A major coal-fired capacity expansion planned by India’s largest power utility faces increasing uncertainty as regulatory reviews and logistical hurdles threaten its realisation, highlighting broader challenges in meeting energy and sustainability goals within traditional baseload infrastructure. The proposed 1,320 MW expansion at the Chhabra Thermal Power Plant in Baran district, Rajasthan — backed by a preliminary agreement between NTPC Ltd and the Rajasthan state power utility — is now at risk of being cancelled after critical scrutiny by energy regulators.
Initially framed as a near-₹15,000 crore investment to add two supercritical coal units, the Chhabra expansion has been under review by the Energy Assessment Committee (EAC), which has raised red flags about unresolved statutory clearances, fuel supply frameworks and coal logistics arrangements. Officials are increasingly wary of treating Memoranda of Understanding (MoUs) — expression-of-intent documents — as binding commitments when assessing future grid capacity and resource adequacy. The EAC’s position underscores a nuanced shift in India’s energy planning: agencies are demanding that large coal-based projects demonstrate clear techno-economic feasibility, regulatory compliance and secure fuel linkages before being factored into capacity forecasts. In Chhabra’s case, the partnership between NTPC and Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUNL) has dragged on for years without meeting these milestones, prompting suggestions that the MoU could be formally rescinded.
For urban and industrial stakeholders dependent on reliable electricity, the potential scale-back of Chhabra’s expansion presents a strategic inflection point. Rajasthan’s power system has historically relied on thermal capacity to deliver baseload output, even as the state pushes ahead with renewable energy targets. The uncertainty around Chhabra complicates short- and medium-term planning for dispatchable generation, especially in peri-urban and industrial corridors where peak demand continues to rise. Critics say that unresolved coal logistics — including the absence of assured domestic coal linkage or transportation solutions — erode investor confidence in thermal projects of this scale. Ensuring coal supply is essential not just for operational continuity but also for meeting cost projections and securing purchasing agreements with distribution utilities. The lack of clarity on fuel transfer arrangements weakened the case for fast-tracking approvals.
Beyond logistics, the Chhabra expansion’s regulatory hurdles reflect broader governance issues in India’s power infrastructure rollout. As states adopt tighter environmental and land-use norms, project proponents are finding it more complex to align development timelines with compliance expectations. Energy planners emphasise that thermal projects must increasingly demonstrate not only economic viability but also adherence to evolving environmental and social standards. The potential cancellation of the Chhabra MoU comes at a time when India is balancing energy security with ambitious decarbonisation commitments. NTPC’s broader strategy includes expanding renewable capacity and exploring cleaner technologies, even as coal remains a significant part of its portfolio. Observers note that decisions on large thermal projects will be a litmus test for how traditional power infrastructure adapts to changing policy landscapes.
As regulators and utilities grapple with the next steps, the industry will be watching closely whether Chhabra’s fate signals a shift in how coal-based projects are assessed and executed in the context of India’s energy transition
