Gurugram: Provided favourable conditions, India could secure round-the-clock clean electricity at prices comparable to new coal plants by 2030. The revelation has been made in a recent study by the International Institute for Sustainable Development (IISD) and the Centre for Study of Science, Technology and Policy (CSTEP), which comes against the backdrop of mounting pressure on the power system.
The study, ‘Budgeting for Net Zero: Powering India’s Reliable Clean Energy Future’, finds that firm and dispatchable renewable energy (FDRE)—a blend of solar, wind, and battery storage—can match or undercut the cost of new thermal plants when developers monetise surplus electricity generated by oversized capacity. Cost parity arrives by 2025 when 100% surplus power is sold, 2030 when 50% is monetised, and 2047 when only 30% is sold.
“FDRE is not just a clean alternative; they are an increasingly competitive source of reliable power,” said Sunil Mani, policy advisor at IISD. FDRE marks a major shift away from variable renewable additions toward firm, peak-hour clean power, matching distribution companies’ load patterns that currently force them to purchase high-cost spot-market power.
With 9.7 GW of FDRE already under construction, the report notes that recent bid outcomes closely track the cost projections outlined. Early FDRE tenders had struggled with uncertainties around the renewable–storage mix and how developers could monetise surplus power. Still, maturing tender design has now reduced that hesitation in the market. The findings also align with the Centre’s ongoing push for round-the-clock renewable tenders, its ₹3,760-crore viability gap funding scheme for battery storage, and national resource-adequacy reforms. It signals that policy is moving decisively toward the model the report advocates. FDRE projects can be commissioned in 2–2.5 years, compared to 5–7 years for new coal plants, while delivering broader economic benefits—1.8% GDP growth by 2050, 64,000 net new jobs, lower fuel-import exposure and reduced pressure on public-health systems. CSTEP’s senior associate Dr Anasuya Gangopadhyay, added that FDRE is best deployed as part of a balanced portfolio that meets peak-hour needs without burdening consumers or discoms.
The urgency of this transition is underscored by escalating climate-driven demand. A recent analysis, by Climate Trends and Climate Compatible Futures, found that heatwaves in 2024 alone drove a 9% surge in electricity demand, pushing peak load to 246 GW, up sharply from 154 GW in 2015. To meet this spike, India ramped up coal-based generation, producing roughly 327 million tonnes of CO₂ in summer 2024 and an estimated 2.5 gigatonnes over the decade’s heat-driven peaks. The study warned of a worsening “heat–power trap,” in which rising temperatures increase cooling demand, forcing greater fossil fuel use that in turn exacerbates warming and public health risks. The report also flags a critical governance blind spot in India’s Heat Action Plans (HAPs) that are largely unprepared for electricity shocks. Only four states, three cities and one district currently incorporate renewable or battery-backed power systems into their HAPs. Most plans focus narrowly on health responses and early warnings, with little forecasting of rising electricity demand, grid stress or backup power needs. Some states do not mention electricity at all. “The findings show India’s heatwaves and power shortages can no longer be treated as separate crises. They are converging,” noted Aarti Khosla, director of Climate Trends. “Unless we upgrade the grid, build storage and develop flexible electricity systems, every summer will lock us deeper into fossil dependence, undermining climate progress and worsening public health impacts.”
This loop also carries severe health consequences, heatwaves strain emergency services, worsen cardiovascular stress and intensify mortality risks, while coal-fired generation deepens pollution that drives respiratory diseases. The IISD–CSTEP report notes that when pollution and climate damages are factored in, the effective cost of pithead coal rises from ₹4.65/kWh to ₹13.19/kWh, making FDRE immediately cheaper in all scenarios.
Given the rising evening cooling load, the report argues that solar alone cannot meet India’s new demand profile. FDRE’s ability to deliver reliable, low-carbon power during night-time and peak hours makes it central to stabilising the grid without further worsening heat and pollution. With discoms heavily exposed to volatile peak-hour procurement, FDRE’s contracted firmness could significantly reduce their dependence on high-priced short-term markets. Analysts also caution that meeting future summer peaks with new coal could lock India into expensive, long-lived assets that risk becoming stranded as renewable-storage systems continue to fall in cost.
While FDRE will not replace lower-cost standalone solar and wind, the authors emphasise that it is a targeted tool, deployed where reliability and firmness are essential and complemented by lower-cost clean energy elsewhere. They underline that FDRE is not intended to replace India’s wider renewable and storage build-out, but to serve specific pockets of demand where firm delivery justifies higher contracting costs.
