How could the world’s third-largest coal consumer use coal to get more solar power?
India’s government is ordering its state-owned utility, NTPC, to sell electricity from solar power along with electricity from coal-fired power in order to boost solar’s position in the country. The decision, dating back to the middle of July but first reported by Bloomberg, mandates that the utility sell currently-cheaper coal power bundled into one unit with solar power, which is currently more expensive.
This could have the effect of expanding the production and usage of solar power, making it less expensive for distribution companies to bring it to customers. India’s power distribution companies are also run by the government, and had been losing money when buying more expensive electricity and selling it at a lower price.
The other effect, of course, will be the continued use of quarter-century-old coal plants that will get their power output bundled with newer solar plants coming online. This helps guarantee the coal plants’ operation, as well as their carbon emissions.
“These plants are already 25 years old,” Rupesh Agarwal, a partner at BDO India LLP, told Bloomberg. “Will they function for that many more years? Do we need to extend the lives of these plants to bundle with solar energy when solar on a stand-alone basis is becoming competitive?”
NTPC will construct 15 gigawatts of solar over the next four years as a part of this deal.
Coal India, the largest coal company in the world, has seen the value of solar for years — the company has installed solar panels at mine installations across the country.
Prime Minister Narendra Modi committed to 100 gigawatts of solar capacity in the next seven years, which will be a large increase from the current 4.5 gigawatts. This capacity will be an almost even split between distributed rooftop installations (about 40 gigawatts) and larger grid-connected solar farms.
Boosting solar capacity to 100 gigawatts would be hard, as the Indian consulting firm Bridge to India recently estimated the country was on track to install 31 gigawatts over the next four years.
Should they achieve it, this will help achieve the other major energy goal put forth by the government: bringing electricity to the 400 million households that currently do not have it. This means more power, from everywhere. Renewable prices — especially solar — are dropping, which helps those trying to limit the growth of India’s carbon emissions. At the same time, India has become more and more dependent upon imported fossil fuels — including coal despite significant domestic reserves. Recent reports have predicted that India will outpace China in coal imports in the near future.
“Despite its significant coal reserves, India has experienced increasing supply shortages as a result of a lack of competition among producers, insufficient investment, and systemic problems with its mining industry,” according to the U.S. Energy Information Administration. “Although production has increased by about 4% per year since 2007, producers have failed to reach the government’s production targets.”
China has committed to slowing and reversing its coal usage due to climate and air quality concerns. A recent study found that over 17 percent of all deaths in China are related to high pollution levels. Yet Indian cities have to struggle with some of the worst air pollution in the world.
It’s not just solar that has a lot of potential in India. A study released last week found that India’s wind energy capacity is much higher than originally anticipated — 302 gigawatts for turbines with hubs reaching 100 meters, compared with the 100 gigawatts previously thought.
The government is also trying to keep energy demand low — last month, Energy Minister Piyush Goyal committed India to replace all conventional streetlights with LEDs within two years. This will cut demand almost to almost a third of current levels — 3,400 megawatts to 1,400 megawatts. Fortunately for them, LED streetlight prices have dropped almost by half in the last year.