The sunset test: Why India needs more coal-based power

Source: The post “The sunset test: Why India needs more coal-based power” has been created based on “The sunset test: Why India needs more coal-based power” published in “Financial Express” on 21st October 2026.

UPSC Syllabus: GS 3– Indian Economy

Context: India’s electricity demand is rising due to industrial growth, increasing cooling requirements and agricultural needs. According to the Central Electricity Authority (CEA), India may require 105–150 GW of additional coal-based power capacity by 2035, exceeding the earlier target of 97 GW, primarily to meet dependable night-time electricity demand.

Reasons for increasing coal-based power requirements

1. India’s electricity demand is expected to grow at an average annual rate of 6.4 per cent until 2030, according to the International Energy Agency (IEA).
2. Industrial activities, data centres, air conditioning and agricultural irrigation are increasing electricity consumption.
3. Peak power demand reached a record 260 GW on October 5, 2026, while demand during September and October remained above 250 GW on most days.
4. Solar power generation declines after sunset, creating a need for reliable electricity during night-time hours.
5. In May 2026, dispatchable generation reached 90 per cent of available capacity, leaving limited reserves to manage unexpected outages and demand spikes.
6. Coal-based power provides sustained electricity supply, and the CEA’s March 2026 assessment found pithead coal more economical than solar power combined with batteries for baseload supply under its assumptions.

Limitations of alternative energy sources

1. Battery storage may be insufficient to meet prolonged night-time demand because of limited storage duration, supply-chain constraints and rising costs.
2. Wind power depends on weather conditions and generally produces less electricity during summer months when cooling demand is high.
3. Hydropower generation fell by 20 per cent year-on-year in September 2026, highlighting the variability of its contribution.
4. Gas-based power generation is constrained by limited domestic fuel availability and expensive imported liquefied natural gas (LNG).
5. Nuclear power can provide dependable electricity, but capacity expansion beyond existing plans will take longer to materialise.

Implications for India’s energy transition

1. Additional coal capacity can strengthen energy security and reduce the risk of electricity shortages during non-solar hours.
2. Excessive dependence on coal can increase greenhouse gas emissions and create challenges for India’s climate commitments.
3. Coal plants will increasingly need to reduce generation when renewable power is abundant and ramp up output when solar generation declines.
4. Greater operational flexibility in thermal power plants is therefore essential to integrate larger volumes of renewable energy.
5. The CEA envisages 509 GW of solar, 155 GW of wind, 174 GW of battery and pumped storage, and 315 GW of coal and lignite capacity by FY36, with non-fossil sources accounting for 70 per cent of installed capacity.

Measures to reduce dependence on additional coal capacity

1. India should accelerate battery storage deployment and develop longer-duration storage technologies to meet electricity demand throughout the night.
2. Stronger transmission and distribution grids should be developed to improve the integration and distribution of renewable electricity.
3. Energy-efficient air conditioners and stronger efficiency standards can reduce peak electricity demand, with research led by UC Berkeley estimating that improved standards could avoid over 60 GW of peak demand by 2035.
4. Agricultural electricity demand should be shifted from evening hours to solar-generation hours through feeder solarisation and better demand management.
5. Coal plants should improve operational flexibility by adopting minimum technical load and ramp-rate requirements to accommodate fluctuations in renewable generation.
6. State governments should undertake regular resource adequacy assessments, plan electricity procurement and execute capacity contracts according to their specific demand patterns.
7. Annual revisions of power adequacy plans should account for changing demand, storage costs and renewable energy deployment timelines.

Conclusion: India needs to balance reliable electricity supply with its clean energy transition. While additional coal capacity may be necessary in the short term to meet night-time demand, faster storage deployment, stronger grids, energy efficiency and better demand management can reduce long-term dependence on coal. A flexible, affordable and diversified energy system is essential for India’s sustainable economic growth.

Question: India’s rising electricity demand and the limitations of renewable energy storage have renewed the need for coal-based power capacity. Discuss the reasons for this trend and suggest measures to ensure energy security alongside the clean energy transition.

Source: Financial Express