NEW DELHI (Reuters) – India’s demand for electricity is expected to double in the next two decades, and coal has been long forecast to be the fuel of choice for power generation. But this may no longer be the case.
It’s not that India doesn’t have plentiful reserves of coal. It does, and it is the world’s second-largest producer and importer, following China. It’s not even that India’s reserves are expensive to mine. They aren’t.
It’s not even that transporting coal from where it’s mined to where it’s needed is too difficult. Yes, it is an issue, but this challenge could be overcome with sufficient investment in rail and other infrastructure.
No, the main reason coal may battle to fuel India’s future energy needs is that it’s simply becoming too expensive relative to renewable energy alternatives such as wind and solar.
In recent months, power supply auctions have shown that renewables can be offered at less than 3 rupees (4 U.S. cents) per kilowatt hour, a tariff that coal-fired generators have difficulty matching.