India’s coal-fired electricity generation saw its steepest decline in five years this May, signalling a possible structural shift in the country’s energy profile.
With overall power demand easing and renewable output touching record highs, fossil fuel reliance across the grid has begun to wane—potentially paving the way for a more sustainable electricity mix.Data from the federal grid operator reveals that coal-powered electricity dropped by 9.5% year-on-year in May, totalling 113.3 billion kilowatt-hours. This marks the sharpest drop since the lockdown-hit summer of 2020. The broader electricity output also contracted by 5.3%, as demand cooled amid unseasonably mild temperatures and sluggish industrial activity.
The subdued consumption patterns come against the backdrop of rising generation from cleaner sources. Renewable energy, in particular, surged 17.2% year-on-year to a historic high of 24.7 billion kilowatt-hours, boosting its contribution to 15.4% of the national power mix—the highest share recorded since 2018. Hydropower too expanded 8.3%, while nuclear energy remained stable. The combined effect was a 3.3 percentage point decline in coal’s share of the power mix, which now stands at 70.7%, its lowest since June 2022.
Natural gas-based power saw the sharpest contraction, plummeting 46.5%—its most significant year-on-year decline since October 2022. Experts attribute this to high gas prices and limited competitiveness against solar and hydro, particularly when peak demand is moderate.Energy analysts point to two major shifts underpinning the data: rising renewable supply on one hand, and softened demand from both residential cooling and energy-intensive industries on the other. “Utilities are exercising caution. With elevated LNG prices and ample coal inventories, there is less incentive to source expensive gas,” said Prashant Vashisth, Vice President at ratings agency ICRA.
Compounding the trend is the economic deceleration across non-power industries, a key driver of base load electricity demand. India, while still heavily reliant on coal, appears to be entering a more diversified phase in its power strategy—where cleaner, decentralised, and climate-friendly options can stabilise grid reliability without overwhelming emissions targets.This development could offer some relief to India’s climate ambitions. As the world’s third-largest emitter, India has long argued its right to leverage coal to power growth, citing its relatively low per capita emissions. But the continued growth of renewable capacity—and moments like May’s record—underscore that the grid is capable of adapting to a cleaner energy architecture, if supported by policy alignment and investment in flexibility.
While short-term trends do not guarantee permanent shifts, the May data highlights how weather variability, economics, and evolving energy markets are converging. Whether this leads to a consistent dip in coal reliance or merely a seasonal fluctuation will depend on how India manages demand spikes during hotter months and navigates long-term energy transitions.
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