India Is Leaping Ahead in Clean Energy

October 27, 2020

Long considered climate policy’s problem case, India is exceeding targets and breaking records thanks to fast-advancing technology.

o country will contribute more to the rise in global carbon emissions than India. Energy consumption among its 1.4 billion people is rising fast, with 65 percent of the country’s electrical power currently generated from coal. The world’s filthiest fossil fuel—of which India consumes more than the United States and Japan combined—will “remain ingrained under the fingernails of the nation” because of “politics, economics, and the complications of generating electricity.” So said the Economist in a 2018 briefing.

The British magazine’s briefing perfectly encapsulates the widespread view of India as climate policy’s problem child. But the conventional wisdom couldn’t be more wrong. Little noticed in the West, India is undergoing a green-energy revolution—exceeding targets, breaking records, and quickly making the age of cheap clean energy a reality.

Because of the dominance of India’s coal industry, few experts ever expected India to be on track to significantly exceed two key commitments to the Paris Agreement. One is India’s pledge to increase the share of power-generation capacity that doesn’t use fossil fuels to 40 percent by 2030; today, generation capacity from renewable, hydroelectric, and nuclear sources already reaches 38 percent, putting India on track to comfortably exceed its target. The other commitment is to reduce carbon emissions by 33 to 35 percent (from 2005 levels) by 2030. Today, India looks likely to reduce emissions by as much as 45 percent by 2030, far surpassing its Paris target.

India has set its own ambitious renewable-energy goals—and is exceeding even them. Its fossil-fuel power-generation capacity is presently about 230 gigawatts (GW), of which 205 GW come from coal. When, in 2015, Prime Minister Narendra Modi announced plans to build 175 GW of new renewable-energy capacity by 2022, the announcement was met with skepticism. After all, India at the time only had renewable generating capacity of 34 GW. According to Amitabh Kant, CEO of the government policy think tank NITI Aayog, India has already installed 89 GW of renewable power capacity and will achieve Modi’s 175 GW target as planned.

Modi’s ambition and India’s successes stand in sharp contrast to the United States, where clean-energy initiatives are highly politicized. The Democratic nominee for president, former Vice President Joe Biden, has developed an ambitious $2 trillion plan to produce 100 percent of the country’s energy from cleaner sources by 2050, but even if he wins on Nov. 3, this is all but certain to face opposition and roadblocks. India, on the other hand, was able to impose a tax on coal production equivalent to $6 per ton with nearly unanimous approval from the 36 political parties represented in the Indian parliament.

India’s clean-energy initiatives have the wind at their back thanks to global advances in green technology—especially solar power, wind power, and energy storage. These technologies are progressing exponentially and have entered a virtuous cycle: As prices for these technologies fall, demand for them rises, and as production is expanded to meet demand, prices fall some more, all of which contributes to accelerating adoption. When Bell Labs built its first solar photovoltaic panel in 1954, the panel cost $1,000 per watt of electrical power it could generate. By 2008, the modules used in solar arrays cost $3.65 per watt; by 2018, that figure had fallen to less than 40 cents. In India that year, solar power generation crossed an important threshold, becoming cheaper than coal (by 14 percent on a “levelized” basis, which adjusts for the impact of subsidies, construction costs, and financing). Fast-plunging costs have allowed India to increase its solar-power generation capacity more than tenfold since 2015.

Other renewables, too, follow this trend. Wind power became cost-competitive with coal in 2018, and costs continue to plummet. Battery technology, once the crucial weak link in renewable energy, is rapidly approaching the point where it solves a critical problem that has held most clean energy back: Solar panels only generate power when the sun shines and windmills only turn when it is windy. Until now, the dirty secret of green power has been that every gigawatt of sometimes-on, sometimes-off renewable generating capacity has required another gigawatt of fossil-fuel power generation capacity to stand by as a backup. Batteries resolve that conundrum by storing power and releasing it when needed; a more brute-force, low-tech method of storing wind or solar power is to pump water up a hill into a reservoir, from where it can generate hydroelectric power on demand.

India made green history this year, breaking not one but two records. In January, it conducted the world’s largest tender for renewable power that no longer requires fossil-fuel backup. One company, Greenko, will provide 900 megawatts of uninterrupted, unsubsidized power using a combination of solar panels and hydroelectric storage. Another, ReNew, will supply 300 MW of steady power using solar panels and battery storage. In May, ReNew made another successful bid to provide 400 MW of solar power with battery storage. At a levelized first-year cost of 2.90 rupees ($0.04) per kilowatt-hour, it will be among the world’s lowest rate for uninterrupted renewable power—finally making generating and storing clean energy cheaper than burning coal.

India is a major beneficiary of these technological advances because it is rapidly adding generating capacity as it develops, avoiding many of the costly and politically charged adjustments as developed countries replace one energy technology (and its jobs) with another. It also has large stretches of sunny, sparsely populated land for acreage-hungry solar arrays. Low labor costs make the installation and maintenance of renewable generation inexpensive; solar is a low-skilled sector once the panels have left the factory. As India imports the vast majority of its oil and a significant part of its coal, it is happy to replace costly imports with home-generated clean energy, which also helps explain the relative lack of opposition to it.

What’s more, the country’s power supply has been unreliable, its national energy grid feeble, and electricity beyond the reach of nearly 100 million rural homes. As solar panels and battery storage become cheaper and diffuse across the subcontinent, a major impediment to India’s development and prosperity will be removed. That’s something Tata Power and the Rockefeller Foundation hope to accelerate: Last November, they announced a collaborative effort to set up 10,000 so-called microgrids in Indian villages by 2026, connecting more than 5 million households to small distribution networks of local renewable power.

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