Why 13 Million Jobs and Grid Stability May Define the Future of Coal in India

India’s goal of becoming a $30 trillion economy by 2047 will rest on higher economic growth, with rising energy demand from multiple sectors in the future. Electricity has become a preferred source of energy. India’s 2070 Net Zero Emissions goal requires a significant reduction in dependence on thermal coal (used for power generation), with the expectation of a tremendous scale-up in Renewable Energy Sources (RES) such as Solar, Wind, Small Hydel, biomass and other low-carbon emission sources - Nuclear and Large Hydel.

This poses three challenges: establishing timelines towards 2070 for scaling up electricity to match development, creating business models to fund capacity in RES (with storage, etc) and Nuclear to match electricity demand, and rehabilitating coal economy-based communities.

Coal - Supporting the Economy and Livelihoods

The coal economy accounts for more than 13 million direct and indirect jobs in the country. Coal provides energy security by reducing import dependence, unlike crude oil (82% imported) and natural gas (45% imported).

RES (Solar, Wind) technologies, too, are significantly import-dependent. Coal contributes to government revenues through taxes, cesses and royalties, and railway transport revenues, among others.

The dependence of household incomes on the renewable energy sector value chain is lower than in the coal sector, even though it is expected to increase.

The people-centricity of the coal sector and social and economic dependence on coal mines make it imperative to examine energy transition and the future of coal from a “people, life and livelihood” perspective, as India moves simultaneously towards Viksit Bharat @2047 and Net Zero @2070.

Our modelling efforts seek to understand the energy mix that will emerge in the future as India becomes a global leading economy with an equity-based growth approach.

Rather than focusing solely on the complete replacement of coal, discussions on making coal-based generation cleaner through technology upgrades—such as ultra-supercritical plants, carbon capture, and coal gasification—would significantly benefit India's net-zero commitment in the coming decades. Considering the gestation period, life of assets and cost optimisation, planned investments in coal and RES must start now.

Rising Demand for Electricity

Ashoka Centre for a People-centric Energy Transition (ACPET)’s macroeconomic modelling framework, using sector-based regression structures, identifies certain direct variables that establish a causal relationship between GDP growth and electricity consumption.

In the model, the CAGR of GDP is assumed at 7% until 2047, then moderated to 5% until 2070. Adding best-case assumptions of 15% improvement in electricity consumption efficiency and T&D losses reducing to 6%, electricity demand is expected to rise 15 times to reach 22,708 billion Units (BU) by 2070 (refer to Figure 1).

Increased automation, electrification of farming processes, increase in manufacture of steel, cement and high-end technology products, increase in electric vehicle adoption and Internet use, digital transactions, investment in artificial intelligence, data centres, global capability centres, increased sales of home appliances, growth of urban high-rise real estate, commercial and warehousing, etc, is likely to push electricity consumption exponentially towards 2070, lending credibility to ACPET’s scenario of potential demand for electricity over the next five decades.

Coal Demand and RES

How would India plan to meet this potential growth and equity-driven future electricity demand? The gross electricity generation in 2024 was 1824 BU. If this demand is expected to rise five times by 2047 and 15 times by 2070, and we are to achieve net-zero economy status by 2070, the share of RES will have to increase significantly from the current 14% level. The moot question is whether RES can rise to that extent while balancing our ecological needs for land, water, and other

circular-economy-based resources, complemented by adequate storage and seamless grid transmission and integration capacities.

Figure 2 (below) shows one possible scenario for the generation mix, in which generation from RES (Solar, Wind, small hydro, biomass) would need to rise sharply to take over a larger share of the generation mix from steam (coal).

Under the ACPET model, increasing the share of RES in electricity generation from the current 14% to 63% by 2070 would still require thermal coal of around 3.8 billion tonnes by 2070. In the most optimistic scenario of a 77% share of RES in electricity generation, thermal coal demand will remain large in the mix, rising to about 1.7 billion tonnes by 2055 and then dropping to 1.6 billion tonnes by 2070, as reflected in Figure 3 below.

A complete coal phase-down is not envisaged even in 2070, given grid stability requirements. Even with 77% RES share in generation, thermal power plants (TPPs) operating at minimal capacity would be required for critical ancillary services such as frequency regulation, voltage support, and dispatchable backup, which battery storage and renewables may not fully replicate at scale by 2070.

Overcoming the challenge of just energy transition with futuristic preparatory measures

Coal economy diversification: The expected dip in thermal coal demand by the 2060s gives sufficient time to plan for reskilling several lakhs of formal and informal coal economy workers, training them for jobs in sunrise energy sectors: factories manufacturing PV cells, battery cell technology, erection of towers, operation and maintenance of solar and wind farm apparatus, coal gasification, etc. Productive employment opportunities will lend heft to a just energy transition, supplemented by resettlement packages for households from coal-based communities and for communities displaced by renewables such as Solar, Wind, and Hydel projects.

Equity in Access to Electricity: GDP growth should translate to better living standards across all segments of society. Data centres, airports, and commercial/industrial complexes should not reduce power availability to households due to infrastructural constraints. The Gati Shakti National Master Plan portal can be used for coordinated planning of generation, transmission, and distribution. Mapping existing and potential transmission lines, TPPs and RES generating centres, and potential consumption centres such as industrial corridors, real estate projects, airports, etc., will enable states to integrate information on distribution networks, existing and required. This portal can transform into a prospective planning portal, mapping demand for industries, data centres, industrial corridors, smart cities, real estate, specific new loads, etc., over a 2-3-decade period to enable timely planning of generation, storage, and transmission by private and public sector players. This will enhance market confidence and enable efficient investments, likely of a large magnitude.

Affordable power for all: The boom in RES is viewed as the availability of cheaper power, as the cost of PV modules plummets. However, in the long term, RES will require investment in storage, grid integration, and distribution networks, thereby increasing electricity costs. Timely planning and upscaling investments to reduce overheads can reduce the burden of electricity costs for all users. The current state of generation losses due to inadequate transmission infrastructure for RES must be avoided if India intends to phase down coal by 2070 without affecting development and living standards. Renewable energy components such as solar cells (polysilicon, wafers, PV cells), battery storage (Lithium, Li-Ion battery cells), magnets, etc., are import-dependent. Secure supply chains with appropriate indigenized capacity will catalyse the Net Zero@2070 path. Industries should be mandated to invest in R&D centres in educational institutions to create a large, skilled talent pool and much-needed job opportunities. This would ensure the timely scaling up of RES with storage, new clean energy technologies, and cost optimisation.

Way Forward

A slow but consistent rise in coal demand over at least the next three decades is an essential finding for policymakers. Early and deliberate action on safety nets, labour transitions, and regional diversification of job opportunities will ensure equity in growth.