India’s increasing reliance on coal amid energy supply disruptions and a severe heatwave is raising concerns in the global energy market. As the world’s third-largest carbon dioxide emitter, India generates over 70% of its power from coal-fired plants, a figure that is expected to rise this year. Recent data indicates that coal-fired power generation increased to an average of 164.9 gigawatts in April, up from 160.7 gigawatts last year, while gas-fired generation remains below 2025 levels due to high LNG prices.
The surge in electricity demand, driven by extreme temperatures, is not only affecting the power sector but also industries like cement, which are substituting petroleum coke with coal due to supply disruptions. This shift underscores the ongoing challenges in balancing energy needs with environmental commitments, as India aims to reduce emissions intensity by 47% by 2035.
For market professionals, the implications are clear: the heightened demand for coal could impact commodity prices and investment strategies in the energy sector, particularly as India navigates its dual goals of energy security and emission reduction.
Source: cnbc.com