Coronavirus Lockdown Speeds India’s Shift from Coal to Solar Power

India is under lockdown like other countries and experiencing a speedy switch from coal to renewable energy. As a result, the country, which is the second largest coal consumer in the world, has seen its energy demand collapse by nearly 30% during.

In 2018, it was forecasted by the International Energy Agency that Indian coal demand would more than double by 2040. Thus, a major challenge to international efforts to prevent climate breakdown.

However, with the right policy framework in place, coal generation in India could peak much sooner, analysts have told Climate Home News.

Some argue that there was political backing for renewable energy prior to the Covid-19 crisis, emboldened by rapidly falling costs.

It can also be result of Prime Minister Narendra Modi speech at the UN Climate Action Summit in New York last year, where he promised to double India’s renewable target to 450GW by 2030, up from around 87GW installed capacity today. The bulk will come from solar panels.

The competitive cost of renewable energy is not the only reason for the sector’s resilience in a period of low demand. The cost of adding coal capacity is around 4.5 rupees which is much expensive that solar electricity which stands at about 2.5 rupees per unit generated, according to analysts. Even coupled with more expensive batteries to store electricity for after dark, solar energy was auctioned at a cheaper price than new coal earlier this year.

Meanwhile, the coal sector has been faced with cash flow issues over the past few years, with most plants running well under capacity.

According to an analyst, renewables delivered more than two-thirds of India’s new generating capacity additions in the 2019-20 fiscal year.

There are different factors for the increase use of renewable energy in India

1.     The sector benefits from a “must-run” status compelling power distribution companies to use solar or wind energy whenever it is generated.

2.     Powered by sun and wind, renewable generators are not exposed to the same supply chain disruptions as fossil fueled plants.

3.     In recent years, private investors have also been increasingly reluctant to invest in Indian coal infrastructure with much new finance coming from state-backed banks and companies. On the contrary, global investors are ready to invest “aggressively” in new renewable infrastructure

For Dangra, 2027 could mark the peak in capacity when India “will likely not need any new coal plants”.

Despite the favourable conditions for boosting renewables, Dsouza did not rule out an uptick in coal generation and new capacity once the lockdown lifts, saying coal will continue to meet baseload demand. “Renewables have not been a substitute for coal,” she said. None of the new coal plants in the pipeline for construction have so far been cancelled.

The pace of renewable deployment and the growth of the Indian economy will remain key factors in determining the shape of the transition. It will also depend on the grid being ready to match variable solar and wind generation with consumer demand.

Despite much hype of the renewable energy, no one can assure the status of it in the future. With a looming global recession and an Indian government strapped for cash while fighting the pandemic, there can be no trillion-recovery package expected to accelerate India’s clean energy transition.