NTPC Ltd’s latest results reveal how a shift towards renewables is reshaping the economics of thermal power, with fixed charges underpinning profits despite declining energy sales, and highlighting the sector’s evolving role in India’s energy landscape.
NTPC Ltd’s latest results underline how India’s shift towards renewables is reshaping the economics of thermal power. At the state-owned generator’s annual general meeting on Thursday, chairman and managing director Gurdeep Singh said the company’s profit growth has been lifted by fixed charges from its coal and gas plants, which are paid for remaining available to the grid even when output falls. “We generate as per the requirement of the grid. The profit comes from fixed charges,” Singh said, adding that revenue comes from a mix of fixed charges and energy charges, the latter including fuel costs.
That model helps explain why NTPC’s earnings have risen faster than its top line in recent years. The company’s total income slipped 0.56% to Rs 1,89,798.56 crore in 2025-26, while profit after tax increased 15% to Rs 27,545.76 crore. The pattern has held across the past three years, except for 2022-23: in 2023-24, income rose 1.79% while profit climbed 24.6%; in 2024-25, income increased 5.35% and profit advanced 12.29%. The company’s latest chairman’s statement and other recent reporting also point to continued expansion, with NTPC adding a record 9.6 GW of capacity in FY26 and lifting installed capacity to about 89 GW, more than double its FY14 level.
The broader significance is that rising renewable generation does not remove the need for thermal backup. During daylight hours and other periods of strong solar or wind output, coal plants are expected to cut generation, but they can still earn fixed capacity payments so long as they remain available. That is a growing benefit for generators such as NTPC, but it also leaves distribution companies with a harder balancing act: they must pay to keep thermal capacity on hand for times when renewable supply weakens, even if they draw less electricity from it.
India’s coal fleet is therefore being pushed towards greater flexibility. The Central Electricity Authority has outlined a phased plan for thermal plants to operate at 40% of minimum technical load by 2030, down from a higher floor that many in the industry say is necessary to protect equipment from strain. Recent reporting on NTPC’s operations suggests the company is still benefiting from strong demand as it expands into battery storage, pumped storage and renewable energy, but the underlying tariff structure remains a pressure point for distribution companies. The Central Electricity Authority has warned that fixed costs make up a large share of a utility’s annual revenue requirement, while fixed charges recovered from consumers cover only a fraction of that burden, leaving most utilities exposed when power sales slow.
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