India power sector coal-fired generation jumps as hydropower slumps in October

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India coal power up in October

Highlights

Coal-fired power generation in India rises 25.7% year-on-year in October, lifting coal's share to 71.7% of the generation mix from 66.03% in September.
Hydropower output drops 26% in October, the steepest decline since February 2024, due to weak rainfall linked to El Niño, intensifying dependence on coal plants.
Renewable generation increases 34.7% to 26.61 billion kilowatt-hours in October, led by a 62% jump in solar, though clean energy's share slips to 15% from 17%.

October generation mix shifts toward coal

As reported by Reuters, government data and Reuters calculations based on daily figures from regulator Grid-India show coal-fired generation in India rises 25.7% in October from a year earlier. Coal's share in overall generation increases to 71.7% from 66.03% in September, marking the fastest annual growth in coal-based output in three years.

Hydropower generation declines 26% amid weaker rainfall linked to the El Niño weather pattern, the steepest drop since February 2024. The fall in hydro output adds pressure on coal-fired plants at a time when electricity demand is also rising on stronger industrial activity.

At one point in October, 100 of India's 191 coal-fired power plants are operating with critically low fuel stocks because of the surge in power demand. The supply situation later eases after the Indian government boosts coal supplies at a record pace to support higher electricity production.

Supply pressures ease as renewables grow

India's power shortages in September rise to 560 million kilowatt-hours, the highest level since August 2023. Those shortages ease somewhat toward the end of October, helped by higher coal generation and cooler weather.

Renewable power generation rises 34.7% to 26.61 billion kilowatt-hours in October, driven by a 62% jump in solar output. Even so, clean energy's share of overall power generation falls to about 15% in October from 17% in September, underscoring coal's larger role in meeting near-term demand.

India's overall electricity generation rises 21.1% from a year earlier to 172.53 billion kilowatt-hours in October, according to Grid-India data. The figures highlight how weather-related pressure on hydro supply is reshaping the country's generation mix despite continued growth in renewables.

In our earlier article on India’s September merchandise trade deficit, we noted that the gap widened to $30.21 billion as imports rose faster than exports. We highlighted that the larger import bill was driven in part by elevated crude oil prices amid geopolitical risks, while India also moved to diversify export markets through new and pending trade agreements.

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