Page 11 - AsiaElec Week 41 2021

AsiaElec RENEWABLES AsiaElec

Solar surge could see Indian

coal power peak by 2024

INDIA IF India keeps installing solar capacity at the rate 2024, generating some 87 TWh of additional
it’s achieved for the last three months, coal-fired power annually, enough to meet all of India’s
power could peak in the 2023-24 financial year, electricity generation increase, based on the lat-
and increased solar generation alone could meet ter’s 5.7% annual growth rate over the decade to
the country’s growing electricity requirements in 2019.
subsequent years, the IEEFA’s Tim Buckley and Meanwhile, India’s solar market has been
Charles Worringham said. attracting interest from global investors.
India’s electricity demand has surged and Recent research from IHS Markit has identi-
slumped in recent months as the economy fied sovereign wealth funds from Singapore and
revives in fits and starts, but the fact is that coal- Abu Dhabi, along with banks such as Goldman
fired power is increasingly sensitive to the per- Sachs, funds such as Copenhagen Infrastructure
formance of renewable energy. Partners (CIP) and utilities such as Japan’s JERA
Coal has effectively become India’s swing major investors in solar projects led by Indian
producer of electricity, rising to new peaks in developers.
periods when demand is high and renewable The study also said that banks such as JP
power low, but slumping deeply when demand Morgan and Standard Chartered are prepared
falls and renewable energy’s contribution rises. to underwrite many of the green bonds that
In recent months thermal generation has Indian power producers are floating to add to
swung between a daily low of just over 2.0 their renewables portfolios.
TWh on August 1 (when renewable energy and India wants to be open to foreign investment,
hydroelectricity provided 38% of India’s electric- as the government knows that it cannot meet its
ity), to as high as 3.2 TWh just over two weeks target of 450 GW of renewable capacity by using
later when renewable energy and hydro made a domestic capital alone.
smaller though still impressive 25% contribution Some other adjustments would be needed if
to the grid. coal-fired power were to peak and subsequently
But while the variable nature of renewable decline. Daily peak demand has been rising
energy is well known and the financial fortunes faster than daily energy, meaning that thermal
of coal-fired power are increasingly tied to its plants would increasingly have to be deployed
generation level, it is a recent change in a differ- to meet the daily peak, as would hydroelectric
ent number that may prove decisive in deter- generators, without increasing their overall
mining how soon coal’s contribution to India’s output. Additional pumped storage and India’s
electricity reaches its peak. That number is the first set of grid-scale batteries would also sup-
rate at which the country is installing new solar port the peak, along with the development of
capacity. a time-of-day pricing structure to incentivise
Calendar year 2020’s pandemic conditions demand response management by industry and
saw new solar installations fall to an average of consumers.
just 411 MW per month, compared to 665MW Whether the actual installation rate matches,
per month as the average since January 2017. But falls short of, or exceeds this rate will come down
since May this year there has been a very strong to the determination of the Indian government.
rebound. A total of 1,248MW of solar capacity The current rate would comfortably meet the
was added in June, followed by an additional 60GW ground-mounted component of the 2022
1,605MW in July, rising again to 1,672MW in 125GW renewable target, but not quite match
August. the average rate needed to hit the 280GW solar
This average of 1,508MW per month for component of the 450GW 2030 goal.
the last quarter does more than simply double What the last few months clearly demon-
the long-term installation rate – it shows just strate, however, is India’s ability to now acceler-
how close India could be to capping thermal ate the installation of grid-scale solar fast enough
generation. to cap coal-fired power before the middle of the
If this installation rate continued, solar capac- decade and potentially to see a gradual coal gen-
ity would reach 109 gigawatts (GW) by March eration decline from that point on.™

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