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

This report by Ember analyzes how the decline in Battery Energy Storage System (BESS) costs can accelerate the phase-down of coal power in India between 2024 and 2032. Using a least-cost optimized (LCO) model, the authors identify that while solar growth is rapid, the transition is limited by the cost-effectiveness of storage for non-solar hours. The report argues that BESS costs must fall by 15% annually to limit new coal capacity to levels projected in the 14th National Electricity Plan (NEP), and must drop by over 50% from current levels to potentially eliminate the need for any new coal additions.

• India's coal phase-down is conceptualized in three stages: first, a slowing 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 outcompetes the marginal cost of existing coal.
• In a least-cost optimized (LCO) pathway, renewable energy could meet 83% of daytime electricity demand by 2032, but only 38% during non-solar hours. This disparity exists because storage growth becomes a limiting factor once solar's share of the power mix exceeds 25%.
• If BESS project costs decline at the historical average rate of 7% annually, coal generation is expected to plateau near 2023 levels (approximately 1,265 TWh) through 2032. However, this scenario still requires adding coal capacity, potentially reaching 286 GW by 2032.
• To limit new coal capacity additions to the levels projected in the 14th National Electricity Plan (approximately 260 GW), BESS costs must decline by an average of 15% annually until 2032.
• No new coal additions may be required if BESS costs (excluding financing) drop to approximately Rs 6 million/MWh, which represents a decline of more than 50% from the current cost of approximately Rs 13 million/MWh.
• The transition to a low-carbon power sector requires significant investment; the LCO base case estimates a need for 377 billion USD for generation and storage capacity alone, with solar and wind projects requiring 240 billion USD (63% of the total).
• To avoid new coal capacity, existing coal plants must be retrofitted for flexible operation (two-shift mode), which is estimated to cost between 5% and 10% of the total costs of baseload plants.

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} }