Solar power gets cheaper; it's time we moved away from coal for electricity

Union Home Minister Amit Shah recently said that the coal sector will be the largest contributor to India’s dream of becoming a $5 trillion economy. He was speaking at a programme to allot 19 new coal blocks, which were opened for private bidders after 47 years of nationalisation of the coal sector.

A few days earlier, on a different platform in Kutch, Gujarat, Prime Minister Narendra Modi laid the foundation stone for the world’s largest renewable energy park. The 30,000 megawatt (30GW) capacity hybrid renewable energy park will use wind and solar energy on 72,000 hectares of open land to help fulfil India’s target of generating 450,000 megawatt (450 GW) renewable power by 2030.

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While the government’s intentions are good and aimed at making the country self-sufficient in energy, it is difficult to fathom the amount of stress laid on coal and coal-fired power plants — the highest CO2 emitter in the world. If coal has to be used to make India a $5 trillion economy, then how can we meet our targets to reduce carbon emission under the Paris Climate Change Agreement of 2015?

Coal – A fossil fuel with high pollution capacity

The government needs to explain why we are running after coal, a fossil fuel, which has a high pollution capacity, to become prosperous when we can harness sun and wind energy to meet all our electricity needs and save substantially on oil imports.

“The interest of entrepreneurs in the coal sector is already on the wane, which is evident because there were very few bids for each of the 19 coal blocks allotted so far. In the power sector, definitely, the economics is unfavourable to coal. One does not see too much coal-based capacity addition coming up. Coal production and its demand are likely to reach a plateau in the next five to six years,” said Ashok Srinivas, a policy expert on the coal sector and coal-based electricity.

Additionally, the auto industry is rapidly moving away from diesel (a highly polluting fuel) to hybrid and electric vehicles. Mahindra & Mahindra, India’s foremost automobile manufacturer, recently stated that electric vehicles (EV) will dominate India’s auto market by 2030.

So there is enough evidence to prove that demand for electricity will only go up and, therefore, shifting to solar power has the potential to drive India away from oil imports, which cost billions of dollars, in the years to come.

While talking about the cost of coal-fired electricity, we do not consider the cost of air pollution, resultant health hazards and additional burden on the nation’s health machinery, which is already strained after the COVID pandemic.

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Srinivas says, “Starting a coal mine comes at a price. Deforestation, displacement of people, land use change and water table change are some of them. Once you produce coal and consume it in the power plant there is the issue of particulate matter pollution caused due to burning of coal, pouring and disposal of ash, which goes on for 30 to 40 years, which is the shelf life of a coal mine. The last stage is indeed restoring a coal mine, which is quite an expensive activity.”

But can we go completely solar?

Yes, we can!

Under the Paris Agreement, the government of India has committed to generate 175 GW of renewable energy (solar, wind, hydel, biomass) by 2022. The prime minister recently set a larger goal to achieve 450 GW renewable energy capacity by 2030. Of the 175 GW capacity target, 100 GW has been allotted to solar, but as of January we have been able to install only 37 GW solar capacity (year 2020 was lost to the pandemic).

By its own admission, the Ministry of New and Renewable Energy says that making optimum use of the sun’s energy can fulfil all of India’s electricity requirements. “About 5,000 trillion kWh per year energy is incident over India’s land area with most parts receiving 4-7 kWh per sqm per day. Solar power can effectively be harnessed providing huge scalability in India… Theoretically, a small fraction of the total incident solar energy (if captured effectively) can meet the entire country’s power requirements,” the ministry states on its website.

Is coal cheaper than solar?

Not at all!

In 2009, the then Manmohan Singh government first set a target to generate 2 GW solar powered energy by 2022. Since then the subsequent governments have revised the targets on a regular basis mainly because of the falling prices of solar photovoltaic (PV) cells, which has resulted in constantly reducing per unit price of solar energy. Today, solar powered electricity could cost as low as ₹2.36 per unit (Kwh). Just 10 years ago, it was the most expensive option for building a new power plant. Since then, that cost has dropped by 90 per cent.

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A joint study by TERI and US-based think tank Climate Policy Initiative (CPI) has revealed that the cost of solar power in India is likely to drop to as low as ₹1.9 per unit over the next 10 years, largely due to technology improving efficiency levels.

In contrast, prices of coal-generated electricity are estimated to go up over the years. JMK Research and Analysis estimated the cost of electricity produced from new coal power plants in Tamil Nadu to be between ₹4.5 and ₹6/kWh. On the other hand, levelised cost of energy (LCOE) for a hybrid, solar, wind and li-ion battery storage system comes to around ₹4.97/kWh in 2021, which will drop to ₹3.4/kWh by 2030.

The study also shows that if, hypothetically speaking, solar or wind-powered storage system were to supply all its energy from Tamil Nadu to Delhi consistently till 2030, the per unit cost (LCOE) would still come to around ₹4.4/kWh.

The Budget on February 1 could do well to focus more on renewable, especially solar energy to make the country self-sufficient in energy. Accordingly, it should work on policy matters to make roof top solar installations (allotted 40 GW of the 100 GW solar target) more lucrative for consumers so that small scale and medium scale industries lap it up and bring about a solar revolution in the country.