Indias solar boom keeps coal use in check so far in 2025: Maguire

(The opinions verbalized hither ar those of the author, a editorialist for Reuters.)

By Gavin Maguire

LITTLETON, colorado river, June 10 (Reuters) - Surging electricity output from solar farms has led to a rare decline in fossil fuel power production in India so far in 2025, and is setting the stage for a potential drop in annual coal-fired power output in the world's second-largest coal consumer.

A record 32.4% jump in solar generation during January to April from the year before has helped utilities to lift overall electricity supplies while keeping coal-fired generation flat and cutting natural gas-fired output by 27%, Ember data shows.

With January through April typically marking the peak in India's annual coal generation, continued high solar power production through the coming months may allow utilities to cut full-year coal use in 2025 for the first time since 2020.

SOLAR SHINES

India's electricity generation from solar farms was a record 57.8 terawatt hours (TWh) during January to April, according to Ember.

That total was nearly a third more than during the same months in 2024, and came on the back of a roughly 30% climb in installed solar generation capacity over the past year.

Higher solar generation levels in turn lifted solar power's share of India's electricity generation mix to a record 10% during March and April, compared to an average of 7% for 2024.

Overall clean power generation in India climbed by 23% during January to April from the same months last year, and helped clean power sources score a record 23.3% share of India's total electricity production so far this year.

FOSSIL CUTS

With supplies of clean electricity at record highs, India's utilities were able to trim generation from fossil fuel-fired power plants by around 0.5% so far in 2025 compared to January to April of 2024.

That fossil use reduction is modest compared to the more than 20% annual expansion in clean power supplies.

But given the rapid pace of energy demand growth in India, it is rare for utilities to post anything other than strong yearly expansions in fossil fuel power deployment.

Indeed, the last time fossil fuel power production declined during January to April from the year before was in 2020, when India's economy was struck by COVID-19 lockdowns.

Going forward, fossil fuels will remain the main pillar of India's power generation system, and will supply around 75% of the country's electricity.

What's more, coal will remain by far the dominant single power source in the country.

However, with clean power supplies growing at an average pace of around 10% a year since 2020, India's overall electricity generation system will continue to get incrementally cleaner.

And as clean power supply growth can often exceed overall electricity demand growth, power producers may have scope to cut back on fossil output during periods of softer power demand.

SEASONAL PEAKS & TROUGHS

One of those softer demand periods may lie ahead, as India's utilities have cut fossil fuel production during the May through August period from the levels of the opening four months of the year in five of the past six years.

A key driver of this fossil fuel downturn is the seasonal swell in hydro power production from May onwards, due to India's monsoon rains which replenish the country's dams and reservoirs.

Between 2019 and 2024, the higher mid-year precipitation levels resulted in a more than doubling in monthly hydro electricity supplies between May and August.

Forecasts for the 2025 monsoon are calling for above-average rains, with rain totals expected to be around 6% above the long-term average.

On top of that, utilities can expect additional clean power supplies from solar farms over the summer, which continue to expand in generation capacity every month.

That combination of higher hydro output alongside record solar generation could entice India's utilities to make further curbs to coal generation over the coming months, and set the stage for a rare year-over-year reduction in overall coal use.

The opinions expressed here are those of the author, a columnist for Reuters. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X.

(Reporting by Gavin Maguire; Editing by Stephen Coates)

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