India turns to coal to meet energy demand

India is experiencing a significant decline in its hydropower production, with a 17% drop in fiscal 2024. This situation is exacerbated by falling water levels in the country’s major reservoirs, currently at 22% of their total capacity. These unfavorable climatic conditions, in particular the impact of El Niño, continue to weigh on the production of hydroelectric energy, reducing the contribution of this source to the national energy mix. As a result, the use of coal for electricity generation is increasing. The share of hydropower in India’s total power generation fell to 5.95% in April 2024 from 7.05% the previous year, while that of coal rose to 90.78%. according to the Central Electricity Authority.

Increase in coal imports

At the same time, India imported around 85 million tonnes of thermal coal in 2024, underscoring its growing dependence on imports to offset falling hydropower generation. Experts predict that this trend will continue, especially during the summer months, to meet the growing demand for energy. Despite efforts to increase domestic production, demand still exceeds supply. Government measures include directives for coastal power plants running on imported coal to operate at full capacity until mid-October, and for domestic coal-fired power plants to continue blending 6% imported coal until the end June.

Coal dominates the energy mix

Despite the Indian government’s commitments to achieving carbon neutrality by 2070 and increasing renewable energy infrastructure, the share of renewable energy in total electricity generation remains marginal. Currently, only 8.5% of electricity comes from renewable sources, compared to 80.63% from coal. In response to the growing demand for energy, the Federal Coal Department projects that the demand for coal for power generation will reach 1.16 billion tonnes per year by FY 2030. Additionally, India adds 27 GW of coal-fired power generation capacity and plans to reach 80 GW. GW of thermal capacity by 2032.

Economic and industrial impact

According to the International Energy Agency, India is one of the leading countries where industrial energy demand exceeds that of its peers. This increase is fueled by GDP growth, urbanization and growing demand for materials such as cement and steel. As a result, India’s energy demand is expected to exceed that of any other region in the world by 2050. The focus on increasing coal-fired generation capacity highlights the crucial importance of this fuel in the landscape Indian energy. This strategy, while necessary in the short term to meet growing demand, raises questions about India’s long-term sustainability goals. In short, India needs to balance meeting its immediate energy needs with its long-term commitments to environmental sustainability. This duality reflects the challenges the country faces in managing its energy transition.