With Power Demand Rising, India Will Keep Depending On Coal

With a focus on economic growth and energy security, the use of coal in India will increase further in the coming years even as the share of green and sustainable energy has steadily risen in the last few years.

“The reduction in coal usage and its dependence cannot be brought down abruptly,” Arun Goyal, former Member, Central Electricity Regulatory Commission, who also served as Secretary in the Cabinet Secretariat said.

“While we are increasing our renewable energy, storage of the same and its integration need to be addressed. Phasing of coal has to a gradual process and done with extreme care,” Goyal said, adding that renewable energy — from wind, solar, biomass, etc — alone will not be sufficient in meeting the rising energy demand.

“It needs to be a well thought out process so that there are no disruptions,” Goyal told The Secretariat.

India has a stiff target of touching Net Zero carbon emissions by 2070. Sources said that while the government is keen on aggressively expanding the installation and share of renewables, it is not willing to do anything that could disrupt economic activities.

About 70 per cent of power generation in the country is coal-based. However, with the steady rise in installation of renewables, the share of coal in the total energy basket is set to come down.

India’s power demand rose to 250 GW in 2024. Driven by economic activities, population growth, rise in overall income levels and climate changes along with intense summers, India’s power demand is expected to steadily rise in the coming years.

The International Energy Agency (IEA) too said that the unprecedented surge in electricity demand is due to the extreme heatwaves as well as strong growth in industrial and residential power consumption.

India’s Coal Production Up

According to official data released earlier this month, India managed to increase coal production by almost 5 per cent in 2024-25. Coal production touched around 1047.57 MT in the just concluded financial year, compared to 997.83 MT in 2023-24.

Meanwhile, in the 12th round of commercial coal mine auctions, the government put up 25 mines up for bidding.

The coal sector is also a key source of employment. According to government data, coal-producing PSUs like Coal India Limited, its subsidiaries and NLC India Limited, together provide employment to more than 3,69,000 people. Additionally, the sector supports approximately 3.1 lakh pensioners, underlining its significant impact on livelihoods and social welfare.

CIL, along with subsidiaries, have also gone on a recruitment drive, hiring 59,681 employees from 2014 to February 2024.

An EY report noted that coal not only remains key to India’s energy strategy, but also makes significant contributions to employment generation, boosting government revenues, etc.

China has the largest number of operational coal power plants. India ranks second. It is not just India that witnessed a growth in demand for coal. Globally the demand for coal, considered to be the single largest source of carbon emissions, has risen amid uncertainties.

Incidentally, in 2021, India, at the Conference of Paris (COP) 26, managed to alter the final wordings of the agreement to "phase down" instead of phase out.

The IEA estimated the global demand of coal to have touched 8.77 billion tonnes in 2024.