India's Coal Power Generation Declines for First Time in 5 Years

News India posts first coal power output fall in 5 years Singapore, 15 January (Argus) — India's coal-fired generation dropped for the first time in five years in 2025, underscoring a structural shift in the country's electricity mix that is reverberating across global coal markets. The country's coal-power generation declined by 3.4pc on the year to 1,247TWh in 2025, according to data from the Central Electricity Authority of India. This is the first decline since 2020, when coal-power output fell by 5pc to 914.74TWh from a year earlier, and is the second drop in at least half a century, according to think tank CREA. The coal power data does not include lignite-fired generation, which fell by 9.7pc to 31.32TWh in 2025. The decline comes as power output from hydro, renewable and nuclear energy rose to cater for an increase in power demand in 2025, highlighting the evolution of the country's generation mix as India aims to provide round the clock electricity to all households and industries and fuel its economic growth. The trend also underscores the weakness in coal consumption at utilities, one of the largest consumers of domestic and imported coal, impacting India's overall plans to boost local coal output. The country, one of the world's largest coal producers and the second-largest importer after China, produced 1.04bn t of coal in 2025, little changed from a year earlier, while supplies to utilities fell by 1.8pc from a year earlier to 816.25mn t, according to data from India's coal ministry. India pegs coal demand to rise to 1.5bn t/yr by 2030, although the drop in coal burn at power plants could prompt a review of the estimates given that non-coal generation capacity has dwarfed that of coal and overall coal supplies from the largest coal producer state-owned Coal India has fallen steadily. Imports have also declined largely been due to weak demand because the country is currently grappling with high domestic coal inventories. India imported 160.32mn t of thermal coal in 2025, down by 2.2pc from a year earlier, data from analytics firm Kpler show, marking the second straight year of declines. Seaborne coal suppliers are recalibrating their sales strategies because domestic surplus has weighed on demand from China and India, while Indonesia — the world's largest coal exporter — is undertaking policy tweaks to tighten supplies . "Uncertainty over supply and demand is dominating the market right now," said a Singapore-based coal trader. "No one knows when balance will return." The weak fundamentals have weighed on the market. Argus assessed the widely traded GAR 4,200 kcal/kg coal for Supramax vessels at $44.99/t fob Kalimantan on 24 December 2025 — the last assessment of the year. This was down by 71pc from its all-time high of $154.21/t in October 2021. Prices hit a more than four-year low of $39.40/t in June 2025 and have since hovered in a narrow range that some producers said barely covers costs. The slowdown in demand is weighing on overall seaborne market dynamics. India is sitting on a huge pile of domestic coal, partly denting the demand fundamentals for the seaborne market. Sellers of Indonesian coal, which accounts for bulk of Indian imports, also said competition is heating up in growth centres of southeast Asia because suppliers from all origins are exploring alternative markets. Indonesian supplies to southeast Asia likely surpassed exports volume to India for the second straight year in 2025, underscoring the changing trade flows. The restart of an imported coal-fired power plant on India's west coast could support the recovery in India's demand for seaborne coal, another trader said, but overall power sector demand remains subdued and similar utilities that run on seaborne coal are exploring the possibility of raising the share of domestic coal in their blend. Some suppliers are focusing on tenders and enquiries from industrial coal consumers, expecting demand from industries such as cement and steel to continue in line with economic growth. Generation mix Generation from renewable energy sources such as solar, wind and smaller hydroelectric projects rose in 2025, and output from large hydropower projects as well as nuclear power plants also increased. The prolonged monsoon period last year supported an increase in hydropower generation and also capped power demand for cooling. Renewable energy generation rose by 22pc from a year earlier to 270TWh in 2025, CREA said in its latest report, while overall generation from all sources rose by 1pc on the year to 1,844TWh. The pace of growth in overall generation has moderated over the last few years. Generation rose by 11pc and 6pc on the year in 2023 and 2024, respectively. Coal-power has declined but it still accounts for about 70pc of India's generation mix, and India would continue to be a dominant consumer of domestic as well as imported coal, market participants said. "Coal will remain an indispensable pillar of India's energy security, along with steady advances in its clean energy transition," the