India’s coal-fired power can surely be cleaner

Coal consumption is unlikely to peak before the mid-2030s, emissions will rise near term, making interim decarbonisation efforts urgent
| Photo Credit:
RAJESH N

Sustained economic growth necessitates a stable, growing electricity supply. Since 2021, India’s annual electricity demand has soared beyond forecasts, with FY27 projections met in 2025 underscoring the sharp consumption rise.

Meanwhile, electricity production contributes 39 per cent of India’s greenhouse gas emissions. Coal-fired plants have long underpinned India’s electricity supply and still generate over 70 per cent, magnifying the challenge of balancing economic growth with climate action. Though RE expansion is a key policy aim, the total installed capacity of coal-based thermal power will rise above 280GW, surpassing the National Electricity Plan’s (NEP’s) 2031-32 target.

Despite ambitious RE capacity additions, the intermittency problem will persist until storage scales up. Coal power will increasingly provide the base load of the power sector. Coal consumption is unlikely to peak before the mid-2030s, emissions will rise near term, making interim decarbonisation efforts urgent.

Gaps in coal fleet

Despite NEP’s vision of a declining role for coal, soaring demand has paused retirement plans, necessitating a pragmatic pivot towards optimising existing fleet for reduced emissions rather than solely relying on new RE addition. According to the Central Electricity Authority’s CO2 database, India’s 221-GW coal fleet is relatively young, with 57 per cent of capacity added in the last 15 years.

Performance efficiency of the technology deployed for generation and unit-level performance are key metrics for assessing decarbonisation potential. Efficiency is a percentage calculated by dividing the annual net electricity generated by the amount of fuel used, with an adjustment for the fuel’s energy content. Higher efficiency results in lower coal usage and reduced CO2 emissions for per unit of electricity.

Centre for Science and Environment’s (CSE’s) assessment, published in Decarbonizing the Coal-based Thermal Power Sector last month, revealed high variation in efficiency and emissions across the subcritical fleet. Around 80 per cent of the coal fleet operates on subcritical technology. Only 166 of 455 subcritical units exceed the national average efficiency of 32 per cent, and very few meet the technology’s efficiency benchmark of 35 per cent.

Interestingly, some units over 25 years old are among the better-performing ones, maintaining emission factors below 0.95 tonne/MWh, while one-fourth of the newer units emit over 1 tonne/MWh. High emissions stem from deeper performance gaps, not just age.

In the mid-2010s, India began transitioning to more efficient technologies, namely supercritical and ultra supercritical units, which can achieve peak efficiencies of 40 per cent and 44 per cent, respectively. Currently, all under construction capacity is based on these technologies. CSE’s assessment found subcritical plants have a higher average plant load factor (PLF) of 68 per cent, compared to 62 per cent for supercritical and ultra supercritical plants.

Notably, 24 per cent of these newer units remain underutilised, running below half capacity. Conversely, their higher capacity use delivers peak performance alongside high emission reductions. Technical inefficiency is only a part of the problem; systemic policy issues influence plant operations and utilisation levels. India’s Merit Order Dispatch system prioritises power generation from the lowest-cost sources. While the current policy reduces electricity prices, it overlooks environmental performance, often advantaging high emitting and pit head units above newer technology and low emitting units.

Discoms prefer purchasing from contracted units over open energy exchanges, regardless of environmental performance. The PPAs’ lack of efficiency-based remuneration, discourages upgrades, locking in emission intensive supply and integrating even new units into legacy PPAs. This system remains invisible to financially stressed Discoms and uninformed consumers, masking embedded environmental costs. Shorter PPAs with an environmental metric to the dispatch order are necessary interventions going forward.

Unlocking reductions

CSE’s report outlines three levers for emission reduction, i.e., achieving benchmark efficiency, shifting more generation to supercritical and ultra supercritical units, and accelerating biomass co-firing. Our decarbonisation analysis estimates, if the entire fleet operated at the benchmark efficiency of the best-performing units, emissions would fall by 157 million tonne (mt) from the BAU (business-as-usual) scenario of 1,332 mt by 2031-32. This reduction is equivalent to the total annual emissions of India’s iron and steel sector.

Shifting higher PLF to supercritical and ultra supercritical units would yield an additional 22.09 mt in emission reductions, equivalent to annual emissions of Sri Lanka or Bolivia, highlighting the carbon footprint embedded in India’s misaligned power dispatch.

Furthermore, biomass co-firing offers dual benefits, reducing emissions from the coal fleet and curbing pollution from crop burning. With 20 per cent biomass successfully co-fired at NTPC’s Tanda unit, scaling this approach nationwide is a logical policy progression. Together, these measures could reduce emissions by 433 mt, beyond the combined annual emissions of India’s iron and steel and cement sectors.

As the Indian Carbon Market prepares to launch in 2026, it excludes the country’s largest CO2 emitter, the power sector. The Supreme Court’s nudge in Ridhima Pandey vs Union of India, for a roadmap to reduce power sector CO2 emissions comes at an opportune moment. Policy must adopt aggressive emission intensity targets, complemented by systemic reform in dispatch and generation practices. Decarbonising coal power can significantly aid India’s climate goals.

Kumar and Goyal are members of the Sustainable Industrialization unit at Centre for Science and Environment, New Delhi

Published on August 7, 2025

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}