India’s coal-dominated power market is tilting toward solar

India’s largest power generator, NTPC Ltd., has long been a major player in coal-fired electricity. It’s right there in the name: Until 2005, it was known by its longform moniker, National Thermal Power Company.

But it has lately stepped into the renewables business, as have many other major power and industrial players in India, with a commitment last year to build 32 gigawatts of renewable energy by 2032. This week, it doubled up that commitment, raising its target to 60 gigawatts.

NTPC hasn’t said what its future renewable asset mix will be, but most of India’s renewables expansion will come from solar. Were it to be entirely solar, 60 gigawatts of total capacity by 2032 would be approximately a fifth of India’s expected solar installations to that date. That’s not far off NTPC’s current power market share of 17%, more than 90% of which is fossil fuel-fired.

Any additional renewable power is good for India’s carbon intensity, but NTPC’s move also raises questions about the future of the nation’s coal fleet, which just might peak in the next decade. At the moment, solar is a pale shadow to India’s King Coal, which has about six times the installed capacity. However government projections and BloombergNEF analysis suggest that solar will overtake coal by the end of 2030. Solar capacity will expand 700% in the next 10 years; coal will expand, too, but only by 30%.

But this capacity figure doesn’t tell the real story of India’s coal fleet right now. It may be big, but its performance is uneven, and its utilization rate is falling. India’s fossil fuel-based power generation (which is almost entirely coal) declined in 2019, and again in 2020.