Through a combination of renewable energy deployment and increases in domestic coal production India could see coal imports peak this year, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

The report – India’s electricity sector transformation – claims India’s ‘Seven horses of energy’ transition have helped make see domestic solar PV cheaper than power plants fired by imported coal.

Coal imports are expected to freeze this year and fall by 20% per annum therafter.

India is also expected to more than double its domestic coal production by 2022 and Prime Minister Narendra Modi’s government is also aiming to install 175GW of renewable energy by 2022, as well as developing the country’s grid infrastructure.

Clean energy billions

IEEFA energy finance director Tim Buckley said: “India has opened the gates to a wave of multi-billion dollar investments in its renewable energy sector. There have been eight major deals in July alone with the single biggest international endorsement being SoftBanks’ $20bn, 20 GW solar joint venture.”

India is currently expected to increase electricity demand by 60% per annum in India until 2021, and predicts 75GW of installed solar power could deliver 22% of the required energy generation increase. Modi’s government currently plans to increase solar installations to more 10GW annually.

India has become an increasingly popular destination for solar development, due to a favourable climate and abundant solar resources.

Other major projects have included a $50bn grid upgrade, $700m for a 450MW wind farm and $1.4bn from SunEdison to aquire more than 1,900MW of renewable energy projects.

Buckley said: “India is replicating Germany’s and China’s systematic electricity sector transformation, with the added advantage that the cost effectiveness is accentuated by the fact that the price of solar electricity has dropped by 80% in 5 years.”

The IEEFA report estimates wind installation could deliver up to 18% of India’s new electricity consumption with the installation of a further 60GW capacity.

Coal pollution

Tariffs for state solar power were agreed at around 1rupee/KWh in several states this year, a rate cheaper than burning coal imports.

The coal industry has come under criticism from the World Bank recently for claiming to be a ‘cure’ for poverty. India, while relying heavily on coal to meet growing energy demands, hosts 13 of the 20 most polluted cities in the world, with air pollution thought to kill millions each year.

Rachel Kyte, the World Bank climate change envoy, said“There is a huge social cost to coal and a huge social cost to fossil fuels … if you want to be able to breathe clean air.”

Report co-author Jai Sharda said: “With falling prices of solar, imported coal has become the most expensive source of incremental electricity generation. As momentum builds, it is inevitable that the Indian electricity market will rapidly pivoting toward a significantly higher reliance on renewable energy and energy efficiency.”

Matt Field

Comments (1)

  1. Rohit Mittal says:

    Firstly I would like to thank you for such a wonderful piece of information on India’s clean energy plan. It is true that India is a developing country and now it is emerging as the fastest growing economy and to fulfill its dream of becoming developed nation energy is a priority. Clean energy is contributing 13 % in total energy production of India as I came to know by an online Hindi news article. Your blog gave me a lot of information on this matter so thanks a lot.

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