The Independent newspaper reported that India has been cancelling plans for new coal-fired power stations. Since the cost of solar power has dropped lower than coal, and looks to drop lower still, it’s the obvious way forward.
This demonstrates what I call “the power of the wallet”, in that we don’t achieve clean power by mandating it, but once it becomes cheaper it will happen naturally. For this reason, I consider the drive to use coal again in the USA unimportant, in that we’re naturally reaching the end of that era and there’s really not a lot that a political declaration can do about that. It’s maybe better to allow the natural changes to happen at their own rate rather than forcing closures, in that that gives more time for the coal miners to create other jobs for themselves – this sort of social change takes some time anyway and when it happens too fast causes severe hardships. Though this will to some extent apply in India as well, since coal use will not be suddenly curtailed but instead they won’t be expanding the use of it then the social effects won’t be too great except of course that the pollution levels will go down. Looks like a win-win situation to me.
You can read the Independent’s article here, and I’ll quote a bit of it as well:
Analyst Tim Buckley said the shift away from the dirtiest fossil fuel and towards solar in India would have “profound” implications on global energy markets.
According to his article on the Institute for Energy Economics and Financial Analysis’s website, 13.7GW of planned coal power projects have been cancelled so far this month – in a stark indication of the pace of change.
In January last year, Finnish company Fortum agreed to generate electricity in Rajasthan with a record low tariff, or guaranteed price, of 4.34 rupees per kilowatt-hour (about 5p).
Mr Buckley, director of energy finance studies at the IEEFA, said that at the time analysts said this price was so low would never be repeated.
But, 16 months later, an auction for a 500-megawatt solar facility resulted in a tariff of just 2.44 rupees – compared to the wholesale price charged by a major coal-power utility of 3.2 rupees (about 31 per cent higher).
“For the first time solar is cheaper than coal in India and the implications this has for transforming global energy markets is profound,” Mr Buckley said.