India’s state-run power producer NTPC Ltd. reported a 9.4% increase in first-quarter earnings as the utility was able to recover higher fixed charges from its power distributing customers.

Net income for the three months through June rose to 40.7 billion rupees ($495 million), the New Delhi-based company said in a filing on Saturday. Revenue declined 2.3% to 391.22 billion rupees. Energy sales fell 2.7% in the quarter from a year earlier.

While the utility’s capacity utilization at its coal- and gas-fired plants fell from a year earlier, the plant availability factor — which is a measure of its preparedness to deliver electricity — climbed, enabling NTPC to recover higher fixed costs from its customers.

Rising power demand in India has pushed NTPC to resume building new coal-power capacity after years, even as the company aims to lower its reliance on fossil fuels over the longer term.

The company won the board’s approval to hive off its coal mining business into a separate unit, it said in a separate statement. Coal output from its own mines jumped 52% from a year earlier to 6.2 million tons, NTPC said.

India expects coal to remain its largest source of electricity generation at least through 2030 and sees additional new plants being required, even as the nation also adds record amounts of wind and solar energy to help meet Prime Minister Narendra Modi’s climate targets.