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Economic Survey 2022 | India’s dependence on fossil fuel grows, coal leads the pack

Coal is the most important and abundant fossil fuel in India and accounts for 55 percent of the country’s energy needs, the survey says

January 31, 2022 / 03:22 PM IST
Representative image

Representative image


Despite India’s climate commitments, the 2021-22 Economic Survey reveals that fossil fuel-based energy still outpaces the year-on-year growth of any other energy source in the country.

“Between 2020-21 and 2019-20, the maximum rise in electricity generation was recorded in diesel-based thermal energy for utilities (electricity distribution companies),” the survey that was released on January 31 ahead of the Budget said. However, new captive power plants for industries tend to be based on renewable sources.

Thermal sources of energy account for the largest— 61.42 percent— share of total installed capacity in utilities followed by renewable energy with 24.7 percent and hydro at 12.09 percent.

Although diesel accounts for a small portion of the thermal power mix, utilities increased the use of diesel in months when generation from cleaner sources like hydropower, renewables and natural gas dipped.

Coal is the most important and abundant fossil fuel in India and accounts for 55 percent of the country’s energy needs, the survey said.

Coal production increased 12.24 percent in April-October 2021 as compared to a negative 3.91 percent in April-October 2020.


Despite the Modi government’s continued incentives for solar and wind power, the demand for coal is expected to remain robust in the range of 1.3-1.5 billion tonnes by 2030, the survey said.

Also read: Economic Survey 2022: Banking system past the pandemic but some lagged impact remains in the pipeline


“The opening up of coal mining to the private sector is the most ambitious reform the industry has seen so far and will bring efficiency and competition in coal production, attract investments and best-in-class technology, and help create more jobs in the coal sector,” it said.

So far, 28 coal mines have been auctioned. Of these, 27 have been auctioned to private companies and the auction process for 88 is underway, the survey said.

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The government, however, has launched several measures to be taken by the coal and lignite-producing public sector units to reduce their carbon footprint, the survey said.
Tanya Thomas is Mumbai-based independent journalist.
first published: Jan 31, 2022 02:40 pm