Blog: Cleaner & cheaper, solar power beats coal

The Covid crisis has diverted attention from a breakthrough that should leave everyone smiling. ReNew Power won the last auction of 400 MW of solar energy, including storage, at a level rate of Rs 3.52 / unit for 15 years. The equivalent thermal energy rate would have been closer to Rs 4.5 / unit. Solar power has outperformed coal-based off-grid energy, and would do so even if carbon taxes and ceases were lifted. Most of the future power generation can be solar without subsidies.

Carbon-based thermal energy will still be needed as a backup, but very little new capacity is required. Meanwhile, the old inefficient thermal power plants will be replaced by new efficient ones. That implies a virtual stop in future emissions of carbon dioxide, sulfur, mercury, particles and other pollutants. India does not need additional carbon taxes to induce a shift towards renewable energy. The change is already here.

Solar energy has had a bright outlook for years as the price of solar panels continues to drop. However, solar power is generally available only 30% of the time, not available at night or when clouds and pollution block the sun. However, thermal plants can work 80% of the time.

During the day, India now has excess energy capacity. Solar generation has priority, while the thermal stations have to go back until sunset. The priority to solar energy makes sense from an economic point of view, since it does not imply running costs, while thermal energy carries fuel costs. But thermal plants that once ran 75% of the time have been forced to go back just 55-58% to accommodate growing solar production. This hidden cost of solar energy cannot be fully assumed by the thermal sector, which needs a new tariff formula to cover capital costs in generation and transmission when it is forcibly inactive.

In the gigantic 1,200 MW Bhadla solar park in Rajasthan, the winning auction in 2018 was just Rs 2.44 / unit. But it had no provision for storage, something experts estimated would add Rs 2 / unit to the rate. That meant that solar energy was no cheaper than thermal energy and could not be turned on and off at will, as thermal plants could be.

However, the new 400 MW deal won by ReNew Power includes enough storage to guarantee 80% capacity utilization for one year and not less than 70% in any month. This is not 24/7 power, but it is as efficient as thermal energy and much cheaper. So it is a breakthrough.

From Times of India