Use of fossil fuels for power at turning point as renewables surge: Report

The data also indicates that renewable power generation increased at a faster rate than the overall growth in power output for the first time.

The use of fossil fuels such as coal and oil for generating electricity fell in 2019 in the United States, the European Union and India, at the same time overall power output rose, a turning point for the global energy mix.

Those countries and regions are three of the top four largest producers of power from fossil fuels. The declines suggest the end of the fossil fuel era could be on the horizon, said Tomas Kaberger, an energy professor at Chalmers University of Technology in Sweden, who provided the power generation data to Reuters.

Kaberger, who is also the chair of the executive board for Japan's Renewable Energy Institute and a member of the board at Swedish utility Vattenfall AB, provided data covering more than 70% of the world's power generation that showed for most of 2019 the amount of power sourced from fossil fuels dropped by 156 terawatt hours (TWh) from the year before. That is equal to the entire power output of Argentina in 2018.

The data also indicates that renewable power generation increased at a faster rate than the overall growth in power output for the first time, rising by 297 TWh versus 233 TWh for overall output, Kaberger said.

"It is economics driving this as low-cost renewable electricity outcompetes against fossil and nuclear power plants," said Kaberger.

With electric vehicle usage surging and their batteries being increasingly recharged by renewable electricity supplies the decline of fossil fuels is likely to accelerate, he said.

"New renewables are even cheaper than oil per unit of energy electricity generated and even fuels produced from electricity will outcompete against fossil fuels at increasing speed in transport, heating and industry," he said.

"Peak oil demand is close," Kaberger said.

How low prices prevent India from supplying power 24x7 to all homes

The inability or refusal of state governments to increase power bills, as we explain later, has led to more borrowing and power shortages and made DISCOMs reluctant to buy available electricity.

India mined more coal, built more power plants, and distribution companies connected millions of homes to the grid over four years to 2019. But those companies are now saddled with a record debt that hinders a key government promise.

“24x7 power” is the government’s priority, India’s new power minister Raj Kumar Singh said on May 30, 2019. His predecessor, Piyush Goyal, declared India “power surplus” two years ago, and a government dashboard says 99.99 per cent of rural homes--which account for nearly 7 in 10 Indian homes--now have grid power.

At the root of the contradictions between almost-universal electrification, “surplus” electricity and the inability to supply it around-the-clock to Indian homes is a debt that burdens state-owned electricity distribution companies (DISCOMs) nationwide, impairing their ability to build and maintain power grids and equipment.

The inability or refusal of state governments to increase power bills, as we explain later, has led to more borrowing and power shortages and made DISCOMs reluctant to buy available electricity, which means continuing blackouts and erratic power supply.

This debt will reach Rs 2.6 per cent ($37 billion) by 2020, according to a May 2019 study by Crisil, a market research agency. When that happens, the debt will be the same as in 2015, which is when the Ujwal DISCOM Assurance Yojana (UDAY), the government’s bailout programme for DISCOMs, began.

“The much bigger need [other than DISCOM inefficiencies] is to address the large amount of free power that is distributed for irrigation and for rural households in the country,” Vibhav Nuwal, director, REconnect, a Bangalore-based energy solutions company, told IndiaSpend. Only if this electricity is metered and billed will DISCOM losses reduce, he said.

We sought comment from Vishal Kapoor, director, UDAY, at India’s power ministry over email and followed up with phone calls over two weeks, but there was no response. His office declined a request for an appointment. If and when there is a response, we will update this story.

Business Standard