Global research firm BMI Research in its latest report has said that coal, which powers around three-quarters of India's electricity, will remain the foremost fuel choice for country’s power sector and is expected to account for nearly 68 percent of the total power mix by 2026. It noted that the power sector is also likely to spur as a result of greater demand for fuel driven by underlying economic growth, electrification efforts and power sector reform implemented by the government.
The research arm of the Fitch Group has stated that the key mining sector reforms, over the previous two years has significantly improved the availability of coal for the power sector. However, it also said that the volatility in feedstock will remain a downside risk to coal-fired power generation over the coming years. Adding further, the report said that in the month of August, Coal India announced that out of 120 ongoing projects, 62 coal mining projects were not running on schedule mostly due to postponement in land acquisition, issues related to rehabilitation and resettlement (R&R) and forest clearances.
The Research firm further said that over the next decade, the share of hydro-power in the Indian power mix will reduce marginally from around nine percent currently to just over seven percent in 2026, this is despite annual average growth rates in hydro-power generation of 3.8 percent. It also noted that this is due to other sectors, such as coal and gas, outpacing the hydro-power sector in terms of generation growth. It also mentioned that there are a number of large-scale hydro projects under construction and in the advanced planning stage, and added that the government has taken a number of initiatives to accelerate their development.