India Shifts to Renewables as Fossil Power Falls After Hormuz Disruption — Here’s Why

Global fossil fuel-based power generation fell by around 1% year-on-year in March, marking the first full month after the onset of the Hormuz blockade. The decline was led by a sharp 4% drop in gas-fired power generation, while coal-fired generation remained broadly flat.

As the fragile US-Iran ceasefire enters its second week, there remains considerable uncertainty about the humanitarian crisis in West Asia and the global energy system. This is especially true after problems in the Strait of Hormuz, which is a key route for oil and gas around the world.

Significance of Strait of Hormuz

The Strait of Hormuz is a crucial channel for global oil and gas trade. he route is also vital for transporting food, medicines and technological supplies to the Middle East.

It is only about 50 km (31 miles) wide at its entrance and exit, and about 33 km wide at its narrowest point. It is bordered by Iran to the north and Oman and the United Arab Emirates (UAE) to the south. The strait is used by major Middle Eastern oil and LNG producers, as well as their customers.

The US Energy Information Administration (EIA) says that in 2025, about 20 million barrels of oil and oil products went through the Strait of Hormuz every day. That is about $600bn (£447bn) worth of energy trade every year.

India's Response to Energy Shift

India is responding by accelerating renewable energy adoption, reducing coal dependence, cutting imports and strengthening policy support to improve energy security.

Along with the United States, South Africa, Turkiye, Germany and the Netherlands, India recorded the largest declines in coal-fired power generation in March.

As reported by Down To Earth, rapid expansion of solar energy emerged as the single largest driver behind the reduction in fossil fuel-based power generation in both India and the US. This trend reflects the increasing competitiveness and scalability of renewables in meeting incremental electricity demand.

Coal trade data further underscored the shift. Seaborne coal shipments to India fell by 9% in March, contributing to a broader 3% decline in global coal transport volumes. This drop pushed overall seaborne coal trade to its lowest level since 2021, signaling weakening import demand even amid global energy uncertainty.

Why Fossil Fuel Power Generation Declined

Fossil fuel power generation is declining primarily due to rapid growth in renewable energy capacity (solar and wind), which is now outpacing demand growth in key markets like China and India.

Improved energy security concerns, high fuel costs and rising carbon emissions are driving this shift, with renewable energy directly replacing, rather than just supplementing, fossil fuel output during energy crises.