According to a recent report by HSBC Global Research, wind power has become cost competitive with new coal capacity in India. Solar is not far behind; the report also claims it is likely to become cost competitive between 2016 and 2018.
While policies like the reinstatement of the Generation Based Incentive for wind power projects have made them more financially viable, as HSBC reports, this specific change in the relationship between wind power and coal-based power can be partially attributed to water shortages. In India, thermal power plants account for almost 90 percent of industrial water demand. Coal-fired power plants use significantly more water than renewables like wind and solar, and water shortages have been affecting coal-based power production in India during the past three years, causing some power plants to close partially during the pre-monsoon season.
India already ranked number five for global wind power capacity as of 2011. While improvements to the power grid infrastructure would be necessary to get new wind power generation sources linked to businesses and homes, this change in relative cost likely coincides with, and perhaps will directly cause, an increase of wind power projects in India. As the HSBC report states, “India currently has 1.2GW of installed solar capacity and over 4GW of capacity is at various stages of tariff bidding. We expect commissioning of selected projects within two years.”
via: IEEE Spectrum
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