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India’s coal-power plant developers are growing more pessimistic about their projects after a plunge in the cost of electricity from solar panels improved the economics of renewable energy.

After a string of federal auctions, solar is suddenly the cheapest source of electricity in India. That’s darkening the outlook for the coal-fired power industry as projects struggle to find customers or face cancellation amid a glut of capacity.

“The crashing solar tariffs are creating a mental block for distribution companies and holding them back from signing long-term purchase agreements with conventional power producers,” said T. Adi Babu, chief operating officer for finance at Lanco Infratech Ltd., an Indian power producer. “A couple of years back, when people talked of solar reaching grid parity, people were skeptical. Now the solar tariffs have gone well below that. It is definitely making conventional players sit up and take notice.”……

evidence of a shift away from coal is gathering by the day.

• State-run NTPC Ltd., India’s largest power producer, along with RattanIndia Power Ltd. are considering installing solar panels over land initially intended for thermal projects.
• NTPC said in February it’s aiming to have 30 percent of its capacity come from non-fossil fuel by 2032
• The Indian subsidiary of Hong Kong-listed CLP Holdings Ltd., which owns both coal and renewable projects, is debating whether to participate in another round of conventional projects. “A transition from coal to solar is a generic direction that all utilities are taking. We are an early mover into the renewables space so our journey continues,” Mahesh Makhija, business-development director for renewables, said in a phone interview.
• The government of the sunny state of Rajasthan expects more conventional power to be replaced by clean energy as higher renewable purchase targets are fulfilled. “At the rate the renewable power tariffs are decreasing, the time is not far when renewable power will start replacing costlier conventional power,” Sanjay Malhotra, principal secretary for energy in the Rajasthan government, said by phone.

Solar is now as much as 50 percent cheaper than new coal power, according to solar research firm Bridge to India.

“That’s why we have seen many new coal power tenders being suspended or canceled in the last three months,” said Vinay Rustagi, managing director at Bridge to India…….

renewables are expanding quickly in India. Solar capacity has surged fourfold since December 2014 to about 12 gigawatts, while wind farms now provide 32 gigawatts, up from 22.5 gigawatts over the same period. Modi is seeking an additional 88 gigawatts of solar and 28 gigawatts more of wind by 2022. And those projects are crowding coal out of the power market…….https://www.bloomberg.com/news/articles/2017-06-01/cheaper-solar-in-india-prompts-rethink-for-more-coal-projects