November 27, 2017 Read More →

Plunging Cost of Solar Means Peak Coal Looms in India


We are clearly heading into a rapidly decarbonizing global energy system at a rate that has been previously unimaginable.

The Institute for Energy Economics and Financial Analysis (IEEFA) has been analyzing the rapidly decarbonizing Indian economy for many years now.

The last two years has seen a 50% decline in both wind and solar tariffs to a record low US$38/MWh in 2017, more than 20% below the cost of existing domestic thermal power generation tariffs.

Many commentators have commented on the energy market disruption that has resulted and questioned if these record low renewable energy tariffs in India can be sustained or replicated.

What has happened in Mexico and Chile, two countries that have also has seen solar costs fall by more than 50% in less than two years gives proof that in the medium these Indian tariffs are not just sustainable, but likely to see even further deflation.

New modeling by IEEFA predicts that India is also within a decade of peak coal demand for the power sector. This is sooner than anyone has predicted. Under this scenario, Australia’s thermal coal export sector is set to take another hit.

IEEFA’s report, “Indian electricity sector transformation”, presents a sector model out to 2027 that sees a transforming energy market with a dramatic market share gain by renewable energy.  This in turn delivers sustained energy sector deflation.

By comparison, the International Energy Agency (IEA) World Energy Outlook 2017 forecasts India’s coal use will continue to expand, doubling by 2040 in its New Policy Scenario.

Plunging cost of solar means peak coal looms in India

Posted in: IEEFA In the News

Comments are closed.