coal ministry said. Coal provides reliable baseload power and supports critical industries, and plays a vital role in sustained economic growth, it added. But the country may not require excess coal-fired capacity if it hits its target of more than doubling the renewable power generation capacity to 500GW by 2030, CREA said. "India's power-sector challenge is no longer one of capacity adequacy, but of system flexibility," Manoj Kumar, analyst at CREA, said, adding that an increase in generation from non-coal sources could lead to lower utilisation of coal-power plants while also raising the risk of stressing thermal assets. By Saurabh Chaturvedi India's generation mix (TWh) Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved. News Viewpoint: Coal plant extensions not always easy Houston, 14 January (Argus) — US generators are starting this year with more coal-fired power plants open than previously planned, following a series of US Department of Energy (DOE) emergency orders, but maintaining generation from these facilities might not be easy. Since late May, US energy secretary Chris Wright has signed orders to keep at least parts of five coal plants running beyond their planned 2025 retirement dates. These facilities have a combined generating capacity of 2,128MW. Wright also has indicated he may continue issuing such orders to address near-term reliability issues and potential energy supply shortages in the next few years. While some power plant operators may welcome the orders, others are more reticent. "I think the executive orders make for lots of questions in our current environment," one market participant said. "As with anything, there are lots of legal challenges that will arise, and it all could change again in a few years" under a new administration. The nature of the orders also raises logistical concerns that some power plant operators warned could affect their ability to comply. Last year, Wright issued the orders shortly before the facilities were scheduled to close. That kind of timetable can be challenging for plant operators who typically have spent months winding down fuel orders and making other preparations to permanently close a facility. The orders also have 90-day limits that can be extended, and Wright has not shied away from renewing directives to keep plants operating. Several coal plants that were either scheduled to close recently or are slated to be retired in the near future have not received adequate maintenance and upgrades in the last few years that would allow them to keep running sustainably long-term, one operator told Argus . That suggests operators could face higher rates of unexpected coal unit outages this year or more frequent planned outages as companies catch up on maintenance. For example, unit 1 of the Craig Station coal plant in Colorado, the most recent unit ordered to stay on line for another 90 days, has been out of service since 19 December, following a mechanical failure of a valve. The plant will need repairs and additional investments to continue running into 2026, Tri-State Generation & Transmission — one of the co-owners of the plant — said on 31 December. Some of the utilities that have received emergency orders to keep coal plants open also warned that delaying the facilities' closures could interfere with previous energy transition plans and investments. But Indiana utility NiSource, which received an order to keep its RM Schahfer coal plant on line until at least 23 March 2026, said "our long-term plan to transition to a more sustainable energy future remains unchanged". Other utilities also remain committed to transitioning from coal-fired generation. One operator said the recent emergency orders have merely put the coal industry on "life-support", rather than providing a substantial lifeline beyond the next few years. Many other coal market participants asserted that DOE's orders only require the plants to remain available during their extension periods and, at least so far, have not specified a minimum capacity factor at which they must run. Most of the plants operating in compliance with the emergency orders may just run as peaker plants, only operating at maximum capacity during extreme periods of generation demand. Still, the prospect of keeping the facilities open for an unknown period of time can be a challenge for planning fuel purchases. While some plants that received a DOE order still have a small quantity of coal stockpiled on site, those volumes will only sustain a few more weeks of coal burn, necessitating additional shipments. Other utilities are faced with buying more coal and deciding whether to purchase enough for just the extent of existing orders or to enter into longer-term agreements. Some operators have already opted into multi-year deals because they expect DOE's emergency orders on their plants will keep getting renewed well into the back half of this decade. Many utilities, especially by the end of 2025, found pricing in longer-term purchases to be more stable and economical because constrained supply in most US basins had prompted producers to