India Could Avoid Building New Coal Plants if Battery Costs Drop by 15% Each Year, Says Report

India could avoid building new coal power plants and keep its coal use at current plans until 2032 if the cost of battery storage systems drops by 15% every year, a new report suggests. Currently, about 75% of India’s electricity comes from coal, but to achieve its goal of net-zero emissions by 2070, India needs to shift more towards renewable energy like solar and wind power.

The challenge with solar and wind energy is that they only produce electricity when the sun is shining or the wind is blowing. To use this power when it’s not being generated, energy storage systems like batteries are needed.

The report, created by global energy think tank Ember and The Energy and Resources Institute (TERI) in Delhi, states that if the cost of Battery Energy Storage Systems (BESS) continues to decrease by just 7% per year, coal use in India’s power sector might remain steady until 2032. However, more coal power might still be needed during times when solar power isn’t available.

The report points out that if BESS costs drop by 15% each year, India could stick to its plan of limiting coal capacity to 260 GW by 2032. If battery costs fall even faster, renewable energy could provide 83% of electricity needs during daylight hours by 2032, although only 38% during non-solar hours due to storage limitations.

Building new coal plants carries risks, including the need for frequent adjustments in operation and potential underuse if storage costs fall quickly. A K Saxena from TERI highlights that cheaper storage is key to reducing reliance on coal and speeding up the shift to renewable energy.

The report suggests that no new coal plants might be necessary if the cost of BESS drops to around Rs 60 lakh per megawatt-hour (MWh). Although battery costs have already fallen significantly, they still need to drop by over 50% from current levels to avoid building new coal capacity, especially for non-solar energy needs.

Experts like Neshwin Rodrigues and Nayeem Khan stress the importance of not only lowering battery costs but also increasing renewable energy capacity, securing financing, and improving the flexibility of coal plants to ensure a smooth energy transition in India.