Introduction
India’s electricity sector is undergoing one of the largest energy transformations in the world. For decades, coal has formed the backbone of power generation, supporting industrialisation, urban growth, and rising living standards. However, mounting climate concerns, international commitments, and domestic sustainability goals are now reshaping this traditional structure.
India has pledged to achieve net-zero carbon emissions by 2070, a commitment announced at COP26. Meeting this target demands a fundamental overhaul of how electricity is produced, stored, and delivered. The transition is not merely technological—it is economic, social, and institutional.
The country today stands at a crossroads: how to rapidly expand renewable energy while ensuring affordable, reliable power for a growing population.
Present Energy Mix: Coal Still Dominates Actual Generation
Although renewable capacity has expanded rapidly, coal continues to supply the majority of India’s electricity.
This apparent contradiction arises because installed capacity and actual generation are not the same. Solar and wind plants operate only when natural conditions permit, whereas coal plants run continuously. As a result:
- Coal still contributes roughly three-fourths of total electricity generation.
- Renewable sources account for about half of installed capacity but much less in daily output.
- Nuclear power remains marginal despite its low-carbon advantage.
India’s power system therefore remains structurally dependent on coal for baseload supply.
Institutions like NITI Aayog highlight that this dependence cannot be eliminated overnight without risking grid instability.
Why Coal Remains Central in the Short Term
Coal’s persistence is not accidental—it reflects practical realities.
1. Reliability and Dispatchability
Coal plants provide steady electricity regardless of weather. This makes them indispensable for meeting peak demand and maintaining grid frequency.
2. Cost Considerations
Domestic coal reserves and existing infrastructure make coal one of the cheapest sources of large-scale power in India.
3. Grid Stability
Renewables fluctuate hourly and seasonally. Until large storage systems become widespread, coal acts as a balancing mechanism.
4. Industrial Dependence
Energy-intensive sectors such as steel, cement, and manufacturing still rely heavily on coal-based electricity.
Thus, coal currently functions as a “transition fuel” rather than a permanent solution.
Structural Barriers to Renewable Dominance
Moving from coal to renewables is not simply about building more solar parks or wind farms. Several deeper challenges slow the shift.
Intermittency of Renewable Sources
Solar power disappears at night. Wind patterns vary unpredictably. This intermittency creates mismatches between supply and demand, forcing grid operators to keep thermal plants on standby.
Low Capacity Utilisation
Renewable plants operate at lower capacity factors than coal stations. A 1 GW solar plant does not produce the same annual electricity as a 1 GW coal plant.
Transmission Constraints
Most renewable energy is generated in resource-rich regions (Rajasthan, Gujarat, Tamil Nadu) far from demand centres. India’s transmission network is still catching up with this geographical mismatch.
Limited Storage Infrastructure
Energy storage remains India’s weakest link. Battery deployment is small, and pumped hydro facilities are insufficient for large-scale balancing.
Without solving these issues, renewables alone cannot replace coal.
Long-Term Pathways: Competing Futures for India’s Power Sector
India’s policy planners have modelled multiple scenarios for the future electricity system.
Two broad trajectories emerge:
Current Policy Path
If present policies continue:
- Renewable capacity expands steadily.
- Coal generation declines slowly but does not disappear.
- Nuclear grows modestly.
- Storage deployment remains limited.
This pathway reduces emissions but falls short of net-zero ambitions.
Net-Zero Pathway
Under a more aggressive climate strategy:
- Coal power peaks early and gradually phases out.
- Renewables become the dominant generation source.
- Nuclear power expands substantially.
- Massive energy storage capacity is added.
- Green hydrogen emerges as a major industrial fuel.
This scenario aligns with India’s 2070 commitment but requires unprecedented investment and coordination.
Energy Storage: The Missing Backbone
A renewable-heavy grid cannot function without storage.
Battery Energy Storage Systems (BESS)
Batteries help absorb excess solar and wind energy and release it during demand peaks. However, current deployment is negligible compared to future needs.
By mid-century, India may require storage capacity running into thousands of gigawatts to stabilise a renewable-dominated grid.
Pumped Hydro Storage
Pumped hydro works like a giant battery by pumping water uphill when electricity is surplus and releasing it during shortages. India has large untapped potential in this area, especially in hilly regions.
Together, batteries and pumped storage will determine how fast coal can be retired.
Nuclear Power: A Strategic Low-Carbon Anchor
While renewables provide clean energy, they cannot yet guarantee round-the-clock supply. This makes nuclear power strategically important.
Nuclear energy offers:
- Continuous baseload generation
- Minimal carbon emissions
- Small land footprint
- Compatibility with hydrogen production
Under net-zero scenarios, nuclear capacity is expected to rise sharply, supported by advanced reactors and small modular technologies.
Organizations such as International Energy Agency consistently identify nuclear as a stabilising force in clean power transitions.
Coal’s Future: From Backbone to Backup
Coal is unlikely to vanish suddenly. Instead, its role will evolve.
Gradual Phase-Down
Older, inefficient plants will retire first. New coal capacity will slow dramatically after 2030.
Cleaner Coal Technologies
Carbon Capture, Utilisation, and Storage (CCUS) may allow some coal plants to operate with lower emissions during the transition period.
Social Considerations
Millions depend on coal mining and thermal power for livelihoods. A “just transition” framework is essential to retrain workers and diversify local economies.
Investment Requirements: A Trillion-Dollar Transition
Transforming India’s power sector will require enormous capital.
Major spending areas include:
- Renewable generation
- Grid expansion
- Battery manufacturing
- Pumped hydro projects
- Nuclear plants
- Hydrogen infrastructure
Public finance alone is insufficient. Private investment, green bonds, and international climate finance will be crucial.
Policy certainty and regulatory clarity are therefore as important as technology.
Government Initiatives Driving Change
Several national programs are accelerating the shift:
- Renewable Purchase Obligations for utilities
- Production-Linked Incentives for solar manufacturing
- National Green Hydrogen Mission
- Green Energy Corridor for transmission
- Market reforms for battery storage
The Ministry of Power plays a central role in coordinating these efforts across states and utilities.
India’s Recent Progress
India has already crossed major milestones:
- Non-fossil capacity now exceeds 50% of total installed capacity.
- Solar tariffs have fallen dramatically, making renewables cost-competitive.
- Annual renewable additions are among the world’s highest.
Yet, coal still dominates actual electricity supply, underlining the gap between capacity and real-time generation.
Broader Implications for Development
India’s energy transition affects far more than emissions.
It influences:
- Industrial competitiveness
- Energy security
- Employment patterns
- Urban air quality
- Rural electrification
- Global climate leadership
Successfully managing this shift can position India as a model for developing economies pursuing growth alongside decarbonisation.
Conclusion
India’s power sector is moving from a coal-centred system toward a diversified clean-energy architecture. This transformation is complex, gradual, and resource-intensive. Coal will remain part of the mix in the near term, but renewables, storage, and nuclear power are steadily reshaping the future.
The challenge is not simply replacing coal—it is building an electricity system that is reliable, affordable, inclusive, and sustainable.
If India succeeds, it will demonstrate that large emerging economies can achieve climate goals without compromising development—a lesson with global significance.
