India’s Green Transition and Dependence on Coal

Why in News?

The recent rapid renewable expansion alongside persistent coal dependence, reveals that India’s transition remains incomplete.

What is the renewable energy progress of India?

• Installed capacity – Renewable energy accounted for 42.4% of installed power capacity by March 2026, compared to merely 0.72% in 2005.
• Decline of Coal’s share – The coal’s share in installed capacity declined from 58.7% to 42.2% during the same period.
• Since 2017, renewables have consistently contributed the largest share of new power capacity additions.
• Government initiatives – The National Solar Mission, PM-KUSUM, and Production Linked Incentive (PLI) schemes for solar manufacturing, Green Hydrogen Mission, International Solar Alliance (ISA), have accelerated India’s clean energy ambitions.
• Climate commitments – India has also committed itself internationally through, The Paris Climate Agreement, Panchamrit targets announced at COP26, The goal of achieving net-zero emissions by 2070.
• These developments indicate that India’s renewable transition is genuine and significant.
• Despite impressive installed capacity figures, renewable energy contributes far less to actual electricity generation.

In April 2026, renewables generated only 15.8% of electricity.

Coal still accounted for 71.8% of electricity generation.

What are the structural reasons behind coal dependence?

• Intermittency of Renewable Energy – Renewable sources lack round-the-clock reliability.
• India currently lacks sufficient Large-scale battery storage, Pumped hydro storage, Smart grid systems, and Flexible balancing mechanisms.
• As a result, coal plants remain essential for ensuring uninterrupted electricity supply.
• Limited Retirement of Coal Plants – Although renewable capacity has increased, India has retired very few old coal plants.
• Most thermal plants continue operating because, they provide stable electricity, they are already financially invested assets, and state utilities rely on them for energy security.
• Rising Electricity Demand – India’s electricity demand is rapidly increasing due to Urbanisation, Industrialisation, Digitalisation, rising air-conditioning usage, electric mobility expansion.
• Renewables alone are presently unable to meet peak demand consistently.
• Weak Transmission Infrastructure – Renewable-rich states such as Rajasthan and Gujarat often face transmission bottlenecks.
• India still requires: stronger interstate transmission networks, green energy corridors, modernised distribution infrastructure.
• Geopolitical Vulnerabilities and Energy Security – India’s continued coal dependence is closely linked to global energy markets.
• Nearly half of India’s fossil fuel imports pass through the Strait of Hormuz, including, crude oil imports from Saudi Arabia, LNG imports from Qatar.
• Consequently, geopolitical tensions in West Asia directly affect India through, rising oil prices, higher coal prices, increased electricity tariffs, inflationary pressures, and widening fiscal deficits.
• Even domestically generated electricity remains indirectly exposed to global fossil fuel volatility because fossil fuels determine the marginal cost of power generation.
• The recent energy price spikes demonstrate that India’s energy security challenge is far from resolved despite renewable expansion.

What are the best practices in other countries?

• China – China has managed to reduce vulnerability more effectively because, oil and gas constitute only a small share of its power mix,
• The electric vehicles and hybrids dominate new vehicle sales and domestic manufacturing strengthens supply chains,
• The large-scale battery storage deployment is advancing rapidly.
• China’s integrated industrial and energy strategy has reduced dependence on imported fuels.
• Spain – Spain presents another successful example where, renewables significantly reduced gas dependence.
• The grid reforms enabled large-scale renewable integration, and electricity pricing became less tied to fossil fuel markets.
• These examples show that renewable expansion alone is insufficient without systemic transformation.

What measures could be taken?

• Large-Scale Energy Storage – Investment in lithium-ion batteries, sodium-ion technologies, pumped hydro storage, green hydrogen storage, is essential to manage renewable intermittency.
• Grid Modernisation – India requires smart grids, digital load management, advanced forecasting systems, real-time balancing infrastructure.
• These will improve renewable integration and reduce coal dependence.
• Strengthening Transmission Networks – Expansion of Green Energy Corridors, interstate transmission systems, renewable-rich regional connectivity, will help distribute clean energy efficiently across the country.
• Market Reforms – Electricity market reforms should encourage flexible pricing, ancillary service markets, renewable balancing incentives, private investment in storage and grid technologies.
• Gradual Coal Transition – India should adopt a calibrated coal transition strategy involving, retirement of inefficient thermal plants, cleaner coal technologies in the interim, reskilling of coal-dependent workers, just transition frameworks for coal-producing regions.
• Domestic Manufacturing and Strategic Resilience – Reducing import dependence for solar modules, batteries, rare earth materials, is essential for long-term energy sovereignty.

What lies ahead?

• India’s renewable energy transition is substantial, but it remains incomplete.
• The country has successfully expanded renewable capacity, yet coal continues to dominate actual electricity generation because the broader electricity system has not fully adapted to intermittent renewable power.
• The distinction between installed capacity and actual generation is crucial for understanding India’s energy reality.
• Until storage systems, modern grids, and balancing infrastructure become sufficiently advanced, coal will continue to play a stabilising role in the power sector.
• India’s energy challenge today is therefore not merely about generating more green electricity, but about creating an integrated and resilient power system in which renewables can reliably substitute fossil fuels.
• Only then can India reduce its vulnerability to geopolitical crises, global energy shocks, and fossil fuel volatility while simultaneously achieving sustainable growth and climate goals.

Reference

The Hindu| India’s Energy Transition and Dominance of Coal