Indian Economy News

India set to register biggest jump in coal-fired power in a decade

  • IBEF
  • June 20, 2024

India is poised to significantly expand its coal power capacity this year, anticipating an addition of 15.4 gigawatts by March 2025, marking the largest annual increase in nearly a decade. Despite ambitious targets for clean energy, the country continues to grapple with surging electricity demand fuelled by robust economic growth and exacerbated by increasingly severe heat waves. Coal currently dominates India's electricity generation, accounting for approximately three-quarters of the total output, a reliance projected to persist for at least the next decade.

Over the past decade, India has made substantial strides in renewable energy, adding over 100 gigawatts of capacity, surpassing growth in thermal power generation. However, challenges in energy storage infrastructure hinder the expansion of environmentally friendly electricity. Battery storage remains prohibitively expensive in India's competitive power market, while pumped hydro projects, another potential solution, are still in the nascent stages of development. Progress in low-carbon alternatives such as large dams and nuclear plants has also materialized slowly.

Last year, India announced plans to bolster its coal-fired capacity by nearly 90 gigawatts by 2032, marking a significant revision from earlier projections. Approximately 28.5 gigawatts of coal power projects are under construction, with plans to award contracts for an additional 50 gigawatts over the next three years, according to sources familiar with the matter.

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