Coal's Share in India's Power Generation Capacity Drops Below 50 Percent For 1st Time Since 1960s

The share of coal in India's total power generation capacity dipped below 50 percent in the first quarter of 2024, the first time since the 1960s. The latest POWERup quarterly report from the Institute for Energy Economics and Financial Analysis (IEEFA) showed that renewable energy accounted for 71.5 percent of the record 13,669 megawatts (MW) power generation capacity added by India in the first quarter (January-March) of this year. 

Coal’s share, including lignite, in India's total power generation capacity dropped below 50 percent for the first time since the 1960s. 

The report noted that the renewable energy trend is well ahead of India's target of achieving 50 percent cumulative power generation capacity from non-fossil fuel-based sources by 2030. 

The decline in coal's share of power generation capacity mirrors a global trend, with demand for coal in G7 countries hitting record lows in 2023, levels not seen since 1900. 

To accelerate the transition, G7 countries pledged last month to phase out all unabated coal power generation by 2035, building on their commitment to halt all construction of new coal-fired power plants. 

The term "unabated" generally refers to the continued use of coal, oil, and gas without efforts to curtail emissions.  

At the United Nations' COP28 climate change conference in December last year, world leaders reached a historic agreement to transition away from planet-warming fossil fuels and triple the global renewable energy capacity by 2030. 

According to the report, a record 69 gigawatts (GW) of renewable energy tenders were issued in India in the fiscal year (FY) 2023-24, surpassing the central government’s target of 50 GW per year. 

"After a downturn from 2019 to 2022 due to supply-chain issues and global price spikes brought on by the COVID-19 pandemic and Russia’s invasion of Ukraine, the market has rebounded and gone from strength to strength,” Vibhuti Garg, Director – South Asia, IEEFA, said. 

India has risen to third place in the world’s solar power generation rankings, trailing only China and the US, according to Ember’s fifth annual Global Electricity Review of 80 countries. 

Ranked ninth in 2015, India has now overtaken Japan, which, along with fellow G7 member Germany, has a persistently high demand for coal. 

Solar power generated a record 5.5 percent of global electricity in 2023, with India generating 5.8 percent of its electricity from solar last year. Solar remained the world's fastest-growing electricity source for the 19th consecutive year in 2023, adding more than twice as much new electricity worldwide as coal. 

India witnessed the world's fourth-largest increase in solar generation in 2023 (+18 terawatt hour or TWh), behind China (+156 TWh), the United States (+33 TWh), and Brazil (+22 TWh). Together, the top four solar growth countries accounted for 75 percent of growth in 2023. 

Solar's contribution to electricity generation in India surged from 0.5 percent in 2015 to 5.8 percent in 2023. 

According to the International Energy Agency's (IEA) "Net Zero Emissions" scenario, solar would make up 22 percent of global electricity generation by 2030. 

Given that electricity generation accounts for nearly half of India's annual carbon dioxide emissions (1.18 gigatonnes in 2023), accelerating the transition to cleaner generation sources is crucial for the country to meet both its developmental and climate goals. 

The IEA says tripling global renewable energy capacity and doubling energy efficiency are essential to limit the average temperature rise to 1.5 degrees Celsius, a political target set in 2015 to prevent further worsening of climate impacts. India is among the few countries aiming to triple renewable capacity by 2030.