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India’s power-sector carbon dioxide (CO2) emissions have declined for only the second time in half a century, marking an inflection point in the country’s energy transition, according to a new report.
The analysis also indicates that emissions from India’s power sector could peak before 2030 if clean-energy capacity and electricity demand grow as expected.
The report, by the Centre for Research on Energy and Clean Air (CREA) for Carbon Brief, a UK-based climate science and policy website, finds that power-sector emissions dropped by around 1 per cent year-on-year in the first half of 2025 and by 0.2 per cent over the past 12 months, despite steady growth in electricity demand. This is only the second recorded decline in about 50 years, excluding the pandemic-driven drop in 2020.
The milestone comes as clean-energy capacity additions outpaced electricity demand growth for the first time, preventing coal and gas generation from rising further. “This is a striking signal that India’s rapid clean energy build out is beginning to bend the emissions curve,” said one of the study’s authors.
The decline was underpinned by record additions of solar, wind, hydro and nuclear capacity. In the first half of 2025 alone, India installed 25.1 gigawatts (GW) of new non-fossil power capacity, a 69 per cent jump compared to the same period last year. This new capacity is expected to produce nearly 50 terawatt-hours (TWh) annually, which nearly matched the increase in overall power demand.
At the same time, milder weather and prolonged rainfall reduced peak electricity consumption, especially from air conditioners, while higher hydro generation helped fill the demand gap. As a result, total electricity output increased while fossil-based generation fell, cutting emissions even as demand rose.
However, the analysis warns that emissions from other industrial sectors such as steel and cement continue to rise sharply, climbing 7-10 per cent year-on-year in the first half of 2025 amid surging construction and infrastructure activity. Oil demand growth, by contrast, flattened after strong growth in previous years.
“While the power sector is beginning to show signs of peaking emissions, industry remains a major challenge,” the report said, calling for accelerated efforts on industrial decarbonisation through electrification, green hydrogen and carbon capture.
The report notes that India now has about 234 GW of non-fossil capacity in the pipeline, including 169 GW already contracted, 145 GW under construction and 65 GW under tender, along with 5.2 GW of nuclear power capacity under construction. If all planned projects are completed, India would be within touching distance of its 500 GW non-fossil power capacity target for 2030, needing only around 18 GW more.
This puts India on track to peak power-sector emissions before 2030, a milestone that could reshape its climate trajectory and strengthen its negotiating position globally.
Yet, risks remain. The report flags that India is simultaneously planning around 80-100 GW of new coal capacity by 2030-32, driven by concerns over grid reliability, peak loads from air conditioning during heat waves, and evening ramping challenges as solar share grows.
Demand-side uncertainties from weather and economic fluctuations could also affect whether clean energy additions continue to outpace demand. Moreover, if industrial emissions keep rising, overall national emissions may still increase even if power-sector emissions peak.
Experts said this turning point should serve as a catalyst to accelerate clean energy expansion and push industrial decarbonisation. “The trend is encouraging, but locking in new coal would risk reversing the gains. India has shown that clean power can carry demand growth—this momentum must be sustained,” the study noted.