When Big Coal goes solar

Climate Progress

The largest coal company in the world, Coal India, is aiming to cut its own utility bills by installing solar photovoltaic panels at its facilities across the country. The coal giant is seeking proposals from solar energy companies to build a modular two megawatt solar plant on nine acres of its own land. This plant could be scaled to export power to the grid.

Not only is Coal India pursuing commercial solar power plants, it’s also “mulling” the installation of rooftop solar panels at the Ranchi Central Mine Planning and Design Institute, where it does mining research. The panels would go on “staff colonies” and in mining areas, with the goal of reducing the company’s energy bills.

Coal India explained the reason for these moves in its bid document:

“India has an abundance of sunshine and the trend of depletion of fossil fuels is compelling energy planners to examine the feasibility of using renewable sources of energy like solar, wind, and so on.”

This is a remarkable statement from the largest coal company in the world. Coal India produces 90 per cent of India’s coal, and not only is it turning to solar as an efficient business practice, it understands India cannot power itself by coal. In fact, a coal-based electricity system is not reliable: solar energy is. And solar may be the only hope for much of rural India to become electrified after decades of failed grid expansion plans.

With so much potential solar capacity across the country (see below for how much potential solar energy hits India every year), there is little wonder that even fossil fuel companies are looking to get in on the game.

Click to enlarge

Click to enlarge

A Pike Research report last year predicted that the global mining industry would invest $20 billion in renewable energy by 2020. Coal India may be among the first coal companies to commit to solar in the way it seems to be, though in 2012 a British coal mining museum in south Wales recently outfitted two rooftops with 400 solar panels. Neyvili Corp produces coal in India and is building a 10 megawatt solar power plant that could be upgraded to 25 megawatts, along with a 50 megawatt wind farm. Oil India has also started investments in wind and solar.

These companies see something that oil giant BP did not: After decades of investment in solar energy, CEO Bob Dudley said “We have thrown in the towel on solar.” Most coal and other fossil fuel companies around the world have not embraced renewable energy in the way that these Indian companies have. Why?

57 per cent of India’s electric power capacity comes from coal. Though it has substantial reserves (fifth-largest reserves in the world), India is burning a great deal of coal from foreign countries. Coal imports hit a record high – 135 million tonnes in the last fiscal year – a five-fold increase over the last ten years. The majority of coal imports come from Indonesia, with Australia and South Africa comprising much of the rest.

This is bad for Indians. Coal pollution causes the deaths of more than a hundred thousand Indians every year through respiratory problems. Coal emissions also help cause climate change, the consequences of which – such as heat waves – kill hundreds and lead to electric grid chaos as demand spikes.

India has had a coal tax in place for several years, and the resulting funds are, in part, going to aid solar development. But while the country does have clean energy targets, it does not enforce them on state electricity distributors and large power companies, and therefore bids for solar power credits plummeted by nearly half last month.

Even so, solar energy is cheap and thriving in India. According to the government, solar power could be cheaper than coal by next year. All of this potential is bringing foreign investment to India. US solar manufacturer First Solar is looking to increase its exports in the next three years enough to raise its market share from 20 per cent to 25 per cent.

Chinese and European solar firms are the main competition with US and domestic Indian solar companies. The US is fighting to keep that market share open in the face of possible rules that require solar energy firms to buy inputs from domestic manufacturers.

The cost of coal in public health and climate impact terms has been obvious for some time, but many put up with this because there were few cheaper options, especially in countries with small natural gas industries. However, the cost of solar power has been dropping like a stone. In New Mexico, First Solar is building what will be the largest solar power plant in the state which will sell electricity cheaper than the cost of electricity from a new coal plant.

This article was originally published by Climate Progress. Republished with permission.