From coal to cool: Why India’s giant is going green, with $3-billion renewables drive

Coal India Limited (CIL), the country’s largest state-run coal mining company, is taking a significant step toward clean energy with plans to invest ₹25,000 crore (about $3 billion) in renewable energy projects.

Here's why: money follows technology.

Huge cost-and-benefit advantages offered by renewables have lead to a global shift to clean power generation, including India.

Pivot

Towards this end, CIL has formed joint ventures with entities like NLCIL (Neyveli Lignite Corp India Ltd) and the National Thermal Power Corp (NTPC) to develop solar power projects. 

CIL, a state-owned company, produces about 80% of the subcontinent's coal output.

Recently, it has also signed deals with organisations like Energy Efficiency Services Limited (EESL) to implement energy efficiency projects, including solar power projects, and with CNLUPL (Coal India Navikarniya Urja Ltd) for commissioning a solar project. 

CIL's moves signal a major pivot from coal-fired power development, driven not just by environmental goals but by economic reality: renewable energy is now cheaper than building a new coal power plant in India.

Drop in coal imports

India's Ministry of Coal also reported that coal imports have dropped 9.2% in the past year, even as local mines ramped up production.

4.5 GW of solar, wind

According to The Economic Times, Coal India Ltd aims to install 4.5 gigawatts (GW) of solar and wind power capacity.

The company also plans to supply clean electricity to green ammonia production facilities, including those operated by AM Green, a major initiative backed by the founders of Greenko Group, which targets 5 million tonnes per annum of green ammonia output by 2030.

Cost considerations

While CIL has announced its intention to reach net zero emissions in its operations, industry analysts suggest that cost competitiveness is the real driver behind the shift. 

CIL, founded in 1975 and headquartered in Kolkata, has been gradually shifting its focus away from coal, a major source of pollution but still essential for meeting India’s current energy requirements. 

Solar, wind and battery (SWB) storage have reached a price point where they now significantly undercut coal-fired electricity.

Our World in Data shows solar panel prices have fallen by 90% in the last 10 years, onshore wind by 70% and batteries by more than 90%.

Business Standard reported that’s the main reason seen behind CIL’s pivot.

This transition aligns with the country’s broader goal of hitting net zero emissions by 2070. 

The cost of solar, wind and batteries (SWB) continues to drop every single year, while coal is becoming more expensive.

Despite this progress, India continues to expand its coal power capacity to meet rising energy demand driven by industrial growth and heatwaves exacerbated by climate change. 

Cost-competitiveness of renewables is compelling. The International Renewable Energy Agency (Irena) reported that renewable power is increasingly cost-competitive with fossil fuels – 81% of renewable capacity additions in 2023 produce cheaper electricity than fossil fuel alternatives.

Meanwhile, as deployment of renewable power accelerates, it triggers a "virtuous cycle" of technology and production efficiency, which results in better — and cheaper — renewables.

The Abu Dhabi-based agency also noted that the global average cost of electricity (LCOE) from solar PV fell by 12%, offshore wind and hydropower by 7%, and onshore wind by 3%. The global average cost of electricity from utility-scale solar PV fell to $0.044 per kilowatt-hour (kWh) and onshore wind to $0.033/kWh.

Expanding coal, scaling renewables

Coal India Ltd’s rollout of clean energy comes at a time when it is also expanding its coal-based power capacity. 

This shift is occurring alongside rising electricity demand driven by climate change. 

To address its growing energy needs, India plans to increase its coal-fired power output capacity by approximately 50%, or roughly 45 GW over the next few years. 

Target: 330 GW of renewables by 2030

However, this will be dwarfed by India’s target of adding 330 GW of renewable capacity by 2030, reflecting an energy mix where clean power makes up nearly 85% of new generation.

This "dual track" reflects India’s complex energy needs — balancing development and decarbonisation. 

CIL's $3-billion pivot to renewables shows that while coal remains a backbone of current energy supply in the subcontinent, the economic and environmental logic behind renewables is becoming undeniable.