Abstract Coal-fired power plants are commonly used as adjustable power sources to complement the fluctuating output of wind and solar energy. The investigation is required to determine the flexible peak-shaving capabilities of coal-fired boilers. A modified scheme for a lignite-fired power plant to further improve the primary air temperature using the outlet steam from the low-temperature reheater is studied while increasing the inlet flue gas temperature of the air preheater is considered the conventional scheme. Thermodynamic models of the power plant are constructed using ebsilon software. The operational characteristics of both schemes are compared under 30% turbine heat acceptance (THA)–100%THA conditions and the economic performance of the modified scheme is also evaluated. Results indicate that the modified scheme exhibits superior thermodynamic and economic performances compared to the conventional scheme. The disparity in power generation efficiency between the conventional and modified schemes reaches a maximum of 0.23 percentage points under 75%THA conditions. The net present value of the modified scheme amounts to 4.51 million dollars over the power plant lifespan of 30 years. The modified scheme allows the conventional denitrification catalyst to maintain an optimal temperature range even under 30%THA conditions, resulting in a power generation efficiency only 4.8 percentage points lower than that under 100%THA conditions, thus demonstrating remarkable operational flexibility. This study presents an efficient, cost-effective, and adaptable approach for lignite-fired power plants.