Leaders in India have turned their backs and walked away from plans of building nearly 14 gigawatts of coal-fired power stations – which is about as much power used in the whole of the UK. The dramatic plummeting of the cost of solar energy has made this possible. This good news only highlights the rate of change regarding solar energy.
Analyst Tim Buckley (director of energy finance studies) wrote in his article on the Institute for Energy Economics and Financial Analysis’s website that this shift away from the dirtiest fossil fuel and towards solar in India will have “profound” ramifications for global energy markets. He tells about how 13.7GW of planned coal power projects have been canceled so far this month.
It all started in January of 2016 when Fortum, a Finnish company, got on board to generate electricity in Rajasthan at a record low tariff (a guaranteed price) of 4.34 rupees per kilowatt-hour (about 5p). At the time, Mr. Buckley said that this price was so low it would never be repeated.
He was wrong about that! Just 16 months later, an auction for a 500-megawatt solar facility resulted in a tariff of just 2.44 rupees. That’s 31% less than the wholesale price charged by a major coal-power utility of 3.2 rupees! From that moment, everything turned in favor of renewable energy.
Mr. Buckley said:
“For the first time solar is cheaper than coal in India and the implications this has for transforming global energy markets is profound. Measures taken by the Indian Government to improve energy efficiency coupled with ambitious renewable energy targets and the plummeting cost of solar has had an impact on existing as well as proposed coal fired power plants, rendering an increasing number as financially unviable. India’s solar tariffs have literally been free falling in recent months.”
Investors from all over the world became interested in India’s burgeoning solar sector. Mr. Buckley said:
“The caliber of the global financial institutions who are bidding into India’s solar power infrastructure tenders is a strong endorsement of India’s leadership in this energy transformation and will have significant ripple effects into other transforming markets, as is already seen in the UAE, South Africa, Australia, Chile and Mexico.”
All around the globe, solar is becoming cheaper, and it is a ray of hope in a world where the climate crisis has everyone reaching panic mode.
