RE "versus" coal in India – A false framing as both have a role to play

Abstract

A number of publications proclaim Renewable Energy (RE) is cheaper than coal. A newspaper will often show two cost curves, a rising one for coal, and a falling one for RE, especially solar (Figure 1). At some point they cross-over, an intersection dubbed “grid parity”. It’s a separate question whether this has already occurred, or is imminent. This framing falls short of capturing crucial aspects at play — it is unlikely there is a simple crossover after which coal goes away. The reality is one that needs to factor in time of day, location, and share of RE, even before considering additional issues of contracting, technical constraints such as ramping capabilities, and frameworks for who will pay for the transition. A simple claim that RE is already cheaper masks system-level costs as well as disproportional impact on selected states, generators, and stakeholders. This paper presents an alternative comparison model for RE and coal, and suggests a portfolio approach, with both playing a role in the near future, will lead to superior planning.