Coal share in India’s electricity mix drops below 50% for the first time since 1966

Renewable energy accounted for 71.5% of the record 13,669 megawatts (MW) power generation capacity added by India in the first quarter (January-March 2024), while coal’s share (including lignite) of total power capacity dropped below 50% for the first time since the 1960s.

Mumbai: Coal’s share of total power generation capacity in India dropped below 50 per cent for the first time in several decades in the first quarter of 2024, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA).

Renewable energy accounted for 71.5 per cent of the record 13,669 megawatts (MW) power generation capacity added by India in the first quarter (January-March 2024), while coal’s share (including lignite) of total power capacity dropped below 50 per cent for the first time since the 1960s.

This is well ahead of the Government of India’s target to establish 50 per cent cumulative power generation capacity from non-fossil fuel-based sources by 2030, the report said.

The decline mirrors a global trend, with demand for coal in G7 countries plumbing record lows in 2023, levels not seen since 1900. To accelerate the transition, G7 countries last month vowed to phase out all unabated coal power generation by 2035, expanding on their commitment to end all construction of new coal-fired power plants.

As 2024 shapes as a pivotal year in the global transition away from fossil fuels, India is at the forefront, making great strides towards the target of Net Zero greenhouse gas emissions.

Large-scale renewable energy projects have been the focus of intense interest, as evidenced by tender issuances crossing a record 69 gigawatts (GW), according to the report, Utility-scale renewable energy tendering trends in India, released this week by IEEFA and JMK Research.

“After a slump 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,” says the report’s contributing author, Vibhuti Garg, Director-SouthAsia, IEEFA, in a press statement issued in Mumbai.

“There is strong investor interest in the Indian utility-scale renewable energy market. The primary reasons are the large-scale potential for market growth, central government support in terms of targets and regulatory frameworks, and higher operating margins,” Garg added.

“Solar power, in particular, is growing at an unprecedented pace. Our report concludes that the rapid growth in solar and wind has brought the world to a crucial turning point – likely this year – where fossil generation starts to decline at a global level,” said Aditya Lolla, Ember’s Asia Programme Director.

India, on the other hand, has been unable to shed its dependence on coal. Adverse weather conditions and surging power demand mean the country continues to rely on coal for over 70 per cent of its electricity generation. The situation is unlikely to change this year, with the Central Electricity Authority expecting a shortfall in hydropower, leading to power shortages, especially during the night when solar is offline.