India is set to boost its coal-fired capacity in 2024 by the largest margin in at least six years

Doug Sutton<br>Partner & Interim CEO

Doug Sutton
Partner & Interim CEO

According to a statement from India’s power ministry to Reuters on Feb 1, New Delhi will commence operations of new coal-fired power plants with a combined capacity of 13.9 gigawatts (GW) this year, marking the most significant annual increase in at least six years.

Prime Minister Narendra Modi’s administration has justified India’s heavy reliance on coal by citing energy security concerns amid a surge in power demand and relatively low per-capita emissions. Power generation saw an 11.3% uptick in 2023, the quickest pace in at least five years.

The power ministry stated on Thursday that around 19,600 megawatts (MW) of capacity are expected to come online in the next 18 months. This figure includes the 13.9 GW slated for commissioning this year.

The projected increase in capacity for 2024 will surpass the annual average of the past five years by more than four times. In 2023, India added 4 GW of coal-fired power capacity, marking the highest addition since 2019.

During the same period, coal-fired output witnessed a 14.7% surge, surpassing the growth rate of renewable energy output for the first time since at least 2019. Analysis of daily load dispatch data from the federal grid regulator revealed a 12.2% rise in green energy output in 2023.

Despite India’s failure to meet its target of adding 175 GW of renewable power capacity by 2022, the planned increase in coal-fired capacity for 2024 is poised to outstrip the 13 GW rise in renewables witnessed in 2023.

The Ministry of Power has outlined plans to add at least 53.6 GW of coal-fired power capacity over the next eight years, ending in March 2032, in addition to the 26.4 GW currently under construction. Coal currently contributes to over 50% of India’s installed capacity, which stands at 428.3 GW.

Construction of coal-fired projects has encountered notable delays. Nevertheless, New Delhi has initiated a review of plants stalled for years due to issues like equipment procurement and land acquisition delays, aiming to address these challenges.

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