India's Coal Dependency Below 50% in Electricity Mix, For The 1st Time In 5 Decades: Report

India's energy landscape is undergoing a significant transformation as coal's share in the country's electricity mix falls below 50% for the first time since 1966.

The Institute for Energy Economics and Financial Analysis (IEEFA) just released its POWERup quarterly report, and it shows that of the record 13,669 megawatts (MW) of new power generation capacity added in the January-March period, renewable energy now makes up a sizable 71.5%.

This significant achievement highlights India's outstanding efforts to diversify its energy sources and lessen its dependency on fossil fuels.

The shift towards renewable energy sources surpasses the Indian government's targets, signalling a promising trajectory towards achieving sustainable energy goals.

Notably, the decline in coal usage aligns with a global trend, as highlighted by IEEFA, JMK Research & Analytics, and Ember, with coal demand in G7 countries reaching record lows in 2023.

India's focus on large-scale renewable energy projects has attracted widespread attention, as evidenced by tender issuances exceeding a record 69 gigawatts (GW).

The substantial tender issuances, as outlined in the report on utility-scale renewable energy tendering trends in India, underscore investor confidence and the sector's potential for growth.

"The market has recovered and is now stronger than it was in 2019 and 2022 as a result of supply-chain problems, global price hikes brought on by the COVID-19 pandemic, and Russia's invasion of Ukraine," said Vibhuti Garg, Director - South Asia, IEEFA.

"The utility-scale renewable energy sector in India is attracting a lot of interest from investors. Large-scale market growth potential, central government support in the form of goals and regulatory frameworks, and larger operating margins are the main causes," Vibhuti added.

Ember's Global Electricity Review positions India as the third-largest solar power generator globally, trailing only China and the US. Solar energy emerges as the fastest-growing electricity source for the 19th consecutive year, outpacing coal in terms of new electricity additions. India's substantial increase in solar generation in 2023 reinforces its pivotal role in driving global renewable energy growth.

"The global shift towards renewables, with the share of global electricity from renewable sources expanding from 19% in 2000 to over 30% in 2023, This surge is driven by significant contributions from solar and wind energy, highlighting the increasing prominence of clean energy in the global power mix," the report says.

However, despite strides in renewable energy adoption, India continues to grapple with coal dependency, accounting for over 70% of electricity generation. Challenges such as adverse weather conditions and surging power demand perpetuate India's reliance on coal, presenting hurdles to achieving a more balanced energy mix.

The Central Electricity Authority's projections of a hydropower shortfall further compound India's energy challenges, particularly during periods when solar energy production is offline, potentially leading to power shortages.

India's transition towards renewable energy represents a pivotal step towards achieving sustainability and combating climate change. While significant progress has been made, addressing the lingering challenges associated with coal dependency remains imperative to realising India's clean energy ambitions and ensuring a sustainable energy future.

The number of tenders for energy storage system (ESS) projects has increased dramatically. These projects are going to be an essential component of India's renewable energy infrastructure.