Whalesbook
Global Energy Landscape Shift
The global trajectory of coal power, which historically underpinned industrialization, is showing signs of recession. Developed nations have seen consumption decrease by approximately half from its peak two decades ago. While China absorbed much of this decline, its coal-fired power generation also experienced a decrease of about 1% last year, despite a 5% rise in electricity usage. The International Energy Agency (IEA) has revised its outlook, now forecasting a decline in China's coal demand by 180 million tons through 2030, a reversal from earlier predictions of record-breaking consumption.
India's Coal Power Ambitions Under Pressure
India remains a notable exception with projected coal consumption increases through 2030, according to the IEA. However, even here, the feasibility of expanding coal capacity is being questioned. The government's aim to add 97 gigawatts (GW) of coal power by 2035 faces considerable obstacles. As of late 2025, only 35.5 GW of this total had received financial approval, and a mere 16.3 GW had commenced construction. Approximately 22 GW of planned capacity has reportedly been abandoned due to regulatory, political, or financing complexities. Industry observers note that achieving the 97 GW target would require approving new plants at an improbable pace of one every ten days over the next two years. Projects in non-power sectors, such as coal gasification, are also experiencing prolonged delays, with the Talcher plant, for instance, still only about two-thirds complete 11 years after its announcement.
The Ascendancy of Renewable Energy in India
Simultaneously, India's renewable energy sector, led by solar power, is experiencing substantial growth. SBI Capital Markets forecasts that solar installations could reach 50 GW in 2026. This rapid deployment is crucial for meeting Prime Minister Narendra Modi's objective of achieving 500 GW of clean power capacity by 2030. Projections suggest that current clean power build-out rates alone could satisfy approximately 97% of India's projected demand growth up to 2030, potentially negating the need for significant new coal capacity. Existing fossil fuel generators, which are underutilized, could be ramped up to meet residual demand. Last year, coal power generation in India fell by approximately 3%, with increased clean generation accounting for a substantial portion of this decline. This marks a significant development, as it represents the first time in half a century that coal generation has decreased in both China and India concurrently.
Investor Confidence and Capital Allocation
The challenges in executing new coal projects and the increasing competitiveness of renewables are influencing investor sentiment. Private capital is reportedly growing more cautious about investing in large-scale coal ventures, especially those dependent on state stimulus. Approximately 80% of coal plants currently under construction are state-owned, indicating a reliance on public funding and potentially deterring private investment due to project risks and delays. Financial institutions like SBI Capital Markets have indicated that the government is unlikely to meet its new coal targets, further underscoring the evolving dynamics of India's energy sector.