India could earn more than $170 billion if it closes its coal-fired power plants

India is one of the most coal-dependent nations on Earth. A new analysis reveals that quitting coal sooner could actually make the country richer. Researchers calculate that closing coal-fired power plants ahead of schedule could unlock huge net economic gains.

The study looked at every coal-fired plant in the country and compared different shutdown timelines that match global warming limits of 1.5 degrees Celsius (2.7 degrees Fahrenheit), and 2 degrees Celsius (3.6 degrees Fahrenheit).

In the most ambitious pathway, a single, coal-heavy state ends up with a very large net gain rather than a loss when plants close early.

Coal giant at a crossroads

The work was led by Xinyi Long at Fudan University in Shanghai, China. Her research focuses on how detailed power plant modeling can support faster yet economically sound climate action in coal dependent countries.

According to analysis, coal currently supplies roughly 70 percent of India’s electricity. Most of the coal resource for power plants is mined inside the country.

That dependence keeps lights on and factories running in India. However, it also locks communities into air pollution, climate risks, and price swings. Public health researchers have shown how costly coal power already is for people’s lungs and hearts.

A research team “estimated 112,000 deaths” each year from coal plants in India, wrote Maureen Cropper of the University of Maryland in one study. 

India has promised net zero emissions by 2070. The country wants half of its power capacity from non-fossil sources by 2030.

That ambition is backed by the government’s plan, which sets out transmission upgrades and renewable zones to carry more solar and wind.

Power plant comparison model

The team used a mixed integer model to pick the cheapest path for the system. This math tool looks across plant shutdown options to find the best solution.

This current research runs at the level of individual power plants, so it can decide which generators retire early and which run on for longer.

The model considers every coal-run power plant in India, from giant coastal stations to older inland plants. For each unit, the facility’s age, size, and fuel efficiency are entered into the model.

The algorithm considers construction costs, operating costs, and expected revenues. It weighs these against climate and health damages to decide when each unit should shut down.

Testing two warming scenarios

Two climate pathways were tested, one that holds warming near 1.5 degrees Celsius and another that allows about 2 degrees Celsius.

For each pathway, the model applied a social cost of carbon. This is an estimated dollar value of harm from each ton of carbon dioxide released. That means climate damages show up directly in the cost calculations.

The researchers also added social co-benefits, extra gains such as lower medical bills and fewer lost workdays when air pollution falls.

Retiring coal power plants early

Under the optimized pathways, power plants in Chhattisgarh state would gain about 171 billion dollars in net benefits. Uttar Pradesh power plants, in contrast, would gain about 110 billion dollars.

Many other large states also post positive balances in the model. Overall, the nationwide gains from an ambitious coal power plant phaseout would rise well beyond any single state’s total.

Instead of treating climate policy as a sacrifice, the analysis shows that retiring plants early can leave India with lower system costs over time, while still meeting demand.

Other researchers warn that delaying action creates stranded assets. This is in the form of power plants that become money losers because they must close before paying back investors.

One analysis found that between 133 and 237 gigawatts of Indian coal capacity would be stranded after 2030. The new plant-level optimization tries to avoid that outcome by steering closure decisions toward the least efficient or most polluting units first.

More efficient stations would be allowed to run for a limited time, and then be shut down on schedule. In this way, investor concerns could be balanced with the need to cut emissions quickly.

Computer models into the real world

Translating these results into policy still raises hard questions about jobs, regional politics, and fairness for coal-dependent districts.

If closures are rushed without planning, workers and local governments that rely on coal royalties could be left behind even as the national economy gains.

Health evidence, though, suggests that communities near coal plants have much to gain from cleaner air. This includes fewer hospital visits and longer lives.

The mortality estimates from coal pollution make it clear that shutting plants is not just about climate targets. It is also about the quality of daily life.

Coal-fired power plant alternatives

Renewable power, battery storage, and stronger transmission lines provide the backbone that allows coal stations to close while still keeping the grid stable.

As more solar and wind projects come online, these tools can take over peak loads and backup roles that old coal units currently fill.

The message from this modeling work is clear. Strong climate goals and practical economics can work together for India’s power sector.

Designing coal exit plans plant by plant, rather than relying on national targets, could help India cut emissions, raise prosperity, and protect public health.

The study is published in Nature Communications.

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