New Delhi: India stands to save nearly $66 billion in foreign exchange by phasing out thermal coal imports by 2029, according to a new report by Climate Risks Horizon. The report highlights that an aggressive push towards renewable energy—adding 50 gigawatts (GW) of capacity annually—could not only reduce import dependence but also ease pressure on the country's energy sector and currency reserves.

If India continues this expansion, total savings could reach approximately $173 billion between 2025 and 2034, the report said.

Coal Dependence Remains High

In the financial year 2023-24, India imported 206 million tonnes of thermal coal—around 20% of its total coal requirement—at a cost of $21 billion. Over the past decade, thermal coal imports have surged by 58%, while their monetary value has jumped by 124%, largely due to fluctuating global prices and the depreciation of the Indian rupee.

Thermal coal demand typically peaks in summer, driven by increased cooling needs. Between 2013 and 2023, India imported roughly 2,128 million tonnes of coal, with thermal coal’s share in total imports rising by 40%. This increasing reliance poses both physical risks—such as disruptions due to geopolitical tensions or natural disasters—and financial risks stemming from volatile energy markets.

Soaring Energy Demand and Climate Pressures

India’s energy demand is projected to rise further, driven by urbanisation, industrialisation, and wider use of electric technologies. Per capita electricity consumption rose from 957 kWh in 2013 to 1,331 kWh in 2022. Climate change has further stressed the power grid, with more frequent heatwaves pushing energy consumption higher.

Ambitious Renewable Energy Targets

To address these challenges, India has set an ambitious target of 500 GW of non-fossil fuel energy capacity by 2030. As of 2024, the country’s renewable energy capacity—comprising solar, wind, hydro, small hydro, and biogas—stood at approximately 203.18 GW, accounting for 46.3% of India’s total installed capacity of 452.69 GW.

In 2024-25, India achieved its highest annual renewable capacity addition of 24 GW. However, to meet its 2030 goal, the country needs to more than double this pace, reaching 50 GW of new capacity each year until 2027-28.

Coal Still Dominates the Energy Mix

Despite the growth of renewables, coal remains the bedrock of India’s energy system. In 2023, coal contributed nearly 79% of India’s total energy supply, with 69% used by the electricity sector alone. India’s per capita coal consumption is substantial, even though overall primary energy consumption—at 27.3 gigajoules—remains lower than that of developed nations.