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LITTLETON: India’s rapid progress in solar power production has been widely hailed as showing how fast-growing economies can accelerate the decarbonisation of their energy systems without compromising economic growth.
But while the pace of solar adoption in India has been impressive, progress has largely come at the expense of natural gas – they have had little impact on the use of coal as the primary source of electricity.
Indeed, India increased the amount of electricity generated from coal in the first 10 months of 2022 compared to the same period in 2021 and reduced gas-fired generation by nearly 40 percent, according to data from Ember.
This has resulted in a steady rise in emissions in India’s power sector, even as solar’s share of the country’s electricity generation has more than doubled since 2019.
SOLAR SURGES
Between 2017 and 2021, India’s solar power generation capacity more than tripled, ranking third in the world in terms of solar capacity growth over that period, according to the BP Statistical Review of World Energy.
And the country plans to more than double its solar capacity base by 2025, leaving it highlighted by the International Energy Agency (IEA) as a key driver of its recent dramatic upward revision of its global outlook for renewable energy supply.
India Solar Energy Capacity Projections https://fingfk.thomsonreuters.com/gfk/ce/jnvviivkivv/IndiaSolarIEA2022.png
On paper, such rapid progress in the supply of green energy should lead to reduced pollution by the country’s energy producers.
However, cumulative emissions from India’s energy sector hit new highs in the first 10 months of 2022, surpassing 818 million tonnes of carbon dioxide and equivalent gases. That is almost 7 percent more compared to the same period in 2021.
The main driver of the rise in electricity pollution was a 7.7 percent increase in emissions from coal-fired generation, which accounted for 72 percent of the country’s electricity and 97 percent of the power sector’s emissions through October, Ember data showed.
GAS SQUEEZE
While coal’s share of India’s electricity mix remained fairly flat at that elevated level, the share of gas-fired electricity fell sharply in 2022 to just 1.6 percent, the lowest level since at least 2019.
Record high liquefied natural gas (LNG) prices were the main reason for this decline in gas use, as cost-conscious utilities balked at paying more than twice as much for spot LNG cargoes in 2022 than they averaged in 2021.
Reduced demand for LNG has also reflected in India’s overall LNG imports. They fell 16 percent through November compared to the same period in 2021, according to Kpler ship tracking data.
That sharply lower LNG imports by India – the fourth-largest importer in 2021 – freed up LNG cargoes for others in 2022 and helped ease Europe’s electricity crisis resulting from sharply reduced deliveries of Russian natural gas pipelines amid the war in Ukraine.
However, for India’s power producers, with limited options for baseload power generation, less gas simply meant they had to burn more coal in 2022.
This is because while non-emitting solar power contributes to the overall electricity supply during the day, India’s overall grid requires a stable baseload power supply at all times, especially at night. This can be efficiently produced by burning fossil fuels.
Natural gas was expected to eventually replace coal as the preferred primary fuel in India, thanks to planned investments in infrastructure and pipelines for importing gas, as well as policy support to reduce the use of polluting coal in electricity generation.
But the recent spike in gas prices now threatens to not only halt, but reverse those trends, halting gas-related investment and supporting continued reliance on coal.
Solar will remain the new fuel of choice for businesses developing additional power generation capacity in India, thanks to government subsidies and widespread support for green energy expansion.
But if global gas prices remain elevated through 2023, India’s power producers will continue to burn more coal than ever to generate baseload power, undermining the environmental benefits of a record expansion in renewable energy supply.
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