An Insatiable Appetite for Energy
India's economy is one of the fastest-growing in the world, and with that growth comes a tremendous demand for energy. The International Energy Agency (IEA) predicts India will be the largest source of energy demand growth globally through 2035. This
surge is driven by expanding industrial activity, increased urbanisation, and rising household consumption, including a sharp increase in the use of air conditioning to combat more frequent and intense heatwaves. To ensure a stable and reliable power supply, the government sees coal as an essential component of its energy security. Coal currently fuels over 70% of the nation's electricity generation, providing the consistent baseload power needed to keep the grid from failing, a role that intermittent renewable sources cannot yet fill on their own.
The Paradox of Slower Mine Openings
While the need for coal is clear, opening new mines has become a slower and more challenging process. A recent report from Global Energy Monitor highlighted that while India has a significant pipeline of proposed new mines, the rate of new mine openings has fallen globally. The slowdown isn't due to a lack of coal reserves; India has the world's fifth-largest. Instead, the hurdles are multifaceted. They include persistent difficulties in acquiring land, navigating strict environmental clearance processes, and addressing the social impact of displacing communities. Furthermore, logistical bottlenecks in transporting coal from mines to power plants, primarily via an already strained railway network, add another layer of complexity. In some cases, it's more efficient to increase output from existing, underutilised mines than to start new ones from scratch.
Bridging the Gap: A Multi-pronged Strategy
So, how does India plan to fuel its new power plants with fewer new mines? The strategy is a mix of maximising domestic resources and optimising supply chains. The government is pushing state-run Coal India to accelerate production from existing mines to reduce reliance on foreign supplies. This push has been effective, with domestic coal production surpassing one billion tonnes in fiscal year 2024 and continuing to grow. As a result, coal imports for thermal power plants have seen a significant decline. The government is also investing in technologies like coal gasification to use the resource more efficiently and with potentially lower emissions. This focus on domestic production aims to enhance energy security and reduce the economic impact of volatile international coal prices.
Renewables: The Other Side of the Coin
India's continued investment in coal does not mean it is abandoning its climate goals. The country is simultaneously pursuing one of the world's most ambitious renewable energy programs, with a target of achieving 500 GW of non-fossil fuel capacity by 2030. As of mid-2026, clean energy sources for the first time account for a majority of India's installed power capacity. However, installed capacity is different from actual generation. Because solar and wind are intermittent, coal plants are still needed to run around the clock to ensure grid stability. The government’s approach is not an 'either/or' choice between coal and renewables, but a 'both/and' strategy. In a country where energy demand is growing so rapidly, renewables are helping to meet new demand rather than immediately displacing the existing coal fleet.
