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Coal will continue to account for 70% of India’s electricity mix by 2024: IEA Report

The IEA has said that coal-fired generation will continue to play a dominant role in India’s energy mix as 70% of electricity is expected to be generated from coal by 2024
Coal will continue to account for 70% of India’s electricity mix by 2024: IEA Report
Coal will continue to account for 70% of India’s electricity mix by 2024: IEA Report
  • ‘By 2024, we forecast coal-fired generation to account for 70 percent of the electricity mix, and renewables for 22 percent’
  • ‘While we expect 48 percent of new demand to be met by coal-fired generation, low carbon sources provide about half of the additional supply’

New Delhi: The International Energy Agency (IEA) has said that coal-fired generation will continue to play a dominant role in India’s energy mix as it is expected to account for 70 percent of total electricity generated in the country, while renewable energy (RE) will account for a small 22 percent. In a new report released on Friday, titled Electricity Market Report, the IEA said, “India’s electricity mix remains largely coal-dominated. In 2021, coal made up 74 percent of power generation, followed by renewables with a share of 20 percent. By 2024, we forecast coal-fired generation to account for 70 percent of the electricity mix, and renewables for 22 percent.”

“The year 2021 saw a significant increase in coal-fired generation (up 13 percent) after contractions in 2019 and 2020 driven by economic slowdown, a heavy monsoon season in 2019 that increased hydro generation, and the Covid-19 pandemic,” the report noted.

RE to meet half of new demand for electricity: IEA

As India’s demand for electricity continues to grow, the expansion of generation capacity accelerates from 2022 onwards. “While we expect 48 percent of new demand to be met by coal-fired generation, low carbon sources provide about half of the additional supply. New records for renewable capacity addition are expected in 2021 and 2022, principally wind and solar PV. Consequently, renewables provide 35 percent of the incremental demand, with nuclear largely accounting for the balance. Driven by state and central auctions, as well as a target of 450 GW of installed renewable capacity, renewable generation is expected to increase by 30 percent by 2024 relative to 2021,” said the IEA.

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Coal-fired capacity to continue to grow in future: IEA

At the COP-26 Summit in Glasgow in November 2021, India pledged to reach net zero by 2070. However, despite targets for reducing the emissions intensity of GDP and for 40 percent of generation capacity to be non-fossil fuelled, and despite the coal supply shortages during autumn 2021, new coal-fired plants are still being built. Coal-fired capacity is expected to continue growing in the near future, said the IEA.

According to the draft National Electricity Policy 2021, the Ministry of Power confirms that coal will continue to provide a significant contribution to electricity generation.
As of November 2021, India had seven nuclear reactors under construction with a total gross capacity of 5.2 GW. “We expect nuclear generation to see a sustained increase in the coming years, surpassing gas from 2022 as the third-largest contributor to generation, after coal and renewables,” said the report.

Industrial, residential sectors to drive growth in demand: IEA

After more than 2 percent decline in electricity demand in India during 2020 due to the Covid-19 pandemic, 2021 saw a rebound with growth of estimated 10 percent. This took demand to levels higher than before the pandemic, despite the outbreak of new Covid-19 variants in March-June. Over 2022-2024, we expect annual demand growth to remain above pre-pandemic levels at around 6.5 percent per year, the IEA said.

While progress towards universal electricity access in India has long been a main driver for increases in demand (rising from 76 percent in 2010 to 98 percent in 2019), we expect current and future demand levels to be driven by growth in the industrial and residential sectors, it added. 

The Make in India government initiative will continue to propel electricity demand growth in the industrial sector by promoting local manufacturing. Additionally, per-capita electricity demand in India is still below the global average and therefore quality of service improvements are expected to further drive electricity demand growth through end uses such as cooking, cooling, and mobility – despite the positive impact of initiatives such as the Unlocking National Energy Efficiency Potential strategic plan.