The Indian government has forecast that it will exceed the renewable energy targets set in Paris last year by nearly half and three years ahead of schedule.
A draft 10-year energy blueprint published this week predicts that 57% of India’s total electricity capacity will come from non-fossil fuel sources by 2027. The Paris climate accord target was 40% by 2030.
The forecast reflects an increase in private sector investment in Indian renewable energy projects over the past year, according to analysts.
The draft national electricity plan also indicated that no new coal-fired power stations were likely to be required to meet Indian energy needs until at least 2027, raising further doubts over the viability of Indian mining investments overseas, such as the energy company Adani’s Carmichael mine in Queensland, the largest coalmine planned to be built in Australia.
Is the Indian coal domino about to fall?
The up-beat claim by the coal lobby that Indian coal power will keep growing for decades has been sorely tested in 2016, as the country’s power sector is rapidly shifting towards renewables, even as public opposition to air pollution, displacement and deforestation for coal mining grows. India’s coal power boosters are now confronting an increasing array of signals which suggest the diversification away from coal will only accelerate in 2017.
Between April and October this year the Central Electricity Agency (CEA) reports India has commissioned (p. 5) just over 3600 megawatt of coal plant capacity, down almost by half on the year before. While the financial year still has four months to run, the coal sector may well fall short of the 13,000 MW of new plants expected to be commissioned this [financial] year.
Massive stockpiles of coal at mines and power plants due to reduced demand for power have forced a slowing of mine production, which has remained relatively flat over 2015. To cap it all off, coal plant utilisation rates continue to fall year on year, and are hovering below 60% for the April-October 2016 period.
Over the same period the combined generation of wind and solar grew by over 43 per cent compared to the year before, massively outpacing the growth rate for thermal power. While generation from conventional sources – predominantly coal – grew by a larger amount in absolute terms, renewable generation’s growth at over six times the rate of conventional sources is none-the-less hugely significant. In all, 28% or over a quarter of all new generation between April and October 2016 came from renewable sources.
This week the CEA revealed in its draft National Electricity Plan (NEP) that for the five years to 2022 the country does not require any more coal-based capacity addition till 2022 above current levels. As expected, given India’s severe energy shortage and millions without electricity, the plan’s estimated growth of 187,000 megawatts (MW) in new capacity between 2017 and 2022 is huge. But the critical point is that the bulk of this – 115,000 MW – consists of renewables.
The draft NEP is clear that there is no need for a single additional MW of coal power till 2022. Moreover, considering the over 50,000 MW currently under construction, likely to come on stream in the next few years, there is also no need for additional coal power plants till 2027. This in effect signals that there is no need for a single new coal power plant to be approved, receive finance, be granted permits or break ground in India for the foreseeable future – if ever!
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