India introduced 11.4 gigawatts (GW) of entirely new coal proposals in 2023, which is more than the newly proposed capacity in any year in the country since 2016, according to a new report from Global Energy Monitor (GEM).
"After what appeared to be a promising year for the beginning to phase down India’s coal power dependence in 2022, the lack of retirement planning paired with new coal capacity additions and proposals in 2023 indicated that coal power capacity is unlikely to be phased down anytime soon," stated the GEM annual survey on the global coal fleet released on April 11.
Coal accounts for about three-quarters of India’s power generation and its demand is seen to be rising despite the country’s renewables plans. India has seen spikes in peak demand for electricity in the last two years, even as it has struggled to add green power capacity in line with its goal of 500 gigawatts (GW) of non-fossil fuel capacity by 2030. India’s peak power demand in 2023 hit a record 240 GW, surpassing the government’s projection of 230 GW. This is expected to touch 256.5-260 GW in 2024-25. By 2030, India's power demand is likely to hit 350-400 GW.
In 2023, India commissioned 5.5 GW of new coal capacity, more than double the capacity commissioned in 2022 (2.0 GW). Of the newly commissioned capacity, 1.8 GW is privately owned and the remaining 3.7 GW is owned by government enterprises, either through public sector undertakings (PSUs), state enterprises, or joint ventures between the two.
Apart from commissioning new coal capacity, 2023 also saw a surge in the granting of permits and pre-permit approvals to coal projects, as well as an increase in the revival of long-stalled projects. In 2023, 10 coal-fired units across six power stations received environmental clearances, totaling 7.3 GW of newly permitted coal capacity for the year.
An even greater capacity of coal plant proposals moved forward in the permitting process, with 15.2 GW across 12 different plants receiving terms of reference (ToR) in 2023. The year also saw 2.2 GW of shelved capacity, all of which was privately owned, be reactivated into the permitting process. Only 0.2 GW of previously mothballed capacity was formally shut down in 2023, marking an eight-year low for annual retirements, according to the report.
"Along with the government’s pledge to double coal production within the next four years, these developments make it clear that, despite recent progress toward increasing India’s renewable energy capacity, the country has no intentions of phasing coal down or out," the report stated.
The states of Chhattisgarh and Uttar Pradesh have the largest operating coal fleets in India and are currently leading expansions in the country with 6.6 GW and 5.6 GW of proposed capacity moving forward in 2023 in each state, respectively.
Global coal fleet grows 2 percent in 2023
GEM stated that the global coal fleet grew by 48.4 GW, or 2 percent, in 2023 to a total of 2,130 GW, with China driving two-thirds of additions. China started construction on 70 GW of new coal plants last year, nearly 20 times more than the rest of the world combined.
Outside of China, the coal fleet also saw a small 4.7-GW uptick for the first time since 2019. Although new retirement plans and phase-out commitments continued to emerge, less coal capacity was retired in 2023 than in any other single year in more than a decade.
"One of the key indicators of growth in coal capacity — new construction starts — declined outside of China for the second year in a row and hit a record annual low since data collection began in 2015. In China, the exact opposite happened, with new construction increasing for the fourth year in a row and hitting an eight-year high," the report stated.
In 2023, the decrease in proposed coal outside of China was tempered by 20.9 GW of entirely new proposals, led by India (11.4 GW), Kazakhstan (4.6 GW), and Indonesia (2.5 GW), as well as 4.1 GW of previously shelved or canceled capacity considered proposed again.
The Group of Seven major industrial countries (G7) accounts for 15 percent (310 GW) of the world’s operating coal capacity. With the completion of new units in Japan in 2023, the G7 no longer has any coal in construction, but it is still home to one proposal in Japan and two in the US. The proposals are linked to carbon capture and other “clean coal” technologies and are effectively uncertain and expensive distractions from the urgent need to
phase out coal, the report stated. Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States form the G7.
The Group of Twenty (G20) nations is home to 92 percent of the world’s operating coal capacity (1,968 GW) and 88 percent (336 GW) of the pre-construction coal capacity, it added. The G20 comprises 19 nations – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United States – along with the European Union.
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