Coal-fired power generation is projected to surge in India as the expanding wave of renewable energy capacity cannot keep up with electrification growth in the South Asian country, home to the world’s second biggest population.
India’s coal-fired power generation fell to a five-year low of 1,064 terawatt-hours (TWh) in 2020 due to the Covid-19-induced slowdown. However, this was only a dip, as coal still makes up a gigantic 70% of the country’s total electricity production. Significantly, coal-fired power is set to come back with a vengeance, expanding by 43% to 1,523 TWh in 2037, when Rystad Energy expects coal power to finally peak.
Still, the surge in coal consumption is not unexpected. India’s power generation is set to grow exponentially to 3,565 TWh by 2037, more than double the level in 2020. Electricity production will already exceed 2,000 TWh from 2025 and is set to break the 3,000 TWh ceiling from 2034, as a result of an electrification boost and rapid economic expansion, the latest research from Rystad shows.
In fact, Rystad Energy expects India’s electricity generation to increase with an average yearly growth rate of 4.2%, effectively tripling its current level over the next 30 years.
Still, the outlook is not all grim for cleaner electricity. Today’s power mix will be unrecognisable in three decades as the government pushes for greener initiatives. Rystad Energy forecasts all renewable sources grouped together (wind, solar, hydro, and biofuels/waste) will surpass fossil fuels in India’s total power generation by 2038. Further out, Rystad expects solar to outcompete coal by 2050 in terms of the largest share in the power mix.
“India has made some progress in meeting sustainable development goals and its government has set ambitious targets. However, even though it has huge potential for clean power generation, our view is that in the short term its renewable targets are too ambitious. It may take a bit longer, but eventually we will see renewable power dominate,” said Fabian Rønningen, gas and power analyst at Rystad Energy.
New solar and wind projects are projected to accelerate the expansion of India’s renewable power generation. Rystad Energy expects electricity produced by solar PV to grow to 65 TWh in 2021 from 55 TWh in 2020, and then rise further to 128 TWh through 2025 and 233 TWh in 2030.
Power generated by onshore wind turbines, from 69 TWh in 2020, is set to rise to 82 TWh in 2021 and 143 TWh in 2025. In 2030, electricity produced from onshore wind is expected at 254 TWh.
Solar power production will continue to grow even more after 2030, but as onshore wind is also set for a massive boost, solar will only overtake onshore wind towards the end of 2050, estimates from Rystad Energy show.
The only fossil fuel to see an uninterrupted rise in use towards 2050 is gas, even though its share will never become a significant one for India. Rystad Energy expects gas-generated electricity to rise to 73 TWh in 2021 from 71 TWh in 2020, and then reach 85 TWh in 2025 and 128 TWh in 2030 – by which time it will make up about 5% of the total power mix.
“Many countries around the world are relying on gas to transition away from coal and into renewables. However, given the limited access to gas supplies and the country’s economic dependence on the coal industry, India is expected to continue to use coal power to provide stability for the exponential growth in renewable power generation,” said Rystad.