Beyond Baseload: Reforming Thermal PPAs for India's energy transition

August 20, 2026

India's power sector is transitioning towards a renewable energy-driven future, fundamentally changing the operational role of coal-based thermal power plants. While coal is increasingly required to operate flexibly to complement renewable energy, the long-term Power Purchase Agreements (PPAs) governing these plants continue to reflect an era of baseload generation and power shortages. This growing disconnect has significant implications for consumer costs, operational efficiency and renewable energy integration. 

Through legal, regulatory and financial analysis, RTI-based research, and domestic and international case studies, this report examines how existing thermal PPAs contribute to long-term contractual lock-ins and identifies opportunities for reform. It analyses the economics of current PPA structures, evaluates pathways for renegotiation, and proposes a Thermal PPA Framework. The report argues that contractual certainty and adaptability are complementary, and that modernising thermal PPAs is essential to reduce avoidable system costs.

Building on the findings, the report evaluates legal pathways for reform, contractual restructuring, and concludes by proposing a Modernised Thermal PPA Framework with suggestive clauses and policy recommendations to better align future PPAs with India’s changing power system.

Collectively, the report aims to demonstrate that modernising thermal PPAs is not only essential for improving cost efficiency and facilitating RE integration, but also for ensuring long-term contractual arrangements remain aligned with India’s evolving electricity sector.

FOR FURTHER DETAILS AND INFORMATION, PLEASE CONTACT:

KUSHAGRA GOYAL
Senior Research Associate
Sustainable Industrialization Unit, CSE
kushagra_goyal@cseindia.org
+91 9799436833

PARTH KUMAR
Programme Manager
Sustainable Industrialization Unit, CSE
parthkumar@cseindia.org
+91 9839061000