India’s expanding coal use in the power sector matches its growing energy demand and need to provide energy services and energy access for development. With expected expansion in population, rapid urbanization, and economic development, energy demand is expected to increase by 5% per year until 2040.
India’s energy policies aim to facilitate the large-scale development of electricity generation capacity, while diversifying power generation sources, strengthening energy infrastructure, and improving energy access. Although coal will continue to power the country in the near term, recent record low solar and wind prices put significant competitive pressure on coal-fired power.
In parallel, coal continues to face increased costs due to stricter environmental regulations, land acquisition expenses, water stress, high maintenance costs of older plants, and growing reliance on imports for higher quality coal.
Furthermore, India’s global climate commitments and renewable energy goals, in addition to domestic concerns over worsening air pollution and environmental degradation may deter increased coal use.