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India is APACs cheapest power producer

Bakhtar News Agency

India has emerged the least costly electricity producer from coal, solar and wind sources in the Asia Pacific region. It is the only country in the region where cost of producing solar power is almost 14% less than cost of electricity generated from coal. However, in terms of tariffs paid by consumers, India is fourth cheapest after Malaysia, Vietnam and China.

Cost of power generation is highest in Japan so is its tariff for consumers among all Asia Pacific countries.

According to data compiled by global consultant Wood Mackenzie, levelised cost of electricity generation from fossil fuel at around $44.5 per MWh (Rs 3.05 per unit) in India, is the cheapest in the region. It is followed by China at $48.5 per MWh (Rs 3.33 per unit) and Australia at $50.9 per MWh (Rs 3.49 per unit) among other 12 countries in the region.

Levelised cost of solar power generation in India according to the study, estimated at around $38.2 MWh (Rs 2.62 per unit), is also the lowest. It is followed by Australia at $52.7 per MWh (Rs 3.62 per unit) and China at $61.2 per MWh (Rs 4.2 per unit).

Indias levelised cost of onshore wind power generation, estimated at $48.9 per MWh (Rs 3.36 per unit) is cheapest in the region. It is followed by Australia at $74.6 per MWh which translates to Rs 5.12 per unit.

Wood Mackenzie research director Alex Whitworth said: High-quality solar resources, market scale and competition have pushed solar costs down to half the level seen in many other Asia Pacific countries.

Kameswara Rao leader-energy, coal and mining at PWC India said: Lower cost of renewable energy relative to others, is a result of India's unique model of large scale park-based development tendered via competitive auctions, which helped transfer much of the efficiency gains from the IPPs to the procuring utilities.

He, however, did not see these benefits translating into lower consumer tariffs yet, since utilities have to maintain facilities to ensure continuity of supply for periods when renewable energy is unavailable or is variable. A nationally managed investment in flexible generation and in large-scale storage is needed to reach the gains to consumers in lower tariffs, he said.

At present average tariff paid by consumers India is the fourth cheapest at Rs 5.83 per unit. Malaysia is the cheapest at Rs 4.09 per unit, followed by Vietnam (Rs 5.14 per unit) China (Rs 5.46 per unit) and India. Consumers in Japan pay the highest at an average Rs 19.35 for every unit of power they buy.

While solar costs are falling across the region, the average LCOE for wind and solar in Asia Pacific are still 29% higher than coal-fired power. Wood Mackenzie forecasts that this premium will disappear by 2027. By 2030, renewable power will be 17% cheaper than coal fired power across the region. Malaysia, Indonesia and Japan will be the only countries with higher renewable LCOE compared to coal.


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