In light of several global and domestic levers, such as the ongoing energy transition, changing sector economics and policies, and climate change concerns, a phasedown of coal from the power sector is almost inevitable. However, the coal sector not only supplies over 70% of electricity currently, but also shares complex interlinkages with several other sectors and influences aspects of development in coal bearing regions. Therefore, the phasedown of coal needs to be carefully planned to ensure that growing electricity demand is met at least cost while minimising emissions and avoiding long-term undesirable lock-ins.

An effective approach toward the coal phasedown must:

• Include planning and optimisation at the state level
• Account for growing future demand
• Address demand variations across time and seasons
• Consider existing legal and contractual obligations
• Factor in economic and technical considerations and adherence to statutory norms
• Consider financial and capital requirements

These considerations are best accounted for by using sophisticated modelling tools that can support development of multiple scenarios so as to better reflect different possible futures. This can inform future demand and supply assessments, which would then lead to robust decision making in matters of capacity, subject to public consultations and regular reviews.

Such an analysis-based approach to phasing down coal will not only aid in circumventing challenges such as power shortage, high cost of power and resource lock-ins, but also help in planning for other aspects such as a just transition, and opening and closing of coal mines, making it key for navigating a transition away from coal in a developing country like India.