the report's author.

Indeed, the issue is also weighing on India's ambitious climate goal of meeting half of its energy needs from renewables by 2030 -- the curtailed solar led to carbon dioxide emissions equivalent to the annual amount from 400,000 households, according to Ember. Despite renewable energy making up about half of the roughly 514 gigawatts of installed capacity, it contributes only 23% of the country's power needs.

"Most states are currently falling short of meeting their renewable purchase obligation targets," said Ashok Sreenivas, coordinator of the energy group at Prayas, a policy and research organization.

Far from renewable energy displacing coal power at large, "coal continues to be the predominant source of electricity in the country, with other power sources such as nuclear and hydro also playing a role," he said.

India's latest national grid code formalized the minimum load at 55%, meaning coal plants will typically run even when renewables are available but at a lower load, and be compensated for the number of hours when they aren't actively producing electricity.

Powering India by its vast renewable capacity hinges on existing coal plants running at 40% of their installed capacity during the day -- a goal the Central Electricity Authority hopes to achieve in phases by 2030, possibly backed with incentives beyond compensation -- but experts say this presents issues, including damage to boilers and turbines as well as reducing plant lifespans by a third or more.

"A coal power plant designed to operate at a certain baseload -- typically 55% to 60% -- doesn't perform efficiently at a lower load, and costs more to operate and maintain, even after retrofits," said Amol Kotwal, vice president of Frost & Sullivan's energy and environment growth advisory team.

Making a coal power plant more flexible involves upgrading the boiler combustion system; modifying pressure parts; installing air preheaters and economizers as well as a turbine auxiliary system; replacing or modifying fatigue prone components like valves, rotors and casings; and adapting the instrumentation and control system.

All of this "only makes sense if the plant has been kept in a reasonable condition," said Claudia Weise, project director of international affairs at VGBE Energy, a German association involved with a successful coal flexibilization pilot study at India's Maithon power plant in 2021.

Irrespective of the actual age of the plant, an assessment of the facility's lifetime is needed before starting the flexibilization process, in order to establish a baseline.

"Plants that have outlived their useful life, even if operationally sound, may not be able to pay back their flexibilization investment," said Ramandeep Singh, chief operating officer and head of the energy consulting practice at Mercados Energy Markets India. "Plants with assured offtake agreements in place will need capex-additional cost assessments, and revised tariffs to recover" that capital expenditure "where the investment is feasible."

With nearly a fifth of India's installed coal power capacity being older than 25 years, the accepted life of a plant, Singh pointed out that "a blanket minimum technical load norm for existing units may not be viable."

Still, the type of coal used can also make a difference in reducing loads. In Germany, plants frequently operate at loads of about 25%, but they use hard coal, which is superior to India's high-ash content coal.

"Indian coal plants are ignited with oil, and also fall back on oil when poorer quality coal causes system instability," Singh said. "Operating plants at a lower level will increase such dependency on oil and consequently increase costs."

While India enjoys 10% of the world's coal deposits, these plentiful reserves aren't necessarily a source of inexpensive power.

"It is increasingly questionable whether coal-based electricity is cheap," said Prayas' Sreenivas, explaining that, given the falling price of storage, fully dispatchable renewable energy is now often cheaper than power from new coal-based plants, costing 4 to 5 rupees per kilowatt-hour compared with 5 to 6 rupees.

Additionally, solar power with battery-based storage is hedged against inflation for 25 years, unlike coal-based power, he added.

As coal's role shifts to being more of a balancing resource, it could be 25% more expensive in the fiscal year beginning in April 2031 than in fiscal 2024, according to an analysis published by Ember in October.

Meanwhile, gas-based electricity is expensive in India because of the country's limited reserves, while the expansion of long-gestation and expensive nuclear energy has been sluggish so far, although recent reforms are intended to spur the growth of the latter sector.

Still, there has been a revival in capital expenditure on thermal power, encompassing coal, lignite, gas and diesel, according to Crisil Ratings, raising questions about whether the central government's present coal flexibilization strategy is built around the right incentives and compensation.

Duttatreya Das, an analyst with Ember, said that "compensations to operate at 55% minimum technical load have only led to centrally controlled coal plants with interstate operations being compelled to shoulder most of the flexibility burden, while state-based generators have remained unresponsive to flexibility needs."

"A compensatory-incentive-based market will not work -- India needs nothing short of a regulatory overhaul covering its entire coal fleet to tap its installed renewable energy," he said.