India’s coal conundrum: Do energy needs trump environmental concerns?

In 2022, as the gears of India’s economy slowly creaked back into motion after a pandemic-induced two-year lull, India’s power generation struggled to keep up with the pent-up demand. Indeed, despite India’s power generation growing at its highest rate in three decades in the year ended March 2023 (FY23), the country experienced its highest peak power demand deficit in eight years.

India’s appetite for energy has only risen since. India’s peak demand jumped 12.6% to 243.3 GW in September last year from 215.9 GW in April 2022. Power demand itself has grown at a compounded annual growth rate (CAGR) of 8.9% between FY21 and FY23.

The government was forced to sit up and take notice. Late last year, it announced plans to add 80 gigawatts (GW) of thermal power capacity—27 GW of which are already under construction—by 2031-32. The announcement came just over a week before the United Nations Climate Change Conference in Dubai which started on November 30, and was a clear signal that India would not shy away from adding coal-based thermal capacity despite its long-stated desire to transition to renewable energy sources.

This push for more thermal power will see India add more annual coal power generation capacity in 2024—13.9 GW—than in any of the last six years, as per reports.