India's Renewable Future: Meeting 2032 Power Demand Without New Coal Plants

New Delhi: According to a recent study, India has no need for additional coal power plants beyond those currently under construction to satisfy its electricity requirements through 2032.

The report, released Tuesday by global energy think tank Ember, cautioned that expanding coal capacity would be economically unsound and could potentially impose higher tariffs on power distribution companies and consumers as renewable energy sources and storage technologies become increasingly affordable and reliable.

Titled "Coal's Diminishing Role in India's Electricity Transition," the analysis determined that India can fulfill its 2032 power demands through solar, wind, and energy storage targets already established in the National Electricity Plan (NEP) 2032.

Ember's modeling revealed that if these renewable and storage objectives are achieved, approximately 10 percent of additional coal units will remain entirely unused by 2031-32, while nearly a quarter of the fleet will experience significant underutilization.

"India's power system is entering a new phase of transition. As renewables gain a bigger share of the country's generation mix and storage becomes cheaper, coal's role diminishes. Building coal beyond the current pipeline is neither necessary nor economical for the country," explained Neshwin Rodrigues, Senior Energy Analyst - Asia at Ember.

The report indicated that the average utilization of India's coal plants, measured as plant load factor (PLF), will decline from 69 percent in 2024-25 to 55 percent in 2031-32.

This implies that numerous plants will operate at reduced capacity or remain idle for extended periods as solar and wind power increasingly dominate daytime electricity generation.

Coal must transition from being the primary electricity source to serving as a flexible backup when renewable sources are not generating power. This reduced usage will inevitably make coal power more expensive.

As fixed costs are distributed across fewer operating hours, the effective tariff of coal-based electricity is projected to increase by approximately 25 percent by 2031-32, according to the study.

Ember estimated that coal power currently priced at Rs 6 per unit could rise to Rs 7.25 per unit for electricity distribution companies (DISCOMs) once lower utilization and operating costs are accounted for.

Coal power has already become more expensive than many renewable alternatives.

The report noted that recently discovered tariffs for new coal projects exceed Rs 6 per unit in Bihar and hover around Rs 5.85 in Madhya Pradesh, despite both states' proximity to coal-producing regions.

Much of this increase stems from high fixed costs that must be paid regardless of whether plants are actively generating electricity.

In contrast, firm and dispatchable renewable energy (FDRE), which combines renewable sources like solar or wind with battery storage, is emerging as a more economical and dependable option.

The report indicated that FDRE tariffs now range between Rs 4.3 and Rs 5.8 per unit, while solar-plus-storage projects have achieved rates as low as Rs 2.9 to Rs 3.6 per unit.

"Already, India's auctions are incorporating more hours of battery, and ultimately, batteries will work with solar to make 24/365 electricity. There's no reason why India can't copy its success from solar manufacturing to become self-sufficient in battery manufacturing and so energising India with home-grown solar and battery," stated Dave Jones, Ember's chief analyst.

The study also emphasized that battery technology has evolved rapidly, with lifespans now extending over decades and newer sodium-ion technology eliminating the need for critical minerals.

Ember's co-author Duttatreya Das warned that India must avoid repeating previous mistakes of excessive coal capacity construction.

"Having learned from past coal overbuild, India must avoid repeating old mistakes amid a rapidly changing energy landscape. Renewables with storage now clearly stand out as the more prudent investment choice," he stated.

The report recommended focusing on accelerating storage deployment, retrofitting existing thermal plants for greater flexibility, and strengthening power dispatch and reserve systems to integrate renewable energy at minimal cost.

It concluded that India's next phase of power planning should prioritize flexibility and reliability through renewable energy and storage rather than new coal construction, which would only commit the country to costlier, underutilized assets.