New Hampshire, USA — Coal contributes 60 percent to India’s power mix today; solar is less than 1 percent. But what was a factor-of-seven difference between the cost of coal and solar two years ago shrank this summer to just a 1.8x gap. Can solar catch up within the next ten years?
In 2011 big coal plants were signing PPAs with tariffs for INR 2.8/kWh while solar was as high as 18/kWh. Now large grid-connected solar can be had at INR 7/kWh, while imported coal, on the rise to help offset a ~10 percent power deficit (baseload) exacerbated by rapidly rising power demand, is pushing INR 4/kWh without taking into account subsidies or cost of externalities. And that doesn’t begin to address the challenges of grid-connecting villages, much less the hundreds of millions of citizens who remain off-grid.
The answer to this lies in domestic solar power, both centralized and distributed, built relatively fast at any size and requiring less than 1 percent of the nation’s land. Four factors have to come into play, though, for solar to truly supplant coal in India in the next decade, according to Tobias Engelmeier, managing director at Bridge to India:
– Looking at longer-term costs. Getting solar costs down to INR 5/kWh in the next couple of years, and lower beyond that, will require improved materials, production, and efficiencies, but long-term solar costs are heading downward. Costs of non-replenishing fossil fuels including coal, meanwhile, will increasingly depend on foreign supply and demand markets.
– Costs of infrastructure and grid management. As an infirm power source, solar’s higher incorporation will require extra investments in a number of areas from storage to demand response. On the other hand, adding more coal plants and imports will mean more infrastructures in mining and a supply chain for imports. It’s still unclear how those all will compare.
– Measuring externalities. Beyond simple end market pricing, coal has several arguable cost-adders that should be factored in, most notably pollution and greenhouse gas emissions, water usage, soil degradation, etc. Factoring in all costs will increasingly be important.
– Valuing energy security. Notice how U.S. foreign policy decisions, including wars, made in the past few decades have been linked to dependence on imported oil? Don’t expect India to follow that lead, given global politics and current supply situations.
Have an Idea for Renewable Energy In India? In May 2014 the 5th annual Renewable Energy World India exhibition and conference returns to New Delhi in 2014, now alongside DistribuTECH India and co-located events POWER-GEN India & Central Asia and HydroVision India. The call-for-papers deadline is this Friday, October 25; topics can range from solar to wind to biomass to geothermal and heat pumps, waste-to-energy, hybrid plants, energy storage, resource forecasting, and numerous related issues.
Inside India’s Latest Solar Policy Guidelines: India’s Ministry of New and Renewable Energy (MNRE) has approved guidelines for the next phase of the country’s National Solar Mission (NSM), which called for bids for 750 MW of solar plants, offering about 18.75 billion rupees ($303 million) in grants. Here’s a summary of the latest draft proposal‘s high points and key changes, from a sizable domestic content provision to a tweak to viability gap funding (VGF) and some reassurances for both developers and state manager SECI.
India’s Plan to Harness Biomass: The New York Times takes a closer look at India’s goals for biomass as a growing renewable energy source and economic enabler for its agriculture sector which supports more than half the nation’s population. Taking its cues from Europe’s embrace of biomass, India sees the potential to generate at least 18 GW of electricity, part of overall plans to more than double its renewable energy supply to 55 GW by 2017. That runs somewhat contrary, though, to another report that a dozen biomass power plants have scaled back their output since demand for the costlier power source has plummeted in the past year.