Least-cost targets and avoided fossil fuel capacity in India's pursuit of renewable energy

India has set aggressive targets to install more than 400 GW of wind and solar electricity generation by 2030, with more than two-thirds of that capacity coming from solar. This paper examines the electricity and carbon mitigation costs to reliably operate India's grid in 2030 for a variety of wind and solar targets (200 GW to 600 GW) and the most promising options for reducing these costs. We find that systems where solar photovoltaic comprises only 25 to 50% of the total renewable target have the lowest carbon mitigation costs in most scenarios. This result invites a reexamination of India's proposed solar-majority targets. We also find that, compared to other regions and contrary to prevailing assumptions, meeting high renewable targets will avoid building very few new fossil fuel (coal and natural gas) power plants because of India's specific weather patterns and need to meet peak electricity demand. However, building 600 GW of renewable capacity, with the majority being wind plants, reduces how often fossil fuel power plants run, and this amount of capacity can hold India's 2030 emissions below 2018 levels for less than the social cost of carbon. With likely wind and solar cost declines and increases in coal energy costs, balanced or wind-majority high renewable energy systems (600 GW or approximate to 45% share by energy) could result in electricity costs similar to a fossil fuel-dominated system. As an alternative strategy for meeting peak electricity demand, battery storage can avert the need for new fossil fuel capacity but is cost effective only at low capital costs (approximate to USD 150 per kWh).

Automated summary

India aims to install over 400 GW of wind and solar electricity generation by 2030, with solar comprising the majority. Research suggests that systems where solar photovoltaic makes up only 25 to 50% of the total renewable target have the lowest carbon mitigation costs, and high renewable energy targets can reduce the need for new fossil fuel power plants. Additionally, a wind-majority high renewable energy system could potentially keep India's 2030 emissions below 2018 levels and below the social cost of carbon.