As the West Asia crisis yet again brings into focus India’s energy security dilemma, a study by the Council on Energy, Environment and Water (CEEW) suggests substituting some coal-based capacity additions by improving utilisation of existing industrial captive thermal power plants (TPPs) to reduce risk of stranded assets while easing renewable energy integration. 

The study highlights that India’s energy security risks are now spread across households, industry, public finances, inflation, and strategic autonomy. A deeper risk is that India’s fossil fuel system is exposed across the board through concentrated suppliers, vulnerable shipping routes, limited reserves and storage, refinery constraints, and direct exposure to global price volatility.

Keeping in view the critical issue of energy access and affordability, the study suggested that in the medium to long term it is advisable to align infrastructure with future demand trajectories, the study emphasised.

Substitute some coal-based power-generation capacity additions by strengthening the grid integration of captive power plants used by industries. In 2023–24, coal-based captive power plants had a total installed capacity of 46 gigawatt (GW), accounting for a significant 17 per cent of the total coal-based power generation capacity in India, the study said.

“The capacity utilisation factor for these captive power plants was only 45 per cent in the same year. Prioritising the efficient utilisation of these power plants will reduce the risk of new coal power capacity becoming stranded investments,” it suggested.

Coal accounts for around 58 per cent of India’s total primary energy supply and over 73 per cent of its electricity generation.

Hemant Mallya, Fellow at CEEW, said, “India has strengthened energy access, diversified supplies, and scaled clean energy. However, our study shows that energy security risks are becoming more complex. Disruptions in crude oil, LNG, LPG, coal, or key shipping routes can quickly affect cooking costs, transport fuel prices, fertiliser subsidies, industrial competitiveness, and inflation.”

Supply security

The study pointed out that domestic non-coking coal is mostly allocated to public power utilities, leaving non-power industries in coastal and western regions dependent on imports despite rising inland production.

This has constrained coal access for sectors such as cement, steel, and small-scale captive power producers, which often face higher costs or are compelled to rely on imported fuel, it added.

The government initiated policy reforms under the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Amendment) Act, 2020, which were aimed at easing these constraints by allowing captive mining and removing end-use restrictions.

“While non-Coal India and Singareni Collieries Company opencast production more than doubled from 68 million tonnes (mt) in 2020–21 to 152 mt in 2023–24, over half of the allocated mines (64 out of 121) remain non-operational. As a result, import dependence persists even for non-coking coal,” it added.

Even as the share of imported non-coking coal has declined, India still imported over 180 mt in FY23, largely from Indonesia and South Africa.

“Non-coking coal imports are particularly exposed to fluctuations in Indonesian policies, including export restrictions, price caps, and market interventions that periodically disrupt global supply,” the study said.

Such volatility affects India’s coastal power plants and cement industries, which depend on imported coal for blending and quality consistency. As a result, supply security remains contingent on policy decisions outside India’s control, it added.

Mallya stressed that India’s next phase of energy security must move beyond securing fossil fuels to a clear transition plan: optimising gas system utilisation, avoiding further refinery expansion, accelerating viable EV adoption, electrifying industry, reconfiguring refineries for lower gasoline demand, and building resilient green technology supply chains.

Published on June 18, 2026