India, the third-largest emitter of carbon dioxide in the world, is seeking to increase its coal consumption to tackle energy supply disruptions resulting from the war in Iran and severe heat waves. Experts anticipate a rise in the proportion of electricity generated from coal in the country as demand for this polluting source intensifies.
India produces more than 70% of its electricity needs through coal-fired power plants, and energy experts have reported to CNBC that this percentage is likely to rise this year. Last February, the Indian government announced that over 52% of its total installed electricity generation capacity comes from non-fossil sources, with significant contributions from solar, hydro, and wind energy.
Event Details
Despite this, coal power plants, which account for about 43% of the total installed capacity, remain the dominant source of energy in the country. Electricity generation from coal in India rose in April to an average of 164.9 gigawatts, compared to 160.7 gigawatts last year, according to data from S&P Global Energy.
The data also showed a sequential increase in coal-based generation of about 5.6 gigawatts, or 3.5%, in April. Gas-fired electricity generation constitutes about 4% of India's installed capacity, which heavily relies on liquefied natural gas, with approximately 60% of this quantity imported through the Strait of Hormuz.
Background & Context
Girish Madan, a corporate ratings director at Fitch Ratings in Singapore, stated that rising liquefied natural gas prices have made gas-based electricity generation economically unfeasible. Consequently, coal plants must bear a greater burden during the summer months when demand peaks.
Electricity demand in India rises with increasing temperatures during heat waves. On April 27, data from the AQI platform for monitoring air quality and temperatures, based in New Delhi, indicated that all of the fifty hottest cities in the world were located in India.
Impact & Consequences
André Lamblin, head of short-term energy research and renewable energy for the Asia-Pacific region at S&P Global Energy, noted that heat wave conditions, with recorded temperatures exceeding 40 to 45 degrees Celsius in several regions of India, have heightened electricity demand. Although gas-based generation has recovered in recent weeks of April, it remains about 1.5 gigawatts lower on average compared to 2025 levels, underscoring the continued replacement of coal for gas in the energy mix.
The Indian government anticipates higher-than-usual temperatures this month, which could lead to heat wave conditions across parts of northwest, central, and western India, as well as the eastern coast, according to a statement issued on May 2.
Regional Significance
Although the demand for coal primarily comes from the electricity sector, other industries have increasingly relied on this fossil fuel, such as cement production. Additionally, supplies of petroleum coke, which is used as fuel, have been affected due to the conflict in the Middle East, driving prices up and prompting cement companies to replace petcoke with coal.
Last month, India pledged to reduce its emission intensity by 47% by 2035, as part of its goal to become carbon neutral by 2070. India is the third-largest emitter of carbon dioxide globally, following China and the United States, and despite the continued rise in emissions, the growth rate over the past year was the slowest in more than two decades.