India's coal-powered electricity generation falls even as thermal plant expansion continues: Report

Bengaluru: Amid major efforts to cut emissions in the power sector by boosting renewable energy (RE), India has added more thermal power capacity plants last year even as coal-fired electricity generation declined in the country in 2025, a new study has said.

The 11th edition of 'Boom and Bust 2026' published by the Global Energy Monitor, researchers noted that India stood out due to its record addition of 44.5 GW RE capacity last year, taking the total non-fossil capacity to 267 GW, above 50 per cent of the total installed power capacity.

While coal-fired electricity generation fell by 2.9 per cent (about 57 TWh) and wind and solar accounted for 44 per cent of that decline, the country continued to expand its coal capacity with the commissioning of plants to produce 10 GW. At the same time, retirements of old plants were limited to less than 1 GW.

"Coal projects in the development have also expanded. New coal power proposals totaled 27.9 GW in 2025, extending fifth consecutive year of growth in proposed capacity, which has risen to 107 GW in 2025. This trajectory coincides with the government's coal expansion planning target, which increased from 80 GW in 2024 to 100 GW in 2025, a scale that would expand the coal fleet by roughly 40 per cent by 2032," the study said.

The downward trend in coal and lignite-produced energy has continued into 2026 with the data showing that generation in India from January to April 2026 was approximately 2 per cent lower than the same period in 2025, despite a record-breaking surge in electricity demand driven by an intense spring heatwave.

However, India's system needs are preventing the full absorption of the solar energy. "India curtailed an estimated 2.3 terawatt hours of solar generation between May and December 2026 as the system was unable to fully absorb midday solar output during periods of weaker-than-expected demand," it said.

RE pricing

The researchers pointed to the impact of the power system absorption capacity on the price of RE. It noted that as solar generation expands, it was lowering midday prices while increasing the value of the evening supply, creating a "strong commercial case for battery storage" to shift surplus generation into peak demand periods.

The study underscored the need for operational coordination. It said that as renewable generation continues to grow, system performance will increasingly depend on how effectively existing resources operate together, rather than on the addition of the new coal plants.

Christine Shearer, Project Manager of Global Energy Monitor’s Global Coal Plant Tracker, said “India crossed a milestone in 2025, with renewables making up the majority of installed power capacity for the first time. We're now seeing solar help meet record peaks in demand — a sign that clean energy is becoming central to India's energy security, not just a supplement to it. As renewable generation continues to grow, that security will increasingly depend on how effectively existing resources operate together, rather than on the addition of new coal plants.”