Sustained Cost Declines in Solar PV and Battery Storage Needed to Eliminate Coal Generation in India

Rahul Tongia

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Abstract

Unabated coal power in India must be phased out by mid-century to achieve global climate targets under the Paris Agreement. Here we estimate the costs of hybrid power plants—lithium-ion battery storage with wind and solar PV—to replace coal generation. We design least cost mixes of these technologies to supply stylized baseload and load-following generation profiles in three Indian states—Karnataka, Gujarat, and Tamil Nadu. Our analysis shows that availability of low cost capital, solar PV capital costs of at least $250 kW−1, and battery storage capacity costs at least 50% cheaper than current levels will be required to phase out existing coal power plants. Phaseout by 2040 requires a 6% annual decline in the levelized cost of hybrid systems over the next two decades. We find that replacing coal generation with hybrid systems 99% of the hours over multiple decades is roughly 40% cheaper than 100% replacement, indicating a key role for other low cost grid flexibility mechanisms to help hasten coal phaseout. Solar PV is more suited to pairing with short duration storage than wind power. Overall, our results describe the challenging technological and policy advances needed to achieve the temperature goals of the Paris Agreement.