India Can Avoid New Coal as Renewables Surge: CREA

India Can Avoid New Coal as Renewables Surge: CREA

India may not need to build new coal power plants to meet future electricity demand, thanks to record growth in renewables and underutilised thermal capacity, a new report by the Centre for Research on Energy and Clean Air (CREA) said Thursday.

According to CREA, 32.3 gigawatts (GW) of coal-fired capacity is currently under construction, and another 23.55 GW is classified as stressed. If all these projects are completed, India’s coal capacity would rise to 271 GW—exceeding projected requirements. The findings suggest that both existing and in-progress plants are sufficient to meet demand growth.

Electricity Demand 

Electricity demand reached 230 GW on 60 days during FY2024–25, up from zero such days in the previous fiscal year. Meanwhile, days with demand below 200 GW fell to 37 from 116. Despite these increases, the report noted that India’s generation fleet—including renewables and flexible sources—remains well within operational capacity.

On May 30, India recorded its highest-ever power demand at 250 GW, during solar hours, with only a marginal shortage of 0.1 GW. Just 188.24 GW of thermal capacity was available, as much of the coal fleet was offline for maintenance or due to outages. Solar output, which exceeded 60 GW, played a key role in balancing the grid.

India’s total installed capacity has now surpassed 475 GW. While coal remains the backbone of the power sector, a surge in solar and wind installations—alongside hydro and nuclear—has started to shift the energy mix.

Peak Demand 

Peak demand is increasingly met during daylight hours. In FY2023–24, 305 of 366 days saw daily peaks during solar hours; in FY2024–25, that figure stood at 256 of 365 days. Non-solar hour peak demand rose from 210.64 GW to 224.18 GW—still within manageable limits.

India’s renewable capacity of around 234 GW is in the pipeline. A separate study indicates the country could meet its projected 2030 electricity needs without adding new coal, provided it achieves its 600 GW non-fossil target, including 377 GW solar and 148 GW wind. Even under higher-than-expected demand scenarios, this path remains more cost-effective than coal expansion.

However, experts warn that this transition hinges on key infrastructure investments, particularly in energy storage, transmission, and grid upgrades. If battery storage costs fall by 15% annually, India could cap coal capacity at 260 GW by 2030, as outlined in the National Electricity Plan. Even with slower cost reductions, coal usage would likely plateau.

Renewables, even when accounting for integration and balancing costs, are now cheaper than coal-based power, experts say. Analysts argue that India’s energy security will be better served by scaling clean energy, boosting storage, and improving grid flexibility—rather than building more coal-fired plants and risking stranded assets.