Coal-based power's market share at decade low, green energy nearly doubles

<p> </p><p>The market share of coal-fired power plants to total generation in the country has slumped to a decade low as renewable power gains currency, a study showed.</p><p>A report by US-based think tank, Institute for Energy Economics & Financial Analysis (IEEFA) says while coal-fired power generation is on track to represent 71.8 per cent of total generation (54.5 per cent of capacity) in 2019-20, this is a decade low market share. To substantiate, the report adds that the total generation from renewable is set to nearly double from three years earlier, exceeding the share of green energy in total generation to over 10 per cent for the first time.</p><p>In terms of net new capacity installs to date in 2019-20, 5.7 Gw or two-thirds have been contributed by renewables whereas thermal power witnessed a net addition of 3.1 Gw.</p><p>“Long term, IEEFA expects renewables utilisation rates in India to progressively rise beyond 24-25 per cent as newer technology, repowering of end-of-life wind farms, and greater use of solar tracking or bi-facial modules progressively improves the sector average by 2030. Investors continue to pivot away from Indian thermal power generation due to renewable energy being the lowest cost source of new power generation, and the ongoing shortages in cost-effective fossil fuels continuing”, the IEEFA report added.</p><p>IEEFA forecasts cumulative renewable energy capacity to expand 17 per cent year-on-year (y-o-y) to 93.5 GW by the end of 2019-20, adding a total of 13.5GW in 2019-20. However, with a less windy monsoonal period, renewables generation is up only 9.3 per cent y-o-y to October 2019, and utilisation rates are on track to tick down in 2019-20 to 19.2 per cent (after 19.8 per cent in 2018-19).</p><p>On the flip side, a host of policy issues including some policy contradictions by the central government have seen the momentum for renewable energy installations stall over the last 12 to 18 months. Over 5 Gw of tenders have been cancelled and another 6 Gw of auctions were under-subscribed due to insufficient investor interest, reflecting a number of policy headwinds. Investor interest faded primarily due to poor terms and excessively low tariff caps.</p><p>Despite this, 38 Gw of renewable energy auctions have been completed while another 25 Gw tenders have been called.</p><p>“With solar module prices down 15 per cent year-on-year in 2019 in the Indian market, renewables are set to maintain or expand their cost advantage over expensive, polluting, emissions/water intensive thermal power generation. Technology developments and economic advantages strongly intertwine with a clear government ambition to put India in a position to transform its electricity sector over the coming decade. IEEFA expects the renewable sector to rebuild momentum into 2020.” the report noted.</p><p>Referred from business standard, 3 December 2019.</p>