India’s dual energy strategy: Coal expansion and renewables amid record power demand

---

---

Synopsis India faces a critical juncture in balancing its energy needs with sustainability goals. While coal, comprising 50% of its energy mix, remains essential for immediate demands, significant strides are being made in renewable energy, with 500 GW of non-fossil fuel capacity targeted by 2030. Solar and wind projects are advancing, supported by energy storage innovations and green hydrogen. Yet, challenges like intermittency, policy gaps, and environmental concerns persist. Guided by robust policies and international commitments, India’s dual energy strategy aims to ensure energy security while transitioning toward a greener, low-carbon future. Image courtesy: AI

India, the world’s third-largest carbon emitter, is at a crossroads in its energy strategy. As the global energy landscape shifts toward greener alternatives, the country faces the delicate task of balancing its immediate energy needs with long-term sustainability goals.

India’s coal dependency, historically the cornerstone of its energy policy, remains crucial for meeting current demand, especially as power consumption continues to soar. At the same time, the country is making significant strides in expanding renewable energy sources to reduce its carbon footprint and meet international climate commitments.

With India’s electricity demand forecasted to grow by 5-6% annually, the government is intensifying efforts to expand its energy infrastructure. These efforts include large investments in coal-fired power plants and ambitious projects in renewable energy, particularly solar and wind.

However, the path ahead is filled with complexities, as India seeks to reduce its coal reliance without compromising on its development goals. This article delves into India’s evolving energy strategy, exploring the expansion of coal projects, the growth of renewable energy, and the balancing act required to meet the country’s energy needs in an environmentally conscious manner.

The unwavering role of coal in India’s energy future

Despite a global push toward decarbonization, coal remains a crucial pillar of India’s energy mix. In 2023, coal accounted for around 50% of the country’s installed power capacity, which currently stands at over 428 GW. This reliance on coal is not just a matter of energy preference; it is tied to the economic and infrastructural realities of a rapidly industrializing nation. India’s energy security depends on coal’s reliability and affordability, offering a buffer against the volatility and supply disruptions seen in global natural gas markets, especially during Europe’s energy crisis.

Recognizing the importance of coal in its energy mix, India has set ambitious plans for the coming years. The government is slated to operationalize 13.9 GW of new coal-fired capacity in 2024, marking the largest annual addition in over six years. In total, India plans to add 50 GW of coal-based capacity over the next five years. This expansion is supported by an investment of ₹7.28 lakh crore ($88 billion), highlighting the government’s determination to ensure a stable and reliable energy supply for the country’s growing needs.

However, while coal is indispensable to meeting energy demand in the short term, it does come with significant challenges. Chief among these are the environmental impacts and the logistical hurdles associated with expanding coal infrastructure. Land acquisition issues and delays in equipment procurement have slowed the development of coal plants in certain regions. In response, the government has undertaken reviews of stalled coal projects to accelerate their completion, which will be crucial to meeting future energy needs.

A sustainable approach to coal expansion

Despite its importance, coal’s environmental footprint remains a significant concern. In response, India is taking steps to ensure that its coal sector evolves in a more sustainable direction. Initiatives like the Sustainable Coal Production Initiative are focused on using cleaner, more efficient mining techniques and integrating carbon capture technologies to reduce emissions from coal-fired plants.

Furthermore, India is working on the reopening of previously closed coal mines using modern, environmentally friendly practices. The government’s aim is to balance increased coal extraction with environmental safeguards, ensuring that the country’s energy needs are met without compromising long-term environmental goals. Carbon capture and storage (CCS) technologies are also being explored to mitigate the adverse environmental effects of coal combustion, helping to reduce carbon emissions from existing power plants.

While the push for cleaner coal technologies is a step in the right direction, the scale of India’s coal dependence makes it clear that a complete transition to renewables is unlikely in the near future. Thus, the challenge lies in balancing the short-term need for coal with the long-term vision of a greener, more sustainable energy future.

The rise of renewables: India’s green energy push

India is making significant progress in diversifying its energy mix through the adoption of renewable sources. The country has already surpassed 125 GW of installed renewable capacity, including solar, wind, and hydropower. This momentum is in line with India’s broader goal to achieve 500 GW of non-fossil fuel capacity by 2030, which would account for 50% of its total installed capacity.

Solar energy, in particular, has emerged as a key focus area for India. The country has become a global leader in solar energy development, driven by large-scale projects such as the Bhadla Solar Park, which is one of the largest solar parks in the world.

However, while solar power offers great promise, it also faces certain limitations. Solar energy is intermittent, dependent on weather conditions, and cannot always provide a continuous power supply. This necessitates substantial investments in grid infrastructure and energy storage solutions to ensure that solar power can be stored and used when needed most.

Wind energy also plays a significant role in India’s renewable energy portfolio, particularly in coastal and onshore regions. The country has vast untapped potential for wind power, with major projects already in place. However, challenges such as land acquisition issues and the need for better financing mechanisms to support wind energy projects remain significant obstacles. These issues are being addressed as part of India’s ongoing push to overcome barriers to renewable energy expansion.

Overcoming intermittency: The role of energy storage

One of the key challenges with renewables, especially solar and wind, is their intermittent nature. Energy storage technologies are crucial to ensuring that renewable power can be available around the clock. To address this, India is investing in battery storage systems, which can store excess energy generated during the day for use during the night or periods of low generation.

Additionally, green hydrogen is emerging as a potential solution for storing renewable energy and using it for industrial and transport applications.

These technological innovations are critical to addressing the intermittency of renewable energy sources and ensuring that they can play a larger role in India’s energy future. The government is also exploring ways to enhance grid management to integrate renewable energy sources more effectively into the national grid.

Policy measures supporting the energy transition

India’s energy transition is underpinned by a robust policy framework designed to encourage both coal efficiency and renewable energy growth. The Electricity Amendment Bill, which is currently under review, seeks to encourage competition in power distribution and promote renewable energy adoption. Additionally, the government has introduced various incentives for renewable energy projects, including subsidies for green technology adoption and streamlining approval processes for renewable energy installations.

The government’s policies have played a pivotal role in driving India’s renewable energy growth. However, the country’s dual energy strategy, which involves both expanding coal capacity and investing in renewables, requires ongoing policy support to ensure that both sectors can thrive in a sustainable manner.

International commitments and climate goals

India’s energy strategy is closely aligned with its commitments under the Paris Agreement. While the country has not pledged to phase out coal entirely, it has committed to reducing the carbon intensity of its GDP by 45% by 2030 compared to 2005 levels. India also aims to meet 50% of its total energy capacity from non-fossil fuels by 2030. This dual approach reflects the need to balance economic development with environmental responsibilities.

India’s commitment to these climate goals underscores the challenge of achieving energy security while transitioning to a greener energy mix. The government is mindful of the need to meet its developmental objectives while minimizing the environmental impact of energy production.

Future outlook: Navigating the energy transition

India’s energy strategy is a delicate balancing act between meeting immediate energy needs and pursuing a sustainable, low-carbon future. The expansion of coal projects is necessary to meet the country’s growing power demand, but the long-term goal remains to transition to a decarbonized energy system. To achieve this, India must accelerate technological innovation in energy storage, grid management, and carbon capture, while ensuring that policies remain conducive to both coal and renewable energy growth.

India’s energy future will depend on its ability to navigate these complex challenges. The coming decade will be critical in determining whether the country can meet its energy needs while simultaneously reducing its carbon footprint and achieving its international climate targets.

Kindly follow us for updates on:

LinkedIn

X