India to see rare coal-fired power dip in 2025, only third in 50 years: IEA

IEA said an early, strong monsoon could curb demand and lift hydropower, pushing coal-fired output down about 3% in 2025, even as coal capacity continues to expand

India is set to register only the third year-on-year decline in coal-fired power generation in five decades in 2025, as an early and strong monsoon season lowers electricity demand and boosts hydropower output, according to a report by the International Energy Agency.

 

Why is coal-fired generation expected to decline in 2025? 

This shift is expected to push coal power output down by about 3 per cent and cut total coal consumption by 1.2 per cent to 1,297 million tonnes (MT), even as coal continues to dominate the power mix.

 

How is coal capacity changing despite the fall in generation? 

 

Despite the rare fall, coal capacity in the country continues to expand. India commissioned or began trial operations at 20 new plants totalling 14 gigawatt (GW) in 2025, taking installed capacity to 495 GW as of August, including 223 GW of coal-based units.

 

What does the IEA project for coal’s share in the power mix by 2030? 

The report notes that while coal’s share in the electricity mix is projected to fall from 70 per cent in 2025 to 60 per cent by 2030, demand from industry is rising. Cement and steel output are driving increased coal use.

 

What policy moves is the government making on coal? 

On the policy front, the government has launched a coal exchange and is pushing coal gasification with a 100 million tonne per annum (MTPA) target backed by financial incentives. Meanwhile, total coal production stood at about 1,089 MT in 2025.

 

How does the report see overall coal demand trending to 2030? 

The report noted that overall coal demand is projected to grow 17 per cent to 1,522 MT by 2030, underscoring that even as the monsoon forces a historic dip in coal-powered electricity, India’s broader dependence on coal remains.