Renewable energy expansion could save India US$ 66 bn by 2029

India has the potential to end thermal coal imports by 2029 by adding 50 gigawatts of renewable energy annually, according to a report by Climate Risk Horizons. This shift could save the country around US$ 66 billion between 2025 and 2029, with total savings possibly reaching US$ 173 billion by 2034. India has set a target of 500 gigawatts of non-fossil fuel energy capacity by 2030 and plans to add 50 gigawatts of renewable energy each year until 2027-28 to achieve this goal.

A new report by Climate Risk Horizons reveals that if India adds 50 gigawatts (GW) of renewable energy annually, it could completely eliminate thermal coal imports by 2029 and save around US$ 66 billion in foreign exchange between 2025 and 2029. The cumulative savings could rise to at least US$ 173 billion from 2025 to 2034. The report underscores the country’s heavy reliance on coal imports for electricity generation, with approximately 206 million tonnes of thermal coal—about 20% of total consumption—imported in 2023–24 at a cost of US$ 21 billion.

Between 2013 and 2023, thermal coal imports increased by 58%, and the monetary value surged by 124%, driven by volatile international coal prices and the depreciation of the Indian rupee. During this period, India imported roughly 2,128 million tonnes of coal, mainly for power production. Imports typically spike during the summer months due to rising electricity demand caused by increased cooling needs. Thermal coal imports have been growing steadily at 3.7% annually, amounting to a 40% increase since 2013.

The think tank highlights both physical and financial risks associated with dependence on imported coal. Physical risks include disruptions in coal supply due to geopolitical instability or natural disasters. Financial risks stem from unpredictable global energy prices, which can strain the finances of power producers and impact electricity consumers.

India’s energy demand is expected to grow further due to rapid urbanisation, industrial expansion, and the increasing adoption of electric technologies. Per capita electricity consumption rose from 957 kilowatt-hours (kWh) in 2013 to 1,331 kWh in 2022, and climate-induced heatwaves are further pushing up electricity usage.

In response, India has set a target of achieving 500 GW of non-fossil fuel energy capacity by 2030. As of now, the country has about 151 GW of solar and wind energy and around 200 GW when hydro, small-hydro, and biogas are included. The government plans to add 50 GW of renewable energy annually until 2027–28. In 2024–25, India achieved its highest-ever single-year renewable addition of 24 GW.