India’s Solar Growth Slows as Coal Reliance Rises

Shift in Energy Strategy Raises Concerns About Climate Goals

by Victor Adetimilehin

India’s ambitious clean energy goals are facing a significant hurdle as the country’s solar power generation witnessed its slowest growth in six years during the first half of 2024. This slowdown coincides with a surprising uptick in reliance on coal-fired power plants to address the nation’s rapidly growing electricity demands.

Coal Surges While Solar Growth Stagnates

Data from Grid-India, India’s federal grid regulator, paints a concerning picture. Electricity generation from coal power plants jumped by 10.4% in the first six months of 2024. This growth outpaced the overall increase in power generation (9.7%) during the same period.

While India, the world’s third-largest solar power producer, still managed to increase its solar energy output to 63.6 billion kilowatt-hours (kWh) in the first half of 2024, this represents a sluggish growth rate. The 14.7% increase compared to the same period in 2023 falls short of the impressive 18.5% growth recorded in the entire calendar year of 2023.

This shift towards coal highlights a potential conflict between India’s immediate need for energy security and its long-term clean energy ambitions. The nation is prioritizing ensuring a steady supply of electricity to meet its booming economy’s demands, even if it comes at the expense of its climate change commitments. Notably, in 2023, coal-fired power output surpassed renewable energy generation for the first time since India signed the Paris Agreement on climate change in 2015.

Regional Trends and Future Outlook

India’s growing dependence on coal reflects a broader trend across Southeast Asia. Neighboring countries like Indonesia, the Philippines, Vietnam, and Bangladesh have all exhibited similar increases in coal reliance for affordable power generation during their post-pandemic economic recoveries.

The share of coal in India’s power generation mix has risen steadily over the past four years. In the first half of 2024, it reached 77.1%, compared to 76.6% in the same period of 2023. This trend is projected to continue, with coal likely to remain the dominant source of electricity for the foreseeable future.

India’s total electricity generation is expected to witness its fastest growth in over a decade during the fiscal year ending March 2025. However, this growth is primarily driven by an anticipated 8.9% increase in coal-fired power output, outpacing the projected 8.2% growth in renewable energy generation.

Reasons for Optimism: Renewable Rebound on the Horizon

Despite the current slowdown, analysts remain optimistic about a rebound in renewable energy in the coming years. Increased tendering and commissioning activity for green energy projects suggest a potential acceleration in renewable energy growth from the next fiscal year onwards.

Moody’s Investors Service unit ICRA predicts a significant rise in renewable energy installations, expecting them to surpass 25 gigawatts (GW) by the end of the current fiscal year in March 2025. This would represent a growth of over one-third compared to previous installations.

India faces a complex challenge in balancing its immediate need for energy security with its long-term commitment to clean energy. The coming years will be crucial in determining how effectively the country can navigate this challenge. Continued investment in renewable energy infrastructure and a renewed focus on energy efficiency will be essential if India is to achieve its ambitious clean energy goals while ensuring a reliable power supply for its growing population. The success of India’s clean energy transition will be closely watched by other developing nations around the world.

Source: Reuters

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