There was perhaps much rending of garments, wailing and gnashing of teeth in Australia’s coal industry when Narendra Modi’s Bharatiya Janata Party was recently swept to power.
According to Bloomberg, the new government believes solar energy has the “potential to completely transform the way we look at the energy space” and clean-power generation will be the administration’s top energy-related priority.
Justin Guay, associate director of the International Climate Program at the Sierra Club, says Modi is a “huge champion for solar”. Modi pioneered India’s first incentives for large-scale solar power in 2009 while chief minister of Gujarat state.
His efforts in regard to power generation were so effective that Gujarat achieved an energy surplus – no mean feat in a country where blackouts are so common.
Modi is said to have plans to use solar power to enable every home to run at least one light bulb by 2019. That’s quite a goal given four hundred million people in India live in homes without electricity. Currently India sources around 40% of its electricity from coal fired generation.
So why would all this talk of a solar powered India be of concern to the Australian coal industry? In a word – Galilee.
Australia’s massive Galilee Basin coal mining project will be relying on new export markets such as India.
Even without the pro-solar Bharatiya Janata Party in power; the economics of Galilee coal for India were already questionable and major coal mining projects in Australia were labelled a major financial risk.
The Institute for Energy Economics and Financial Analysis (IEEFA) recently stated coal exported to India from the Galilee Basin would require a wholesale electricity price double India’s current level to be viable.
While Modi’s rise to power doesn’t come without concerns, one thing looks assured – that India’s solar sector looks set for sunny days ahead.
