India is burning more coal as extreme heat and the Iran war squeeze energy supplies
India is increasing coal usage to meet rising electricity demand driven by extreme heatwaves and higher liquefied natural gas prices. The economic unviability of gas-based power has shifted the burden to coal-fired generation during peak summer months. Projections suggest coal-fired power generation could grow by 10% year over year if El Niño conditions develop.
- ▪Electricity demand in India has surged due to widespread heatwaves, with all 50 of the world's hottest cities recorded in India on April 27.
- ▪Higher liquefied natural gas prices have made gas-based power generation economically unviable, increasing reliance on coal.
- ▪Gas-fired generation remains 1.5 average gigawatts below 2025 levels, highlighting coal's growing role in the power mix.
- ▪The Indian government forecasts heatwave conditions across Northwest, Central, West, and East Coast regions in May.
- ▪El Niño's potential development could lead to a 10% year-on-year increase in coal-fired power generation in India.
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The higher liquid natural gas prices have also made gas-based power generation economically unviable, said Girish Madan, director of corporate ratings at Fitch Ratings in Singapore. "So, coal-based power needs to share a higher burden in these peak summer months," he added.Electricity demand in India is rising as temperatures surge amid heatwaves. On April 27, data compiled by New Delhi-based air quality and temperature monitoring platform AQI showed that all 50 of the world's hottest cities were in India."Heatwave conditions, with readings above 40-45 degrees C (Celsius), across several places in India have lifted power demand," Andre Lambine, lead APAC short-term power and renewables research at S&P Global Energy, told CNBC in an email.He added that while gas-fired generation rebounded…
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