India’s Power Ministry Pushes for Lower Electricity Costs for Consumers

India’s power ministry has called on electricity utilities to reduce supply costs to ease the financial burden on consumers. Officials have highlighted the need for timely coal procurement, improved capacity planning and increased integration of renewable energy.

The move comes amid concerns over high industrial power tariffs and delayed clean energy adoption by state power distributors.

Government Urges Cost Optimisation by Utilities

A senior power ministry official stated that electricity providers must focus on making power supply more affordable. Utilities have been advised to secure coal supplies when prices are lower and plan coal-based and renewable capacity additions independently and on schedule.

Currently, capacity planning for new coal power plants is largely undertaken by the Central Electricity Authority. However, the ministry has indicated that states should play a greater role in shaping these plans to better align supply decisions with local demand needs.

Industrial Power Tariffs Remain High

The power ministry noted that India’s industrial electricity tariffs remain relatively elevated at around $95 per megawatt hour. This compares with lower average costs in countries such as China, Vietnam, Thailand and the United States, where tariffs range between $60 and $80 per megawatt hour.

Officials indicated that reducing these costs is important to maintain industrial competitiveness and support broader economic growth.

Focus on Renewable Energy Integration

The ministry emphasised that integrating lower-cost renewable energy into the power mix could help reduce overall supply costs. Renewables were described as an area of opportunity for power distributors seeking to manage expenses more effectively.

However, state power distribution companies have shown reluctance in signing long-term clean energy contracts, instead relying on costlier coal-based power. As a result, nearly 45 gigawatts of clean energy capacity remains unsold, with distributors delaying purchases in anticipation of further price reductions.

Transmission Costs Also Under Review

Officials also raised concerns about the rising cost of inter-state power transmission. The government is considering removing existing waivers on transmission charges, including the full waiver currently extended to electricity storage projects until June 2028.

Any changes to transmission pricing could influence future investment and operational decisions across the power sector.

Read More: Waaree Energies Reports 26% Rise in Q3 FY26 Net Profit; Shares Jump 10% in Early Trade.

Conclusion

The power ministry’s push for cost optimisation reflects growing attention on electricity affordability and efficiency in India’s energy sector. How utilities respond through procurement strategies, capacity planning and renewable integration will shape power pricing trends in the period ahead.

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