India’s new solar auction lights the way to Modi’s Green targets
Record low Indian solar tariffs tendered at a groundbreaking auction may catalyze green investments and help tip the balance of new power to renewables and away from fossil fuels.
Solar power in India fell to a record 3.30 rupees (5 U.S. cents) a kilowatt-hour on Feb. 10 after a World Bank-backed auction helped the central Madhya Pradesh state tender 750 megawatts of power. The auction format, which included payment guarantees and was run by the state and central governments, could become a template fueling growth in other regions and bringing energy security to the world’s second-most-populous country.
“The outcome for this tender has shown that the holy grail of grid parity has been discovered,” said Basant Jain, the director at Mahindra Renewables Pvt., which won the right to build 250 megawatts of capacity in last week’s auction. If the auction can be replicated, it would unleash exponential growth in Indian solar and make it the cheapest source of energy available, he said.
India is among a growing list of countries stretching from Asia to Europe that have used auctions to make clean energy more affordable. The result should help Prime Minister Narendra Modi’s government meet pledges to install 175 gigawatts of renewable capacity by 2022 and spur discussion about whether solar can replace coal as India’s dominant source of energy.