India, Once a Coal Goliath, Is Fast Turning Green by Geeta Anand
MUMBAI, India — Just a few years ago, the world watched nervously as India went on a building spree of coal-fired power plants, more than doubling its capacity and claiming that more were needed. Coal output, officials said, would almost triple, to 1.5 billion tons, by 2020.
India’s plans were cited by American critics of the Paris climate accord as proof of the futility of advanced nations trying to limit their carbon output. But now, even after President Trump pulled the United States out of the pact, India has undergone an astonishing turnaround, driven in great part by a steep fall in the cost of solar power.
Experts now say that India not only has no need of any new coal-fired plants for at least a decade, given that existing plants are running below 60 percent of capacity, but that after that it could rely on renewable sources for all its additional power needs.
Rather than building coal-fired plants, it cancelled many in the early planning stages. Also, the government lowered its Annual Production Target for coal to 600 million tons from 660 million.
The sharp reversal, welcome news to world leaders trying to avert the potentially deadly effects of global warming, is a reflection both of the changing economics of renewable energy and a growing environmental consciousness in a country with some of the worst air pollution in the world.
What India does matters, because it is the world’s third-largest emitter of greenhouse gases, behind China and the United States. And its energy needs are staggering — nearly one-quarter of its population has no electricity and many others get it only intermittently.
With India’s power needs expected to grow substantially as its economy continues to expand, its energy use will heavily influence the world’s chances of containing the greenhouse gases that scientists believe are driving global warming.
Much attention at the time of the signing of the Paris agreement was focused on the role President Barack Obama played in pushing India’s prime minister, Narendra Modi, to sign. In doing so, Mr. Modi committed India to achieving 40 percent of its electricity capacity from nonfossil-fuel sources by 2030.
Less understood was Mr. Modi’s longstanding personal commitment to taking India in a greener direction. That has been strengthened in recent years by growing evidence that a greener path makes political and economic sense as well, says Harsh Pant, a fellow at the Observer Research Foundation, a New Delhi-based research organization.
“Modi’s constituency is the middle class, and the middle class in Indian cities is choking on pollution,” Mr. Pant said. “Modi knows climate change is good politics. Climate change makes sense to Modi because he believes it as it is good economics and politics.”
Two major economic factors lie at the heart of India’s move away from coal. The first is the country’s growth rate, much of which has come in service industries rather than in power-hungry manufacturing.
Equally important is the startling drop in the price of renewable energy sources. Many energy experts say renewables are poised to become a less expensive alternative to coal within the next decade.
“The train has left the station. Mr. Trump has come too late” to slow the transition to renewable energy, said Ajay Mathur, director general “By the time the coal-fired plants come up to full capacity because of increasing demand, the price of renewables will be lower than the price of coal.”
Based on December 2016 Data from the Central Electric Authority, Mr. Mathur’s institute reported in March that India might be able to meet its additional power needs in the future with renewable energy.
It based that prediction on the remarkable drop in the cost of solar power. In approving proposals for new solar power plants, the Indian government seeks bids from prospective builders who compete to pledge the lowest price at which they anticipate selling power.
Seven years ago, the lowest bid came in at 7 rupees, or 11 cents, per kilowatt-hour. In early May, the lowest bidder came in at less than half of that price, or 2.44 rupees per kilowatt-hour, a little under 4 cents, experts here say.
The latest bid makes solar power less expensive than coal, which sells for about 3 rupees per kilowatt-hour.
Storage costs, a critical component of renewable energy systems, have also fallen. “The crucial question has been, ‘Yes, but what do you do when the wind doesn’t blow and the sun doesn’t shine?’” said Adair Turner, the chairman of the Energy Transitions Council, which studies climate issues.
The cost of lithium ion batteries, the gold standard in solar power storage, has fallen significantly, Mr. Turner said, largely because of economies of scale. Where the price was about $1,000 per kilowatt-hour more than five years ago, it is now $273 and dropping, Mr. Mathur said.
The price needs to fall to $100 per kilowatt-hour for renewable energy to be comparable in price to coal, Mr. Mathur says. Mr. Turner thinks that will happen far sooner than the year 2030, which his group had been predicting.
“To be blunt, the success of this has been bigger than I certainly realized,” Mr. Turner said. “There were people who were optimists, and it’s the optimists who have won out.”
New Delhi had long argued that it was hypocritical of Western nations that have burned fossil fuels for centuries to ask Indians to sacrifice their growth to cope with the effects. But the Modi administration has set ambitious targets for a greener Indian future.
The government pledged in 2015, when the country’s electricity capacity from renewables was 36 gigawatts, to increase it to 175 gigawatts by 2022.
Piyush Goyal, India’s power minister, announced in a speech in late April 2016 that the country would take steps to assure that by 2030 only electric cars would be sold.
“That’s rather ambitious,” Rahul Tongia, a fellow at Brookings India, said. “The targets are there. The vision is there. The question is: ‘Is it going to happen? How?’”
The Indian government’s policy research arm, the National Institution for Transforming India, or NITI Aayog, recently released a report in collaboration with the Rocky Mountain Institute in Boulder, Colo., that calculated India could save $60 billion and reduce its projected carbon emissions by 37 percent by 2030 if it adopted widespread use of electric vehicles and more public transportation.
Mr. Mathur says that even if India falls short of those ambitious goals, just coming close will have a huge impact on the concentration of greenhouse gases in the world and pollution within the country.
“Even a year and a half ago, I didn’t expect we would go out on a limb and say electric vehicles are a public policy goal for us. It is truly exciting,” he said in an interview.
Besides reducing the choking pollution in India’s cities, moving to electric vehicles also makes sense because the country has excess generation capacity in the underused coal-fired plants and is too heavily reliant on petroleum imports, which present a geopolitical risk.
“There has for a very long time been a push to reduce the growth in imports,” Mr. Mathur said. “This is one of those perfect policy opportunities, with short-term and long-term benefits.”
Navroz Dubash, a fellow at the Center for Policy Research in New Delhi, cautions that even though India is likely to meet its additional energy needs in the future from renewable sources, that does not mean India is about to stop burning coal tomorrow.
“It is important not to draw from this that India’s tryst with coal is necessarily done,” Mr. Dubash said, “just that there are signs it will end sooner and at a lower level than expected.”
India canceled 13.7 gigawatts of proposed coal-fired power plants last month alone, the Institute for Energy Economics and Financial Analysis said. The government has admitted that an additional 8.6 gigawatts of coal-fired generation capacity built at a cost of $9 billion is potentially no longer financially viable because of competition from renewable sources, the institute said.
This is hopeful news for the world, said Mr. Tongia, because the only way for the world not to grow too warm is for “developing countries, especially India, to do more, to come in lower than budget, to do their unfair share.”
And, Mr. Tongia said, “the good news” is that India has decided that it is in its interest to do its “unfair share.”