India Faces Energy Trilemma Amid Coal & Transition Push: S&P Global

India Faces Energy Trilemma Amid Coal & Transition Push: S&P Global

India is set to see a sharp rise in energy demand over the next two decades, with coal continuing to play a dominant role despite growing momentum in the clean energy transition, S&P Global Commodity Insights said Tuesday in a note following its Outlook 2025 media roundtable.

India’s energy landscape is shaped by a threefold challenge — balancing economic growth, clean energy transition, and energy security, said Gauri Jauhar, Executive Director, Energy Transition & Cleantech Consulting at S&P Global.

“India is riding the global energy transition wave while navigating rising energy demand, rapid urbanisation, and high pollution levels,” she said.

Upper-Middle Income Economy by 2050

S&P Global projects that India will transition to an upper-middle income economy by the mid-2030s. By 2050, the country is expected to add an urban population comparable to the size of the current United States.

Despite growing renewables, fossil fuels will continue to underpin the country’s energy mix. Under S&P Global’s base case, fossil fuels remain dominant in 2050. In an accelerated greening scenario, their share could fall to 33%, but in a “Discord” scenario — where global cooperation falters — fossil fuels could still account for 77% of primary energy use.

India currently imports around 87% of its oil, 50% of its gas, and 26% of its coal. “Achieving net zero and energy security will require coordinated policy, regulatory clarity, and consistent corporate action,” Jauhar said.

Coal demand to rise 60% by 2050

India’s coal demand is expected to grow by about 60% by 2050, according to Pritish Raj, Managing Editor, Asia Thermal Coal at S&P Global. Most of the growth will be met by domestic production, but import demand — particularly for the non-power sector — will remain strong.

“India’s 1.5 billion metric ton coal production target is achievable, supported by private investment, mine auctions, and infrastructure improvements,” Raj said. However, limitations in domestic coal quality, such as high ash content, will continue to drive imports.

Thermal coal imports are projected to reach 150–180 million metric tons by 2030, with 60–80 million tons earmarked for power generation. India’s domestic coal typically has ash content of 30–45%, compared to 6–20% for seaborne coal.

Power demand, solar share rising

Installed power capacity is expected to more than quadruple by 2050. While coal’s share in the power mix may decline from over 70% today to around 66% by 2030, its generation share will increase to about 1,600 TWh by 2030.

The rise is driven by rapid population growth, projected GDP growth above 6%, and expanding electricity access. Solar generation is expected to double from 184 TWh in 2024 to 360 TWh in 2030, raising its share from 8.5% to 14.6%.

India remains a rare source of energy demand growth at a time when global oil markets face headwinds from oversupply and sluggish consumption, S&P Global said.

“India is poised to play a central role in global energy markets in the coming decades,” the firm noted, pointing to its diversification efforts, domestic coal expansion, and growing renewable footprint.