India drops coal from its plans and chooses solar
Environment — di Cecilia Bergamasco
India has cut its investment projects in large coal-fired power plants to focus on solar, which has now become more cost-effective.
India drops coal from its plans and chooses solar
India has cut its investment projects in large coal-fired power plants to focus on solar, which has now become more cost-effective.
India had already planned to focus on wind and solar, so much so that the National Energy Plan of the Central Electricity Authority (Cea) had banned the construction of new coal-fired power plants, apart from those already under way, from 2022. In recent days, however, the plan could undergo a further acceleration, halting the construction of 14 gigawatts (GW) of already-planned coal-fired power plants, given the falling costs of solar.
Farewell to 14 gigawatts of coal, solar costs less
India is a rapidly expanding country, dependent on coal for approximately two-thirds of its energy needs. Although its commitment to renewable energy grows stronger year by year, the country is still the world's third-largest producer of carbon emissions. This situation has caused serious problems for the population: on the one hand, energy needs aim to lift an ever-growing portion of people out of poverty, while on the other, the use of fossil fuels endangers the public health of those very same citizens. A picture that, until a few years ago, might have seemed to have no way out, but which today appears to have a solution that safeguards both economic growth and the health and wellbeing of people.
As several analysts have shown, economic growth and renewable energy are increasingly going hand in hand. Solar, wind and other clean sources can support the development of even heavy industries without the cost of pollution. All the more so now that the prices of renewable technologies are falling rapidly. It is this data that has prompted India to scrap the plans for the construction of around 14 gigawatts of coal-fired power plants.
In January of last year, the price recorded at an auction for solar energy production in Rajasthan caused surprise when it fell to 4.34 rupees per kilowatt-hour, approximately 6 euro cents. Last April, the price was lowered further: in an auction for a 500-megawatt solar plant, the winning tariff was just 2.44 rupees. A figure 30 per cent lower than the wholesale price of 3.2 rupees charged for coal by a large and important Indian utility. For the first time in India, solar is more cost-effective than coal: a fact that will certainly have implications for global energy markets and will help accelerate the energy transition.
Efficiency, renewables and costs: the Indian recipe
Tim Buckley, an analyst at the Institute for Energy Economics and Financial Analysis (Ieefa) – an organisation based in Cleveland (USA) specialising in research and analysis on financial and economic issues related to energy and the environment – stressed how "The measures adopted by the Indian government to improve energy efficiency, together with the ambitious renewable energy targets and the collapse in the cost of solar, have had an impact on existing, as well as proposed, coal-fired power plants, making them financially unviable."
Thanks to this governmental stance, India has attracted international resources and financing that have helped accelerate the growth of renewables, giving rise to the construction of large solar plants or to extraordinary innovation measures in the public sectors with the highest energy consumption, such as the railways. "Certain policies are fundamental," Buckley himself stressed, "because when you invest over 25 or 35 years, you need policy certainty and clarity." And in India, on the subject of energy, there is no doubt: Prime Minister Narendra Modi considers it his number-one objective, while Energy Minister Piyush Goyal speaks of it almost daily.