India’s Renewable Reforms Lag as States Turn Back to Coal
Coal India
Delays in clean energy projects and slow battery storage growth are driving Indian states back to coal, with long-term contracts showing a prolonged dependence on fossil fuels.
By SANJAY SINGH
New Delhi, October 8, 2025 — India’s ambitious renewable energy reforms are taking longer than planned, forcing a number of states to revert to coal to meet surging electricity demand. Uttar Pradesh and Assam, both of which recently withdrew incentives for clean energy projects, are now exploring long-term power purchase deals with coal-fired generators by the end of this year.
Despite the central government’s sustained push to expand clean energy capacity, state electricity distributors are signing multi-year contracts with coal-based plants to meet evening and peak-hour power needs. The two states have already bid for around 7 gigawatts (GW) of coal-fired power to be delivered by 2030.
This comes on top of more than 17 GW of coal capacity contracted over the past 16 months—the largest such pipeline since the Covid pandemic, according to India Ratings & Research.
Other states, including Madhya Pradesh, Tamil Nadu, and Bihar, have cited persistent delays in renewable projects as they opt for new coal-based generation. The challenge, analysts say, lies in grid instability caused by the intermittent nature of renewables and the shortage of scalable battery storage solutions.
While building renewables with storage is already cheaper than constructing new coal plants in India, the transition remains slow. The Institute for Energy Economics and Financial Analysis (IEEFA) reported in August that India has auctioned 12.8 gigawatt-hours (GWh) of battery storage projects, but only 219 megawatt-hours (MWh) are currently operational.
Industry experts warn that rising air-conditioning demand during non-solar hours and the sluggish rollout of storage technology are driving a new wave of coal investments—threatening to slow down India’s decarbonisation trajectory.
For now, coal remains deeply entrenched in India’s energy mix. The government projects coal power capacity to rise 46 percent—from 210 GW today to 307 GW by 2035—even as it targets 500 GW of non-fossil fuel capacity by 2030, nearly double the current 251 GW.
In the race between renewables and coal, the old guard is still holding its ground.
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