offer spot coal at higher prices. Tight US coal supply also has led producers to be less willing to agree to options in newer coal contracts that would allow buyers to opt out of taking all of their volume commitments. Because of this, some utilities that have received orders from DOE have limited their additional coal purchases to deliveries only in 2026. Some utilities also said that they can not justify issuing longer-term requests for proposals to state regulators and ratepayers, since the DOE orders are only issued for 90 days. The US House of Representatives in mid-December passed a bill that aims to address some utility concerns. The Power Plant Reliability Act of 2025 would authorize the US Federal Energy Regulatory Commission (FERC) to require an owner or operator to continue running a power plant for up to five more years if the commission finds that its closure could threaten grid reliability. The bill would protect plant operators from penalties for potentially violating state or federal environmental laws while FERC's order is in place. And it would authorize FERC to renew an order by another five years if requested by a transmission organizer, state commission or public utility. The US Senate has not yet scheduled any action on the bill. And even if the measure is enacted, it will only address some of the uncertainties power plant operators face. By Anna Harmon Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved. News Indonesian coal output, exports decline in 2025 Singapore, 8 January (Argus) — Indonesia's coal production and exports declined for the first time in five years in 2025 on weak demand from key markets China and India. The world's largest coal exporter produced 790mn t of coal last year, out of which about 514mn t was exported, according to latest government data compiled by Indonesian Coal Mining Association (ICMA). The production volume was down 5.5pc from a year earlier, while exports fell by 7.9pc on the year. But the 2025 output exceeded Indonesia's target of about 740mn t. This marks the first decline in production and exports since 2020, when Covid-19 pandemic affected demand as well as the coal supply chain. The drop comes as demand from two of the largest coal importing nations, China and India, decreased in 2025 on an increase in domestic coal availability and fall in coal consumption, indicating a broad weakness in the economy and decline of coal-fired generation in the power mix. Indonesian suppliers recalibrated output in response to weak demand and lower prices. Argus assessed the widely traded GAR 4,200 kcal/kg coal for Supramax vessels at $44.99/t fob Kalimantan on 24 December 2025, down by 71pc from its all-time high of $154.21/t on 21 October 2021. Prices hit a more than four-year lows of $39.40/t in June 2025 and have since hovered in a narrow range that some producers said barely covers costs. Coal supply may remain under pressure because Jakarta is weighing production cuts and policy changes including the introduction of an export duty on coal, moves that could fuel fresh uncertainty in the global seaborne market . The country is considering setting coal production target under 700mn t for 2026, although energy minister Bahlil Lahadalia said on 8 January that the final figure would be firmed up after assessing the domestic coal requirements. Indonesian miners need to adhere to regulations to sell at least a quarter of their production locally under the so-called domestic market obligation (DMO). DMO sales reached 254mn t in 2025, while stocks at the end of the year were at 22mn t, according to the government data compiled by ICMA. The government will prioritise coal mining quotas for DMO before it can determine production levels for exports, Lahadalia said. The Indonesian government also took other measures in 2025 to tighten supply because the ongoing surplus has kept prices under pressure, it said. Some of these steps include withholding export sales proceeds in onshore bank accounts, tweaking domestic coal reference prices — the HBA — rolling out mandatory biofuel blending norms, banning coal hauling in parts of South Sumatra, imposing export tax on coal and reverting to annual RKAB appraisals with increased compliance on mine reclamation. This comes as the seaborne market appears to be well-supplied, with domestic supply potentially capping the import outlook of China and India, on top of broad weakness in the economy and changing generation patterns. Economic growth in China — the world's biggest coal importer — is expected to slow to 4.4pc in 2026 from an estimated 4.9pc in 2025, according to World Bank projections. China is also gradually increasing the share of renewable energy in its power generation mix, putting further pressure on overall coal demand. Similarly, coal burn in India has largely remained lacklustre on the back of an extended monsoon spell in 2025 and increase in renewable power generation. The sharp depreciation of the Indian rupee in 2025 has also weighed on imports. By Saurabh Chaturvedi and Nadhir Mokhtar Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.