As evidenced by the fall of the rupee and the widening account deficit, India’s dependence on oil has left it bruised by global forces. In previous oil crises, India had no choice but to tighten budgets. But things are different now; advancing technologies offer a permanent solution to this and another dire problem: pollution. The country needs to take an aggressive approach to replacing fossil fuels with energy from the sun and wind.
What blocked humanity’s ability to tap the sun until recently was the cost of capturing its energy and converting it into electricity. Now, a few things have changed. We have become much better at making semiconductors for computers; and those same silicon technologies are what convert solar energy into electricity. We have developed ways to make solar panels from thinner slivers of silicon. We have gotten much better also at figuring out how to squeeze more out of the solar energy we capture. And, most importantly, economies of scale are beginning to affect the price.
For these reasons, solar-energy capture is advancing on an exponential curve. With that advance, we are heading into an era of practically unlimited, clean, almost free energy—and this could be India’s savior.
The first solar photovoltaic panel built by Bell Labs in 1954 cost $1,000 per watt of power it produced. In 2008, modules used in solar arrays cost $3.49 per watt; by 2018, the price per watt had fallen to less than 40 cents. The amount of solar-generated power has been doubling every two years or less for the past 40 years — as costs have been falling. At this rate, solar power is only five doublings, or less than 12 years, away from being able to meet 100 percent of today’s energy needs.
It isn’t just solar production that is advancing at a rapid rate, and this will not be our only source of clean energy; there are also technologies with which to harness wind, biomass, thermal, tidal, and waste-breakdown energy, and research projects all over the world are working on improving their efficiency and effectiveness. Wind power’s price became competitive with the cost of energy from new coal-burning power plants in 2016, and prices have continued to fall since. Wind-power contracts were recently signed at 2 cents/kwh in Mexico and Brazil and Rs 2.43 in Gujarat.
According to Bloomberg’s New Energy Outlook 2018, India’s levelled cost of electricity, which takes into account the net present value of the unit-cost of electricity over the lifetime of a generating asset, for onshore wind is now 3.9 cents per kWh, down by 46 percent from its price of a year ago, and the cost of solar is 4.1 cents, down by 45 percednt. By comparison, coal costs 6.8 cents per kWh, and combined-cycle gas, 9.3 cents.
To be completely free from fossil fuels and a dependence on the grid, energy storage is needed. The cost of this too is plummeting. In 2008, the cost of industrial batteries was $1,000 per kWh of energy stored; by 2015, it had fallen to $268/kWh. In 2016, Tesla said that the cost of battery production at its Gigafactory was less than $190 kWh. This June, Elon Musk said this could fall to $100/kWh by year’s end. Even if this benchmark takes a year or two longer, what is clear is that there are revolutions in the making — revolutions that India can lead.
Prime Minister Modi laid out ambitious plans to build 175 GW of renewable power generation by 2022, with the addition of 100 GW of solar, 60 GW of wind, 10 GW of biomass, and 5 GW of small hydro. But, with the tariffs that have been imposed on solar cells, GST, and a lack of incentives, this goal is not likely to be achieved.
India should instead be cutting all red tape and taxes, offering subsidies, and doing whatever else it takes to transform the majority of its energy generation to solar and wind — by 2025 or sooner. Unlike fossil fuel subsidies, which only burn money, these investments will provide huge pay-offs in the short term.
Next, India should be first country in the world to rid its roads of fossil-fuel-consuming vehicles; this too is possible. The same batteries that store energy for the grid also power electric vehicles. With their falling costs, electric cars will soon be available at prices a fraction of their climate destroying predecessors’. The government should mandate that, by 2023, the sale of all fossil vehicles be banned and that by 2027, they will not be allowed on the roads.
Yes, there are very few electric vehicles on the market today; they are still costly; and the charging infrastructure isn’t there. But there is nothing to stop India’s entrepreneurs from fixing all of these problems, given the motive and support. The economic boom that would result, and the innovations India would create, could benefit the world.
Vivek Wadhwa is a Distinguished Fellow at Harvard Law School and Carnegie Mellon University. This article is partly derived from his book “Driver in the Driverless Car.”
This article first appeared in the Hindustan Times and is published with permission from the author.