Powering a 1.4+ Billion Person Economy

Mobius Intel Brief

• Internal documents from India’s Ministry of Power forecast annual power consumption will grow 9.3% to 1,900 TWh in FY 2024-2025 (Apr ‘24 - Mar ‘25).

• India’s generation resource mix has skewed heavily toward coal-fired thermal generation, trailed by a growing wind and solar fleet.

• Takeaways: Coal remains India’s generation resource of choice as officials commit to transforming the world’s fastest-growing major economy into a developed nation by 2047. Meanwhile, as coal-fired power plants fall further out of political favor and Western regulations on Scope 3 emissions expand, India will likely face pressure to pursue alternative thermal generation technologies to balance manufacturing growth and intermittent renewable output. India’s investments in natural gas infrastructure will support increased demand for supplies from the U.S., Middle East, and Australia. Still, coal-fired generation will likely remain India’s backstop resource due to plentiful domestic reserves and proximity to the world’s largest coal exporters.

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Powering a 1.4+ Billion Person Economy

According to internal documents and Reuters sources, India’s Ministry of Power expects power generation to grow at the fastest rate in more than 15 years in fiscal year ‘24-’25, gaining 9.3% YoY to 1,900 terawatt-hours (TWh).

Despite the record increase in power output, Indian officials will likely see more challenges when accommodating electricity consumption growth in the world’s fastest-growing major economy.

According to Ministry of Power data, India’s power supplies have failed to meet peak power demand in 100% of months on record.

Sources and internal documents from the Ministry of Power project coal-fired output gaining 8.9% YoY, natural gas-fired output +10.5%, renewable output +8.2%, hydro output +10.3%, and nuclear output +16%.

While coal-fired generation isn’t expected to grow at the same rate as other resources, its outsized share of India’s generation mix means overall output will continue to set annual records.

During the March ‘24 heatwaves, coal generators increased power production to a record of 113 TWh from 103 TWh a year ago, accounting for over 80% of India’s total generation for the month.

India’s meteorological agency expects above-average precipitation in this year’s monsoon season, easing pressure on thermal resources as hydropower recovers from low reservoir levels.

Beyond this year, India’s coal-fired generation will likely receive more scrutiny from Western policymakers who elected to shut coal power plants by the mid-2030s at the G7 ministerial meeting this week.

Anti-fossil fuel regulations, such as the EU’s mandates on supply chain emissions, complicate India’s plans to expand manufactured exports to the West. According to Indian officials, the nation’s priority is meeting the Hierarchy of Energy Needs and becoming a developed economy by 2047 — not eliminating coal-generated emissions.

Western policies must weigh the consequences of restricting India’s energy affordability, reliability, and scalability against diversifying supply chains away from China.

Ultimately, market-driven demand for high-quality, inexpensive manufactured goods will support India’s adoption of alternative thermal resources like natural gas or nuclear.

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