India, the world’s third-largest carbon dioxide emitter, is burning more coal as energy supply disruptions due to the Iran war and a nationwide heatwave have boosted demand for the dirty fuel.
More than 70% of India’s power is generated from coal-fired plants, and energy experts told CNBC that the share is expected to rise this year.
In February, India announced that more than 52% of its total installed power generation capacity came from non-fossil fuel sources, with the majority coming from solar, hydropower and wind. Yet, coal-fired power plants, which account for nearly 43% of total generation capacity, remain the dominant source of energy.
Coal-fired power generation in India in April increased to 164.9 average gigawatts, compared with 160.7 average gigawatts last year, according to data shared by S&P Global Energy. According to the data, coal-fired power generation rose sequentially by 5.6 average gigawatts, or 3.5%, in April.
About 4% of India’s installed power generation capacity is gas-fired and runs on liquified natural gas, of which about 60% is imported through the Strait of Hormuz.
Higher coal burn
The higher liquid natural gas prices have also made gas-based power generation economically unviable, said Girish Madan, director of corporate ratings at Fitch Ratings in Singapore. “So, coal-based power needs to share a higher burden in these peak summer months,” he added.
Electricity demand in India is rising as temperatures surge amid heatwaves. On April 27, data compiled by New Delhi-based air quality and temperature monitoring platform AQI showed that all 50 of the world’s hottest cities were in India.
“Heatwave conditions, with readings above 40-45 degrees C (Celsius), across several places in India have lifted power demand,” Andre Lambine, lead APAC short-term power and renewables research at S&P Global Energy, told CNBC in an email.
He added that while gas-fired generation rebounded in the last weeks of April, it remains “1.5 average gigawatts below 2025 levels, underscoring the continued displacement of gas by coal in the power mix.”
If the El Niño climate effect develops, there could be a “potential growth of 10% year over year for coal-fired power generation in India,” he said.
India is expected to experience relatively higher temperatures this month, which could result in “heat wave conditions across parts of Northwest, Central and West India, along with the East Coast,” the government said in a release on May 2.
While demand for coal is primarily driven by the power sector, other industries are also leaning on the fossil fuel, said Firat Ergene, lead Insights analyst for coal, petcoke, and cement at Kpler.
Additional demand is coming from industries such as cement producers, he told CNBC.
Supplies of petroleum coke, which is burned as fuel, have been disrupted by the Middle East conflict, pushing prices higher. This has prompted cement companies to substitute petcoke with coal, Ergene explained.
Last month, India vowed to reduce the emissions intensity of its economy by 47% by 2035, in line with its goal to become a net-zero country by 2070. India is the world’s third-highest emitter of carbon dioxide, after China and the U.S.
While India’s carbon dioxide emissions are still rising, the growth rate last year was the slowest in more than two decades, according to an analysis by the Center for Research on Energy and Clean Air, a policy think tank.
