India Is Burning More Coal as Extreme Heat and the Iran War Squeeze Energy Supplies

Why It Matters

The rebound in coal use threatens India’s climate targets and raises global CO₂ emissions, while also exposing energy‑security risks from geopolitical tensions and climate‑driven demand spikes.

Key Takeaways

• Coal generation hit 164.9 GW in April, up 3.5% YoY.
• LNG price surge pushes gas plants 1.5 GW below 2025 target.
• Heatwave drove demand; all 50 hottest cities now in India.
• Cement firms replace petcoke with coal amid Middle‑East supply cuts.

Pulse Analysis

India’s power sector remains anchored in coal despite a rapid expansion of renewable capacity. By the end of 2025, non‑fossil sources accounted for just over half of installed capacity, yet coal‑fired plants still provide roughly 70% of electricity. The April surge to 164.9 GW reflects a confluence of factors: record‑breaking heatwaves that pushed temperatures above 45 °C in multiple regions, and a sharp rise in liquefied natural gas costs following the Iran‑Israel conflict that choked gas imports through the Strait of Hormuz. Utilities responded by dispatching coal units, which are less sensitive to fuel‑price volatility, to meet peak demand.

The geopolitical shock also disrupted petroleum‑coke supplies, a key feedstock for cement kilns. With petcoke prices spiking, cement manufacturers have turned to coal as a substitute, adding another layer of demand to the already strained coal market. This substitution underscores how supply‑chain shocks in one fossil‑fuel segment can cascade across industries, amplifying coal’s role in the short term. Moreover, the limited share of gas‑fired generation—only about 4% of capacity—means the system lacks flexibility to offset coal during extreme weather events.

From a policy perspective, the uptick in coal usage complicates India’s climate commitments, notably its pledge to slash emissions intensity by 47% by 2035 and achieve net‑zero by 2070. If an El Niño event materializes, analysts project a potential 10% year‑over‑year increase in coal generation, further widening the emissions gap. The situation highlights the urgency for accelerated grid modernization, greater storage integration, and diversified import strategies to reduce reliance on geopolitically sensitive fuels. Without decisive action, short‑term energy security could come at the cost of long‑term climate goals.