IEEFA: India’s rising renewables sector could make coal unviable

Facebook
Twitter
LinkedIn
Reddit
Email
The report pointed to earlier data from the International Energy Agency (IEA), which shows that solar power capacity in India will surpass coal in the next 20 years. Image: IEA.

India’s rising renewable power capacity could render the country’s 33GW of coal-fired power plants under construction unviable.

That’s according to new research from the Institute for Energy Economics and Financial Analysis (IEEFA), which states that coal’s current 68% share of India’s power mix will fall to 34% by 2040, while solar’s share will rise to 31% compared with just 4% today.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

The institution said there is currently a lack of financing available for new coal-fired power plants in India, which has led to no new plants being announced in the past year, and those that are under development are largely state-owned. IEEFA’s briefing notes that almost half (49%) of the 33GW of coal plants under construction are funded by state power companies, while just 16% of plants are privately funded. Government-owned groups NTPC and NLC India Ltd each own 29% respectively. Additionally, IEEFA states that NTPC has started to focus more on renewable power assets, setting a target of 32GW of clean energy capacity by 2032.

The issue has been exacerbated by the construction delays of the past year. India installed just over 2GW of solar in the first quarter of 2021, up 88% compared with the same period last year and driven by a rush of previous project that had to be delayed, but there has been far less progress in breaking ground on the 29.3GW of pre-construction coal plants, according to IEEFA. On top of this, data from Global Energy Monitor notes that more than 601GW of Indian coal projects have been scrapped in the last decade, while several projects that are under construction have been delayed by COVID-19.

Kashish Shah, research analyst at IEEFA and author of the report, said that future predictions on how India’s power mix will look should take into consideration that new coal-fired power plants “are likely to become stranded assets”.

“The new capacity would only be economically viable if it replaced end-of-life, polluting power plants with outdated combustion technology and locations remote to coal mines.

“Even then, there would need to be sufficient coal plant flexibility to deliver power into periods of peak demand, and the time-of-day pricing would need to be high enough to justify the low over the day utilisation rates.”

India’s Central Electricity Authority (CEA) predicts that the country will reach 267GW of coal-fired capacity by 2030, but IEEFA states this is “highly improbable” given the current challenges the fossil fuel sector faces. The research group expects Indian coal-fired power capacity to peak at between 220GW and 230GW within the next four years.

Read Next

September 16, 2025
IB Solar is investing INR30 billion (US$340 million) in a 4GW TOPCon solar cell and module manufacturing plant in Jewar, Uttar Pradesh.
September 15, 2025
Norwegian energy firm Statkraft has agreed to divest a portion of its renewable energy portfolio to Serentica Renewables.
September 15, 2025
Vikram Solar has secured a contract to supply 200MW of modules to AB Energia, a domestic solar engineering, procurement, and construction (EPC) solutions provider. 
September 12, 2025
ACME Venus Urja has secured INR3.8 billion (US$43 million) to develop and construct a solar-plus-storage project in Barmer, Rajasthan.
September 10, 2025
Indian solar module manufacturer Vikram Solar reported a 79.7% year-on-year increase in revenue for the first quarter of FY26.
September 8, 2025
Vikram Solar has won a 336MW module supply agreement from L&T Construction for the 2.3GW Khavda solar park in Gujarat. 

Subscribe to Newsletter

Upcoming Events

Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK
Solar Media Events
October 2, 2025
London,UK
Solar Media Events
October 7, 2025
Manila, Philippines