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Brookings: U.S. can support India transition from coal

April 20, 2021


Achieving the goals of the 2015 Paris Agreement will be difficult without ultimately phasing out coal in India, among other countries. In March 2020, prior to COVID-19, India had the third largest coal generating capacity in the world. Behind China, India also had the second largest pipeline of new coal plants slated for construction.

While India is currently only responsible for about seven percent of global greenhouse gas emissions, that share could rise rapidly if India’s pent-up demand for energy is ultimately met through coal-fired electricity. While renewable energy is now less expensive than new coal-fired power across most of India and accounts for the bulk of new capacity installations, coal continues to dominate India’s electricity generation due to the legacy of coal plant construction in previous decades. 

India also has ambitious plans to scale up renewable energy, having expanded its original target of 175 GW of renewable energy by 2022 to 450 GW by 2030. While slow economic growth may diminish India’s ability and need for that extent of capacity additions, the coal sector could face stranded assets from uncompetitive power. In a scenario of heavy renewables penetration, a 2021 study for the Institute for Energy Economics & Financial Analysis (IEEFA) found that the India’s largest power company NTPC, Coal India, and Indian Railways could face major cash flows losses, reaching $9 billion over the next decade. 

[Joshua Busby, Sarang Shidore, Johannes Urpelainen, Morgan Bazilian]

More: The case for US cooperation with India on a just transition away from coal

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