Drivers to Coal Phase-Down in India: Part 1 - Battery Cost Declines

The report analyzes the relationship between battery cost declines and the feasibility of phasing down coal in India. It identifies three stages of coal phase-down: slowing growth, plateauing, and absolute decline. Using a least-cost optimized (LCO) model, it finds that while solar can meet up to 83% of daytime demand by 2032, storage is the primary bottleneck for non-solar hours. To limit coal capacity additions to the National Electricity Plan (NEP) levels of 260 GW, BESS costs must decline by 15% annually. If costs fall by 7% annually, coal generation may plateau, but new capacity will still be needed. The report emphasizes that BESS costs must drop to approximately Rs 6 million/MWh (a >50% reduction from current levels) to potentially eliminate the need for new coal additions.

• India's coal phase-down is conceptualized in three stages: first, a slowing of growth in coal generation as renewable energy (RE) is integrated; second, a plateau where RE plus storage is cheaper than new coal; and third, an absolute decline where RE plus storage is cheaper than the marginal cost of existing coal.
• In a least-cost optimized (LCO) pathway, solar capacity could grow to 375 GW by 2032, allowing RE to meet 83% of daytime electricity demand, but only 38% of demand during non-solar hours.
• If BESS project costs decline at an average annual rate of 7%, coal generation is projected to plateau near 2023 levels (approximately 1,265 TWh) through 2032, provided India adds roughly 43 GW of solar and wind annually.
• To limit coal capacity additions to the 14th National Electricity Plan (NEP) projection of 260 GW, BESS costs must decline by an average of 15% annually.
• New coal capacity additions may be entirely avoided if BESS costs (excluding financing) drop to approximately Rs 6 million/MWh, representing a decline of more than 50% from current levels of roughly Rs 13 million/MWh.
• The transition to renewables will likely lead to a decline in the utilization of the existing coal fleet, with the plant load factor (PLF) projected to drop from 68% in 2023 to 50% by 2032 under the LCO pathway.

APA

Rodrigues, N., & Khan, N. (2024). Drivers to Coal Phase-Down in India: Part 1 - Battery Cost Declines. Ember. https://ember-energy.org/app/uploads/2024/06/Report-Drivers-to-coal-phase-down-in-India-2.pdf

Chicago

Rodrigues, Neshwin, and Nayeem Khan. Drivers to Coal Phase-Down in India: Part 1 - Battery Cost Declines. Ember, 2024. https://ember-energy.org/app/uploads/2024/06/Report-Drivers-to-coal-phase-down-in-India-2.pdf.

Wikipedia

{{cite report |last1=Rodrigues |first1=Neshwin |last2=Khan |first2=Nayeem |title=Drivers to Coal Phase-Down in India: Part 1 - Battery Cost Declines |publisher=Ember |date=20 August 2024 |url=https://ember-energy.org/app/uploads/2024/06/Report-Drivers-to-coal-phase-down-in-India-2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rodrigues2024drivers, author = {Rodrigues, Neshwin and Khan, Nayeem}, title = {{Drivers to Coal Phase-Down in India: Part 1 - Battery Cost Declines}}, institution = {Ember}, year = {2024}, month = aug, url = {https://ember-energy.org/app/uploads/2024/06/Report-Drivers-to-coal-phase-down-in-India-2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }