India is navigating a complex energy transition, balancing its rapidly escalating energy demand with ambitious climate commitments, a challenge emblematic of many developing economies. While the nation is home to pioneering clean energy projects, such as Gujarat’s Khavda renewable power plant, slated to deliver an impressive 30 GW of solar and wind capacity by 2030, coal-fired power plants, like the 3 GW facility in Chandrapur, Maharashtra, continue to underpin over 60% of the national grid.

This duality underscores India's primary energy dilemma: reconciling the imperative for sustained economic growth and universal electricity access with its increasingly stringent decarbonization goals. Unlike many developed nations, India's per capita energy consumption remains significantly below the global average, making electricity provision a fundamental development objective. Decades of targeted government programs have propelled electricity access from 60% in 2000 to near-universal coverage today, with power shortfalls reduced to less than 1%. This electrification drive has, however, been predominantly fueled by coal, leading to the electricity sector accounting for over half of India’s greenhouse gas emissions, positioning the country as the world's third-largest emitter.

Despite this, India has emerged as a proactive climate leader. Its 2015 Nationally Determined Contribution (NDC) pledged 40% non-fossil electricity capacity by 2030, a target subsequently raised to 50% in 2022, alongside a net-zero emissions goal for 2070. Since 2015, India’s renewable energy capacity has expanded at an annual rate of nearly 20%, surpassing 200 GW in 2024. However, as global efforts intensify to limit warming to well below 2 degrees Celsius, attention remains focused on India, where emissions are still rising.

The paradox of India's energy strategy lies in the continued construction of new coal plants despite the plummeting costs of solar and wind power. On a Levelized Cost of Energy (LCOE) basis, renewables are now demonstrably cheaper than coal, and even variable operational costs for solar often undercut coal. Yet, the decision to maintain and expand coal capacity extends beyond simple LCOE comparisons. Factors such as grid stability, dispatchability, and the substantial sunk costs in existing coal infrastructure play a critical role. Intermittent renewable sources require significant energy storage and grid modernization investments to ensure reliable power supply, a challenge that coal, with its baseload capabilities, currently addresses more readily. Furthermore, the socio-economic implications of rapidly phasing out a deeply entrenched coal industry, including employment and energy security, contribute to its enduring role in India's energy mix.