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Solar, not coal, is India's future by 2030: Report

BNEF report says China and India present a $4-trillion opportunity in the energy market

Shreya Jai  |  New Delhi 

solar energy, solar power
From 2030, solar would begin to sideline coal in India, with the pace of photovoltaic (PV) additions more than doubling from the 2020s.

India will add more than 40 gigawatt (Gw) of coal-based power over the next five years amid stagnant growth in the sector, according to a new report by Bloomberg New Energy Finance (BNEF).

However, from 2030, solar would begin to sideline in India, with the pace of photovoltaic (PV) additions more than doubling from the 2020s to the 2030s, said the New Energy Outlook-2017 by BNEF.

“We see India’s installed power capacity rising from 189 Gw in 2016 to 254 Gw in 2040, even after accounting for retirements of old and inefficient plants. Close to 42 Gw can be commissioned during 2017-22,” said Ashish Sethia, head of Research, Pacific, BNEF. 

He, however, said there was a pipeline of 129 Gw of announced, pre-permitted, and permitted projects, which were under a significant threat of being shelved.

“However, post-2030, another 64 Gw capacity is estimated to be added. We estimate that India’s electricity consumption per capita will increase by 2.8 times between 2016 and 2040. But even in 2040, India’s will be less than one-fifth of per capita consumption in the US and one-third in China,” said Sethia.

Various state governments have cancelled thermal power projects of 13 Gw. At the same time, 28 Gw of thermal power projects are up for distress sale and another 60 Gw are feared to be stressed as the power demand remains weak.

Peak coal-based power in will arrive around 2024, according to BNEF. 

By the mid-2020s, cheap wind and PV will begin to undercut new on a levellised basis throughout the region, trimming average installations to just 9 Gw a year. Coal, however, remains the bedrock of the region’s power supply, and will “contribute to 34 per cent of electricity generation in 2040 — a larger share than any other fuel,” the report said.

The BNEF report has cited that and India present a $4 trillion opportunity in the energy market. “These countries account for 28 per cent and 15 per cent of all investment in power generation to 2040. Pacific sees almost as much investment as the rest of the world combined, at $4.8 trillion. Of this, just under a third goes to wind, a third to solar, 18 per cent to nuclear and 10 per cent to and gas,” said the New Energy Outlook.

Contrasting India and China, the report said the latter would “go big on renewable”, with the wind and solar capacities increasing eight-fold to 2040. 

But remained the world’s largest consumer and emitter of coal, with the fuel anticipated to account for 30 per cent of the generation mix in 2040, it said.

Sethia, however, said India’s peak demand was expected to shift from late evening to mid-day because the adoption of air-conditioners continued to grow rapidly. “This shifting of peak load coincides with the production curve and increases the installation of solar technologies,” he said.

First Published: Fri, June 16 2017. 01:16 IST