Power sector in 2030
India’s power system is heavily reliant on coal with an estimated emission intensity of around 632 gCO₂/kWh in 2019, with coal providing almost three quarters of all electricity. Recent years have seen a drop in this intensity, which stood at over 800 gCO₂/kWh for most of the last two decades.,,
India’s current installed coal capacity is more than 200 GW, and according to recent projection of Central Electricity Authority this will increase to 266 GW by 2029-30. By contrast, Paris Agreement compatible pathways see coal phased out of power production in the mid-2030s driving the full decarbonisation of the power sector by around 2040. This means that any plant built today would risk turning into a stranded asset quickly in a 1.5°C scenario. In its National Electricity Plan of 2018, India had initially planned to retire a total of 45 GW coal powered plants between 2017-20278, but this has been revised to retire only a total of 25 GW between 2017-2027.
Renewable power is starting to take hold in India, and at the federal level, the government has a target of 175 GW total renewable power capacity by 2022 (100 GW solar PV, 60 GW wind, 10 GW bioenergy and 5 GW small scale hydropower). India further aims at reaching 450 GW by 2030 and is expected to achieve a generation share of 40-43% in 2030. While India has increased its renewables installed capacity to 151GW in December 2021 from 39 GW in 2015, coal based power generation is still increasing at an annual average rate of 6% since 2015.,
However, for a Paris Agreement compatible pathway, India would need a share of renewable energy of 70-79% by 2030 and around 90-98% by 2040, equivalent to increasing from 1 EJfinal (0.3 PWh) in 2019, to 2 EJfinal in 2030, and 5-11 EJfinal in 2050. A share of non-fossil power generation of 70-80% in 2030 translates to around 80-90% share in non-fossil electric capacity.
To achieve these levels India could strengthen its renewables targets, replacing the current plan for coal power plant additions. Phasing out fossil fuel subsidies, combined with the fact that new solar PV is now significantly cheaper to build in India than new coal power, would provide additional economic signals.
Towards a fully decarbonised power sector
In the analysed 1.5°C pathways, India’s power sector reaches full decarbonisation around 2040 through a phase out of coal and gas by around 2035. In 1.5°C pathways reaching high renewable shares later, the power sector starts contributing negative emissions from the 2020s reaching up to 12% (of electricity produced) by 2050. This will contribute in abating around 0.2 GtCO₂, to balance earlier emissions and/or in other sectors. Higher penetration of renewables would reduce the country reliance on carbon dioxide removal technologies and the related investment costs.