Electricity costs can fall 40% if India gives up coal by 2040, Auto News, ET Auto
NAGPUR: India can cut its electricity costs by about 40% with a rapid phase out of coal from its power sector as early as 2040, reveals a latest study.
According to the study done by researchers at the Lappeenranta-Lahti University of Technology (LUT), some key Indian states can have 100% sustainable energy as early as 2035. “Some of the coal-dependent states such as Uttar Pradesh, Odisha, West Bengal, Maharashtra, Gujarat, Jharkhand can phase out coal as early as 2040,” the study stated.
Estimating a deflationary cost for renewable energy, researchers found that solar and wind power costs have declined significantly compared to coal, and are expected to fall further by another 50–60% by 2050. Also, per megawatt cost of electricity from coal is expected to increase 70% and the cost for nuclear power is expected to increase by more than 13%.
“In comparison, the cost of electricity from solar PV in 2030 would be one-fifth the cost of coal-based electricity, and in 2050 it would be one-tenth.
The installed capacities of coal are at risk of becoming stranded assets, as these plants have very low-capacity factors during the transition years. As the share of renewables increases, it will lead to reduced revenues and profitability of operating these power plants,” researchers stated.
They said moving to solar is the obvious choice for India. “Not just the cost of solar, the cost of battery storage is expected to drop further making it even easier for grid balancing and managing peak demand. Our study shows that any new investments in fossil-fuel based thermal power capacity today is economically unviable and could be a burden for a future flexible power system,” said Manish Ram, one of the authors of the study.
According to India’s draft National Electricity Plan 2022 (NEP22), solar targets for 2032 have increased by 18% compared to India’s earlier estimates. The country also increased its battery storage target from 27 gigawatt (GW) of 4-hour storage to 51GW of 5-hour storage.
“India already has ambitious renewable energy targets till 2030, but what is missing is more ambitious long-term targets with the goal of climate neutrality, which will send a clear message to global investors and stakeholders. This is a great opportunity for India to be a trendsetter for emerging and developing countries in the sunbelt,” says co-author Christian Breyer.