India can achieve 30 percent of variable renewable energy generation by 2030 at no extra cost, according to a report by The Energy and Resources Institute (TERI).
TERI said the levelised cost of electricity (LCOE) from ground-mounted solar projects will fall from Rs 2.87 a unit in 2018 to Rs 2.30 a unit in 2030.
Tariffs from onshore wind projects will fall from Rs 2.85 a unit in 2018 to Rs 2.58 a unit in 2030.
The report said the baseline projection for 2030 for the levelized costs of wind at 2.58 Rs/kWh could be as low as 2.26 for projects with higher capacity utilization factors.
There will be costs reductions in storage technologies. The levelized costs of solar plus three hours of storage could fall from 13.6 Rs/kWh to 6.34 Rs/kWh. The levelized costs of stand-alone storage could fall from around 29.0 Rs/kWh to 11.9 Rs/kWh by 2030. This decline in storage costs could be transformational in terms of facilitating high penetrations of cheap solar in the Indian grid.
Ajay Mathur, director general of TERI, said: “We knew that renewables were cheap in India, but there were concerns that balancing their intermittency would raise consumer costs. This need not be the case: a high renewables system is cost-effective.”
TERI also projects a reduction of 3 percent per year till 2024 from 2018, 2 percent from 2024 to 2027, and 1 percent after 2027 in the capital cost of solar photo voltaic technology. The reduction in the capital cost is considered due to technological improvement and optimised manufacturing processes. For wind, a moderate annual rate of decline in capital costs of 1 percent per year is considered.
The investments required in a high renewables scenario at Rs 1.65-1.75 trillion annually are slightly above the rate achieved over the last 10 years, which was around Rs 1.4 – 1.5 trillion per year.