Renewable Energy

National Electricity Plan: No coal expansion, renewable capacity to dominate in India by 2031-32

Emissions from power sector in a decade expected increase by 10 million tonnes; efficienty of plants to be improved

By Anubha Aggarwal, Sowmiya Kannappan
Published: Tuesday 06 June 2023
Renewable energy capacity is expected to double the current levels and surpass coal capacity by 2031-32. Photo: iStock

India will not add any new coal capacity in the next five years, except for the plants already at various planning stages. The latest National Electricity Plan for 2022-32 (NEP) was released May 31 by Union Ministry of Power (MoP). The MoP revisits the NEP every five years to forecast the country’s power generation, transmission and demand trajectory for the coming decade.

The NEP announced plans to increase the overall contribution of non-fossil power generation. Its capacity will be hiked to 68.4 per cent from 40 per cent at present by 2031-32.

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The NEP considered four scenarios for energy generation in the country. In them, coal capacity continues to grow till 2031-32, albeit by a small margin compared to the growth in renewable installed capacity.

Coal-based power capacity will vary from 19.1 gigawatt to about 27.1 GW across various scenarios. On the other hand, renewable energy capacity is expected to double the current levels and surpass coal capacity by 2031-32.

The capacity additions forecasts considered the impact of factors like energy efficiency, penetration of electric vehicles and production of green hydrogen on peak and energy demands.

Share of different fuels in India’s energy mix in megawatt













Renewable energy sources








Total capacity




Source: Author compiled; Data: NEP 2022-32


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Percentage capacity of energy sources

Carbon dioxide emissions

The NEP projected the total carbon dioxide (CO2) emissions from power sector in a decade will increase by 10 million tonnes (MT) from the CO2 emissions in 2021-22. One of the ways the NEP proposed to reduce emissions from the power sector is by improving the efficiency of plants.

The NEP suggested the establishment of the Indian Carbon Market to help the country reach the nationally determined contribution goal of reducing emissions intensity of the gross domestic product by 45 per cent by 2030 against the 2005 level. 

It is evident that the ICM is being framed similarly to the Perform, Achieve and Trade (PAT) scheme, according to discussions between New Delhi-based think tank Centre for Science and Environment (CSE) and the Bureau of Energy Efficiency (BEE) officials.

PAT is a regulatory instrument to reduce specific energy consumption in energy-intensive industries. 

Coal-based thermal power plants under the PAT scheme had reduced only 1-2 per cent of their overall CO2 emissions, a 2021 study by CSE established. The report pinned the reasons for this underachievement on non-transparency, loose targets and overlooked deadlines. 

A penalty of Rs 10 lakh was to be levied on violation of the PAT targets, the report added. However, it has been 10 years and BEE has, to date, not collected any fines from any of the defaulters. 

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A good example is the Gujarat Emissions Trading Scheme penalty mechanism, which may be adopted by the central government to keep a check on compliance by the power plants.

The scheme has a penalty mechanism of insisting industry / any organisation deposit an initial amount and upon non-compliance, regulators would deduct the amount automatically from the industries’ account.

Coal capacity for retiring 

Apart from adding more renewable capacity and increasing the efficiency of the coal-based power plants, the MoP has also identified 1,817.5 MW capacity that is likely to retire during 2022-32. The capacity to be decommissioned has also been compiled based on non-compliance with the emission norms. 

However, 16 per cent of the capacity planned to be retired due to non-compliance with emission norms was actually shut-down during 2017-2022.  

Coal requirement for electricity generation 

During 2022-23, the country faced a shortfall of 25 million tonnes of domestic coal, according to the NEP. The domestic coal requirement for power generation for 2026-27 is projected to be 866.4 MT and 1025.8 MT for 2031-32. 

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A roadmap has been prepared by the coal entity Coal India Ltd to avoid any shortfall in coal availability and reduce dependency on imported coal for power generation. 

Several other steps have also been taken by the government, such as allowing commercial coal mining and using captive coal blocks of power utilities to supplement the supply gap for domestic coal to power utilities. 

Coal requirement in MT





Domestic Coal Requirement 




Source: Author compiled; Data: NEP 2022-32

Compliance with emission norms

After deliberating in detail on fuel-based energy emissions, primarily coal, the electricity plan elucidates the difficulties in implementing the emission norms for coal-based thermal power plants that were introduced in 2015 by the Union Ministry of Environment, Forest and Climate Change. 

It has been seven years since the norms were introduced. However, as expected, the MoP has put the onus of violation of the sulphur-dioxide norms on disrupted planning due to impact of COVID-19 pandemic and unfamiliarity with flue gas desulphurisation (FGD) technology.

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FGD is a technology used to remove sulphur dioxide (SO2) from flue gases of coal-based power plants.

However, this does not explain why the compliance would only be 5 per cent to date when the MoP claimed the country can manufacture 70 per cent of the components for FGD. 

The latest NEP also stressed “uniform ambient air quality” instead of “uniform emission norms” for coal-based thermal power plants. The 2015 notification had enforced uniform emission norms. The plan further advocated for 10-15 years’ timeframe for phase-wise implementation of the norms. 

This may imply that another extension in the deadline for compliance with the emission norms may already be underway. 

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