Solar Power
India’s Got It! But Getting More Will Get Harder.....
No, not in India just yet. Getting close, though, planning to arrive at month’s end.
For the many asking how covid is affecting the journey, the answer is we’ll see. I’m fully vaccinated. But as many of you have noticed — especially those in India — the country is enduring a big covid spike. That’s causing new hardship for Indians.
Difficult to know how exactly it all will disrupt transportation and travel, but surely it will. I’ll adapt, just like everybody there.
In the three weeks or so before I get to India, I’m going to risk a bit of a wonky start to this substack. Think of it as an investment, so when the more interesting on-the-ground reporting comes, the larger context will be clearer.
In a way, the journey is a look at India’s energy past, its present and its future. To oversimplify: Its past is coal. Its future is solar. This chart from the International Energy Agency’s recent deep-dive into all things Indian energy pretty much says it all:
But the present is what I’m most focused on, a moment of furious transition. Coal remains tenaciously woven into the fabric of India’s economy, politics and society. You can see that in the chart below. It’s a IEA future scenario based on the policies India pretty much already has in place. Note, despite the amazing change in the kind of energy that gets added to the system between 2010-2015 and the 2035-2040 projection, coal capacity doesn’t even begin declining on a net basis until after 2030.
Now, some smart analysts — particularly at IEEFA, whose consistently terrific work on India underpins much of my own thinking — believe coal could come out of the system faster than that, as the actual burning of coal falls faster than the capacity to burn it. India is reportedly considering a net-zero carbon emissions target, as well, which if adopted might spur a more rapid decline of coal.
But whatever the pace of coal’s demise, it won’t go easily.
At the same time, solar energy is racing ahead to such an extent that it will likely encounter obstacles of its own creation unless India moves quickly to continue accommodating its rise.
Today I’ll look at the second part of the transition: the stunning rising of India as a global renewables powerhouse, a development as unexpected as it is monumentally important for the planet’s fortunes. Without India’s embrace of renewable energy, we’d all be looking at a much darker climate future. In another post a week or so down the road, I’ll look at the staying power of coal in India. It’s eye opening how deeply an energy source can penetrate a society — as fossil fuels have everywhere, no less so in the West — and yet equally startling to see how quickly the calculus is changing around what was once, but is no longer, India’s go-to-first fuel option.
Finally, before hitting the ground I’ll quickly review the extensive and daunting climate challenges India faces. They’re not unique in type, but are exceptional in breadth and scale, especially compared to the resources available to address them. These challenges are not unrelated to India’s energy transition, of course, even though Indians, as I noted in my first post, bear little responsibility for the current global warming.
India is also pretty much the only major country keeping ahead of its commitments under the 2015 Paris Accord. But its emissions are rising fast, rising to third on the global emissions rankings, and could eventually top the world charts. There’s also India’s acute air pollution problem, to which fossil fuels contribute no small part. In short, India has plenty of incentives to accelerate the transition, especially if wealthier countries more responsible for the current predicament step up appropriately. For an elegant, if piquant, Indian perspective, read this piece by Samir Saran, who heads a prominent Indian think tank.
So, today renewables, in a week or so coal and finally climate. Those, in a sense, are the perimeters of the project. Then it’s on with the journey.
When it comes to renewables, I oversimplify to say solar because that’s where the action is in India. Hydropower has long been in India. Wind power has grown, and will play an important role going forward. But nothing matches solar energy as the rising star of India’s energy transition drama.
This graph of the falling cost of solar explains why:
The price has continued to fall since the time this chart ends, establishing solar as the single cheapest form of energy in India, even cheaper in most cases than using the country’s own coal. And as fast as the cost has fallen, solar power is being commissioned and brought on line.
This graph is India adding solar faster than any other country over the past five years, a pace topping even world-leader China (which has, in total, installed vastly more solar capacity than any other country). As you can see, the pace slowed last year as covid hit — prompting the Indian government to lock down the country’s economy for two months — but it’s rebounding fast again this year.
India will struggle to reach its own goal of installing 150 gigawatts of renewables (including 100 of solar) by the end of this year. But these figures are pretty mind-bending considering where solar was in India when the landmark Paris Accord was struck in 2015. India now has the third-largest installed capacity of renewable energy, behind China and the U.S. Beyond price, energy security concerns are driving the trend, as well: the dream of not only ending coal imports but also one day electrifying India’s motorcycles and cars. India currently imports virtually all the oil used to power them now, much of it from the Middle East.
So India has actually upped its renewable energy ambitions, now aiming for triple the 2022 goal — or 450 gigawatts of capacity — by 2030, about two-thirds of that solar. Achieving that would cement India’s place as a global leader in energy transition.
But getting there… well, that’s going to be its own journey. So far, India has grasped a lot of low-hanging fruit when it comes to installing solar — starting with the least expensive, easiest to secure land in the sunniest locations. The low levels of solar so far haven’t taxed the electricity grid, but will eventually with greater contributions.
And even vastly more solar growth won’t get rid of coal, or even stop it from growing for at least the next few years. As noted above, that’s because adding solar is far easier when it’s aimed at meeting new energy demand rather than trying to accomplish the impossible — that is, compete with existing coal plants contracted to be paid even if new solar can replace it more cheaply.
If that sounds odd, it really isn’t, globally speaking. But India has this conundrum in spades, as we’ll dig into in the next post.
Interesting question, and one I’d be keen to hear yours and others’ views on. Seems like it would be a combination of all those things, no? And, increasingly, as this new world of energy evolves, you might even want to throw in the geopolitical power that would presumably come from exporting renewables, either in the form of green electricity sent through power lines or green hydrogen or ammonia shipped from one country to another....
Look forward to your next installments, Bill. To what extent do diminished Himalayan glaciers threaten India’s hydro and make the renewable challenge even harder? or is that just doomcasting?