The specific targets to reduce coal use — India’s toned down commitment at COP26 — will have implications for the industry as well as thermal power producers given the investments committed to coal-fired electricity.

“At least till 2040, the country’s dependency on coal is not expected to go down. The per capita power consumption would increase and energy demand would also go up as the economic development gathers pace,” Partha Bhattacharya, former Coal India chairman, said.

He said capacity expansion in renewable energy would gather pace, but it may not significantly reduce the share of coal in power generation by 2030.

Bhattacharya said there was little talk of crude oil, which results in methane emission, at COP26, and it was unfair to blame coal alone.

Analysts said the climate talks focus on coal — and not including oil and gas — would disproportionately impact certain developing countries such as Indian and China. An equitable fossil fuel phase-out would place most of the burden squarely on the US and rich countries, analysts said.

“India has set its short-term target for 2030, with 500GW of non-fossil fuel capacity and increase the share of renewable energy sources to 50 per cent. This would require an investment of about $500 billion,” Vibhuti D. Garg, energy economist, Lead India, Institute for Energy Economics and Financial Analysis, said.

India has added 113GW of coal fired power capacity since 2011, while 33GW of thermal power projects are under construction and 27GW in the pipeline stage.

The government forecasts coal plant capacity to grow to 267GW by 2030 from 208GW now. New coal-fired plants would be expected to operate for at least 30 years, cementing the fuel’s role in the global energy mix beyond the middle of the century.

The recent coal shortages in thermal power plants have brought out the country’s dependency on the fuel.

Garg said India will have reduce the share of coal to 50-55 per cent from 70-72 per cent by 2030.

India will have to reduce its reliance on coal further if it wants to achieve the net zero goals by 2070. The country, however, should benefit from the reduced costs of battery storage and green hydrogen, paving the way for lesser reliance on fossil fuels in transport, power and industry.

Prices of renewable energy in the recent tenders are hovering around Rs 2-2.5/kWh. While the average tariff of thermal power for NTPC is Rs 3.8/kWh.