India’s Coal Feel The Pressure from Falling Renewable Energy Prices

King Coal faces a major downturn in India, with Coal India deciding to completely phase out 37 of its mines in India by March next year.

The state-owned Coal company that accounts for the largest share of India’s coal production, has decided to do so claiming that running these plants is no longer financially viable. On the contrary, renewable energy capacity addition has increased at a fast pace, with a total of over 14 GW of renewable energy capacity (both solar and wind) being added in FY2016-17.

Also, read Coal Fights Solar In A Unique Way!

Coal is facing acute pressure from falling solar prices in India. According to the Energy and Resources Institute, India has a good chance of completely phasing out coal power by 2050, given the advancement in falling solar and storage prices in India. The country has already abandoned building almost 14 GW of coal-fired power stations.

India has already reached a record low price for solar at INR 2.44 per unit. Not only solar, wind energy is also expected to become highly competitive with the introduction of reverse auctions in India. Approximately 5-6 GW of wind energy is expected to be auctioned each year in India for the next five years. All these developments have made renewable energy super competitive in India. Given its undisputed green characteristic and falling prices, renewable energy sources no give a tough competition to coal in India.

Given the huge power problems in India and the rising level of threats to the environment from coal-fired plants, renewable energy seems a no-brainer. Moreover, the falling prices further justify the economics of going green in India. India is set to become the world’s third-largest solar power market in 2017, displacing Japan.

India and China have now overtaken the U.S. to become the two most attractive nations for renewable energy investment – according to a report issued by UK accountancy firm Ernst & Young.

Source: Climate Action Programme