Key facts
- India's coal-powered electricity generation increased by 14% year-on-year in June, reaching 120.20 billion kWh.
- Increased demand due to hotter, drier weather drove the surge in coal power generation.
- Wind and solar power generation also rose, accounting for 19% of the electricity mix.
- Hydropower generation dropped by 24.4% and gas generation by 30.1% in June.
- Analysts expect coal demand to remain robust due to El Nino's impact on hydropower.
India's coal-fired electricity generation saw a substantial 14% year-on-year increase in June, reaching 120.20 billion kWh. This surge was primarily driven by heightened demand due to hotter and drier weather conditions, which also led to a significant 24.4% drop in hydropower generation. Gas generation also declined by 30.1%, likely due to elevated prices linked to the conflict in the Middle East.
Despite India's efforts to diversify its energy mix with new wind and solar capacity, which saw a 23% annual increase and constituted 19% of the total electricity mix in June, coal's dominance is expected to persist. Analysts suggest that the dry weather associated with El Nino is reducing hydropower output, making coal a more reliable source for meeting peak cooling demand.
Forecasting models had predicted a significant rise in coal demand for the second quarter, coinciding with the country's peak cooling season. India anticipated a peak summer demand of 270 gigawatts this year. Looking further ahead, long-term projections indicate that India's demand for coal could more than double by 2050, reaching 2.615 billion tons, if current energy policies remain in place.