Despite India’s ambitious net-zero targets and ongoing energy transition, coal production continues to play a crucial role in meeting the country’s growing electricity demand.
Data from the Central Electricity Authority (CEA) reveals a significant rise in thermal capacity additions during the current fiscal year (FY24), with 5.75 GW added compared to just 450 MW in the previous year. The executive summary for February 2024, released by the CEA, highlighted the installation of 2.78 GW of thermal power capacity during that month alone. This surge in capacity addition aligns with projections of record power demand anticipated during the upcoming summer months. The CEA estimates peak power demand to reach 260 GW in FY25, surpassing the 243 GW recorded in FY24. Despite the government’s ambitious renewable energy plans to mitigate carbon emissions, the coal shortage and near-crisis experienced in FY22 prompted increased investments in thermal power plants.
Coal-fired power plants remain the baseload for India’s power demand, providing the minimum required power at any given time. While renewable energy sources like solar and wind power are expanding, they often lack the stability of coal-fired plants and require utility-scale batteries for energy storage, which are currently limited in India. Several thermal plants were inaugurated in February ahead of the general elections, contributing to India’s coal-based power capacity, which stood at 210.96 GW by the end of the month. Furthermore, coal production and supply to power plants have improved, with current stock levels sufficient for approximately 17 days. As India continues to navigate its energy transition, the role of coal in meeting immediate energy demands remains significant. Balancing the expansion of renewable energy sources with the reliability of coal-fired power plants presents a complex challenge in achieving sustainable and reliable energy supply for the nation’s growing economy.
