In a move that analysts have termed as “world historic”, power companies offered to charge only Rs 2.62 per kilowatt-hour of electricity generated from solar panels they are slated to build at an energy park in Rajasthan.
The solar sector has already seen a significant decline in tariffs from Rs 10.95-12.76 per kWh in 2010-11. The previous record for lowest bid was last year’s Rs 4.34 rupees per kWh.
This 40% decrease in costs from last year was driven by cheaper finance and accelerating investor confidence in India’s promise to increase its renewable energy capacity.
Another milestone towards PM @narendramodi's vision of clean affordable power for all: Bhadla Solar Park achieves tariff of Rs. 2.62/unit
Bhadla Solar Park is a solar park spread over a total area of 10,000 acres (40 km2) in Bhadla, Rajasthan. The park is proposed to have a capacity of 2,255 MW. (More details here)
Kanika Chawla, a senior programme lead at the Delhi-based Council for Energy, Environment and Water (CEEW), said it was encouraging that Rajasthan project bidders were new players, not the same old market leaders. “It shows there is enough happening to attract investment, attract interest from companies who have otherwise been cautious … Any future incremental gains in prices will not come from the decline in technology prices, they will come from declines in the cost of finance.”
Back in February, wholesale price bids for even wind energy reached a record low of Rs 3.46. These are encouraging developments in India’s push towards renewable energy.
Tim Buckley, a director at the Institute for Energy Economics and Financial Analysis, said the most important factor driving a rush of international investment in Indian renewables was the “transparency, longevity and certainty” of the country’s energy policy. He told The Guardian, “That is absolutely critical because when you invest for 25 to 35 years, you need certainty and clarity of policy.”
By 2022, India aims to have the capacity to generate 175 gigawatts of power from solar, biomass, and wind energy. A draft report by the country’s electricity agency in December predicted that capacity would increase to 275 gigawatts by 2027.
With 8.8GW of capacity addition projected for the year ahead, India is set to become the third-biggest solar market globally in 2017, overtaking Japan, according to the India Solar Handbook 2017.
The government has forecast that it will exceed the renewable energy targets set in the Paris Agreement by nearly half and three years ahead of schedule. The Draft National Electricity Plan predicts that, by 2027, 57% of India’s total electricity capacity will come from non-fossil fuel sources (the Paris climate accord target was 40% by 2030).
The Logical Indian take
Thanks to scientists, environmentalists, activists, and increased awareness, climate change is now taken seriously by most governments in the world. Climate action accelerated in pace particularly after 2015’s historic Paris Agreement. Other than India, other countries have pitched in too.
China, for example, has introduced a cap on coal and will peak coal emission by 2030.
Germany will ban combustion engines by 2030.
In the US, high-profile advocates for the environment have funded a 20-year clean energy fund to the tune of US$1 billion.
Britain recently set a record the world was happy to see: it had its first coal-free power day in 135 years.
Climate change is probably the biggest global problem of our time. Implementing the Paris Agreement will be the first concrete step in reversing the drastic consequences of climate change which have endangered our very existence.
Developments like today’s historically low solar tariff record show a positive movement for our society. Such measures should be applauded and encouraged so that the goals of the Paris Agreement can be met as soon as possible, well before the stipulated time.