Solar power cost may equal thermal power by 2017 in India
India, Asia’s third largest energy consumer, may be able to produce electricity from the sun as cheaply as from coal and other fossil fuel based power plants by 2017,
According to KPMG LLP.
Mr Santosh Kamath ED of KPMG said that India may install three times as much solar capacity as the government intends by 2022 if sun powered electricity is able to match the cost of conventional power, a point referred to as grid parity.
He added that "We are heading for grid parity and it's just a question of when. In that scenario, the adoption of solar becomes entirely market driven."
KPMG said that solar power costs more than twice as much as the INR 5.42 per kilowatt hour that it costs to deliver electricity to consumers.
Mr Kamath said that the cost of fossil fuel electricity may rise as much as 5.5% annually as India has to buy more expensive imported coal and replace aging plants.
Solar power prices are projected to decline by 7% a year in the next decade on more efficient technologies and lower manufacturing costs.
If solar power becomes competitive with other sources, India could add 39,070 MWs of grid connected solar projects from 2017 and 2022, including residential rooftop panels and 18,455 MWs of solar powered telecommunication towers and agricultural water pumps. The government has set a target of installing 22,000 MWs of solar power capacity by 2022.
According to data, India, which produces 71% of its electricity from coal, seeks to add 120,000 MWs of power by 2017 to reduce blackouts threatening development in the world's second fastest growing major economy. Indian companies have announced about USD 7 billion of overseas energy acquisitions since January 2010 as they seek coal, uranium and other fuels.
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