A few weeks back, Deutsche Bank revised its solar forecast for India up from 14 GW by 2020 to a promising 34 GW by 2020, which was in line what Bridge To India had proposed (31 GW by 2019), while the Indian government itself is chasing a target of 100 GW by 2022.
Now a report released by the Cleveland-based Institute for Energy Economics and Financial Analysis (IEEFA) predicts that the installed capacity of solar power in India can reach 75 GW by 2022, delivering up to 110 TWh, or 22%, of the required electricity increase in the country during the same period.
The report, India’s Electricity Sector Transformation (PDF), provides an analysis of the electricity sector in India. It states that the Indian Government is on track to achieve its goals of doubling domestic coal production, modernising the electricity grid and installing 175 GW of renewable energy.
Powered by a GDP growth rate of 7% per year, the IEEFA estimates a 500 TWh increase in net electricity demand in India to 1,318TWh per annum by 2021-22. Plans to take wind installations to 60 GW could deliver 19% of the increase, with an additional 26% coming in from a combined capacity expansion across nuclear, gas, biomass, and hydropower. All in all this would reduce coal to less than a third of the total expanded electricity production required.
As per Tim Buckley, Director of Energy Finance Studies at IEEFA:
“India is replicating Germany’s and China’s systematic electricity sector transformation, with the added advantage that the cost effectiveness of this is accentuated by the fact that the price of solar electricity has dropped by 80% in 5 years.”
The report also forecast Indian thermal coal imports to peak in 2015, before declining rapidly at about 20% per annum thereafter. This would be both due to the strong focus on sorting out domestic coal supply chain issues and rapidly falling solar power cost. Piyush Goyal, India’s energy minister has declared several times that India is working to completely stop its coal imports over the next two years.
Read recent updates from the Indian solar market over here.