Renewables most resilient to Covid-19 lockdown measures, says IEA “The pandemic tipped the scale in favour of renewables for cleaner and cheaper power,” he said, adding that coal’s share in power generation will continue to decline in the medium to long term.įor Dangra, 2027 could mark the peak in capacity when India “will likely not need any new coal plants”. “The resilience of the renewable model was established during the lockdown,” Abhishek Dangra, senior director at S&P Global Ratings, told Climate Home News. Powered by sun and wind, renewable generators are not exposed to the same supply chain disruptions as fossil fueled plants. In India, the sector benefits from a “must-run” status compelling power distribution companies to use solar or wind energy whenever it is generated. The competitive cost of renewable energy is not the only reason for the sector’s resilience in a period of low demand. “Coal capacity could peak before 2025,” he said, noting a peak in coal generation will take longer. “Now the pandemic makes that trend much clearer,” Dahiya said. Meanwhile, the coal sector has been faced with cash flow issues over the past few years, with most plants running well under capacity.Īn analysis by Ieefa found that renewables delivered more than two-thirds of India’s new generating capacity additions in the 2019-20 fiscal year.īefore the outbreak, Sunil Dahiya, analyst at the Centre for Research on Energy and Clean Air, said there was “a clear signal that coal will not fuel future electricity growth,” which will mostly be provided by renewables. Even coupled with more expensive batteries to store electricity for after dark, solar energy was auctioned at a cheaper price than new coal earlier this year. The cost of adding solar electricity stands at about 2.5 rupees per unit generated, compared with around 4.5 rupees for new coal capacity, according to analysts. There was political backing for renewable energy prior to the Covid-19 crisis, emboldened by rapidly falling costs.Īt the UN Climate Action Summit in New York last year, Prime Minister Narendra Modi promised to double India’s renewable target to 450GW by 2030, up from around 87GW installed capacity today. “There is potential for India to really surprise the global community and contribute to the decarbonisation story while doing it in a very cost-effective way.”Ĭomment: After the oil crash, we need a managed wind-down of fossil fuel production “I think we will see the peak in coal use for power generation this decade,” said Tim Buckley, director of energy finance studies for the Australia and South Asia region at the Institute for Energy Economics and Financial Analysis (Ieefa). With the right policy framework in place, coal generation in India could peak much sooner, analysts have told Climate Home News. In 2018, the International Energy Agency forecast Indian coal demand would more than double by 2040 – a major challenge to international efforts to prevent climate breakdown. The world’s second largest coal consumer has seen its energy demand collapse by nearly 30% during the lockdown which started on 25 March, with coal generators bearing the brunt. Travel restrictions to halt the spread of coronavirus are speeding the switch from coal to renewable energy in India.
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