A Billion-Tonne Ambition
India's government has laid out an ambitious roadmap for its coal sector. The plan is to boost domestic coal production to nearly 1.15 billion tonnes in the 2025-26 fiscal year, with projections reaching as high as 1.6 billion tonnes by 2030. This surge
is being driven primarily by new mine proposals in the states of Jharkhand and Odisha. State-run behemoth Coal India Limited (CIL) is at the heart of this expansion, consistently increasing its output to meet government targets. This push comes even as the global trend shows a gradual move away from coal, making India's strategy a significant outlier.
Powering a Surging Economy
The primary driver behind this coal expansion is the country's relentless and growing demand for electricity. As one of the world's fastest-growing major economies, India's need for energy is projected to see the largest growth globally in the coming decade. This demand is fuelled by rapid urbanisation, industrial expansion, and rising incomes that lead to greater electricity consumption for things like air conditioning, especially during increasingly severe heatwaves. For a nation striving to lift millions out of poverty and achieve developed status, a stable and affordable power supply is not a luxury—it's a foundational necessity. Coal, being an abundant and domestic resource, is seen as the most reliable way to provide this baseload power.
The Challenge of Renewables
While India has made historic strides in renewable energy—with clean energy sources now accounting for a majority of installed power capacity for the first time—capacity doesn't equal generation. Coal still generates about 75% of the country's actual electricity. The reason is reliability. Solar and wind power are intermittent; they only produce electricity when the sun is shining or the wind is blowing. While India is adding record amounts of solar and wind power, the infrastructure needed to store this energy and transmit it across the country hasn't kept pace. Until battery storage becomes widespread and affordable, coal plants provide the dispatchable power needed to keep the grid stable 24/7, especially during peak demand in the evenings.
The Geopolitics of Energy Security
The decision to increase domestic coal production is also a strategic move to enhance energy security and economic stability. Over-reliance on imported fossil fuels, such as natural gas and higher-quality coal, exposes the country to volatile international prices and geopolitical risks. By maximising its own reserves, India aims to reduce its import bill and insulate its economy from external shocks. Domestic coal is significantly cheaper than imported alternatives, making it a more economically viable option for keeping electricity tariffs low for consumers and industries. This focus on self-reliance is a cornerstone of the government's energy policy.
Walking the Climate Tightrope
This ramp-up of coal production seems to clash with India's international climate commitments, including its goal to achieve net-zero emissions by 2070. However, officials frame the strategy not as a choice between growth and green energy, but as a necessary balancing act. The argument is that the sheer scale of India's new energy demand is large enough to accommodate growth in both coal and renewables simultaneously. Renewables are not displacing coal; they are meeting a portion of the new demand that would have otherwise required even more coal. India's climate pledge focuses on reducing the emissions intensity of its economy and a gradual "phase-down," rather than a rapid "phase-out," of coal, reflecting the nation's developmental realities.
