India’s coal power generation dropped to its lowest level since the Covid lockdowns in May, despite the lowest coal prices in Asia in four years. This decline was driven by milder weather without heatwaves and a sharp rise in renewable energy capacity and output.
Coal still provided over 70% of India’s electricity, but its share fell to 70.7% in May—the lowest in three years—according to data from the federal power grid regulator Grid India reviewed by Reuters.
Natural gas-fired power also fell sharply, contributing to a decline in fossil fuel-based electricity generation in the world’s second-largest coal importer and fourth-largest LNG importer.
Meanwhile, renewable energy generation surged to a record high. Clean energy sources now make up a growing portion of India’s power mix.
The drop in coal power was mainly due to weaker electricity demand caused by the absence of heatwaves compared to last year and economic challenges. Coal-fired generation fell by 9.5% in May compared to the same month last year—the biggest drop since the Covid lockdowns in June 2020.
Natural gas generation fell even more dramatically, plunging 46.5% in May, the largest decline since October 2022, when gas prices soared after the Russian invasion of Ukraine.
Renewable energy production rose 17.2% to the highest level ever recorded in May 2025. Renewables now account for 15.4% of India’s total power output, up from previous records. By comparison, coal’s share declined from 74% in May last year to 70.7% this May.
Mild weather helped reduce demand for fossil fuel power, but rapid renewable capacity growth shows India’s increasing commitment to clean energy and reducing reliance on fossil fuel imports.
Despite this, India is continuing its coal investments. New coal-fired power capacity installations reached 4 gigawatts (GW) in 2024, matching a five-year high from 2023 and the highest since 2019.
India plans to add up to 90 GW of coal capacity by 2032 to meet rising power demand with stable baseload electricity.
At the same time, renewable energy growth is accelerating. In the 2024/25 financial year ending March 31, 2025, India installed a record 29.52 GW of renewable capacity, bringing the total to 220.10 GW. Solar power installations surged to 23.83 GW, up from 15.03 GW the previous year.
The country currently has 169.40 GW of renewable projects under construction and 65.06 GW in tender.
India aims to reach 500 GW of non-fossil fuel power capacity by 2030.
Looking ahead, power demand and renewable energy development are expected to grow strongly. The U.S.-based Rocky Mountain Institute (RMI) said last month that if India secures sufficient financing, its clean energy transition could cut more emissions by midcentury than Europe and North America combined, setting an example for other emerging economies.
Finland’s Center for Research on Energy and Clean Air (CREA) also highlighted India’s vast renewable potential. With 234 GW of renewable capacity in the pipeline, India can reduce pressure on coal as solar power dominates peak demand hours.
“India’s power sector stands at a critical point, marked by record-high capacity and a rapidly changing energy mix,” CREA analysts said.
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