Solar power generation is now cheaper than coal power generation, India’s energy minister Piyush Goyal said on Monday.
The latest auction of solar energy capacity in India achieved a record low price of 4.34 rupees per kilowatt hour, a record low price, which prompted Goyal to say that solar energy is now cheaper than coal-fired energy generation. Climate Home reported that Goyal, whose official title is the Minister of Power, Coal, New and Renewable Energy, predicted a surge in solar energy in the near future.
“I think a new coal plant would give you costlier power than a solar plant,” he said. “Of course there are challenges of 24/7 power. We accept all of that – but we have been able to come up with a solar-based long term vision that is not subsidy based.”
According to Climate Home, solar energy prices in India is 4.34 rupees a kilowatt-hour, in comparison to coal tariffs range of three to five rupees a kilowatt-hour.
Deutsche Bank, for their part, seems to agree with Goyal’s predictions in a report released last year entitled, “Make Way for the Sun.” In it, Deutsche Bank not only says that capital costs for solar energy have fallen 60 percent in the last four years and could drop another 40 percent, but also says that investments in solar energy would overtake investment in coal by the year 2020. Deutsche Bank raised their solar power forecast by 240 percent, predicting that investment in Indian solar energy by global players could top $35 billion.
The realities of electricity are changing fast. In October of last year, a report by Fortune said that clean energy generation was “becoming mainstream,” and more importantly cheaper.
Fortune noted that electricity generated by solar and wind farms was now cheap enough to compete with coal and natural gas in many areas of the world, though solar panel farms has a higher operating cost than large wind farms. However, the cost of solar-generated electricity has also been lowered significantly in recent years. Fortune stated that a drop in the cost of technology and lower financing costs would soon make clean energy mainstream.
“Wind farms and solar panel farms are no longer niche technologies. As more countries and states enact market systems that put a price on carbon emissions, clean energy technologies will actually become cheaper than fossil fuel technologies. In fact, they already are in places like the U.K. and Germany, which have aggressive carbon policies.”
The news that wind and solar can now compete with fossil fuels, coupled with the shift in technology and the subsequent shifts in the market, could have enormous impacts on the world’s energy infrastructure.
Bloomberg New Energy Finance posted a press release for 2015 in which they say the fiscal year had the highest-ever installation of renewable power capacity, particular in places like China, Africa, India, Latin America, and even the United States. The global figure was a record $328.9 billion. Notably, the commissioned 64 gigawatts of wind and 57 gigawatts of solar marked an increase of nearly 30 percent over the 2014 figures.
During his speech, Goyal also said that India was on track for its program to increase its solar power generation by 500 percent to more than 100 gigawatts by 2022. Nearly 20 gigawatts of solar capacity was approved by the government of India, with a further 14 gigawatts planned for the rest of 2016 according to the country’s budget.
“On the solar front, we believe there is enormous potential to take it to 100,000W in next 5-7 years,” the minister said, quoted in a separate report by Climate Home.
Goyal added that India is willing to assist developing countries in Asia, Africa, and the Pacific to develop plans for clean energy free of charge.
[Photo by Robert Nickelsberg/Getty Images]