Once upon a time, the US was the sole clean energy superpower. Until 2011, it led the world in connecting wind and solar generators to the grid. Then China took over, to a point where its lead appears unassailable: The People’s Republic added eight times more renewables than the US last year. This year, India is likely to overtake the US, too.
The country connected 22 gigawatts (GW) of wind and solar in the first half — a dramatic recovery from a troubling slowdown in 2022 and 2023, and enough at full output to power nearly one-tenth of the grid. (As a share of annual generation, it would be much lower, but the highest level of demand recorded to date was 250GW in May last year.)
Assuming that is maintained through December, it should put India ahead of the 40GW that the US government expects this year.
Illustration: Mountain People
It is also setting the world’s most populous nation on course to hit a target of Indian Prime Minister Narendra Modi’s that once seemed implausible: to reach 500GW of nonfossil generation by 2030. Such a shift would herald the dawn of a new clean energy superpower, and give the world some of its best hopes of averting disastrous climate change.
It is a remarkable turnaround for a country with a renewable industry that looked like a lost cause barely more than a year ago. What happened?
One factor is financing. Easing inflation has allowed the Reserve Bank of India to cut its policy rate by a percentage point since December to the lowest in three years. That reduces the price of renewables, which are particularly exposed to debt costs.
Regulatory deadlines have also played a role: A waiver on transmission charges for wind and solar expired at the end of last month, causing developers to rush to complete their builds in time to get the financial benefit.
The end of that waiver might cause a wobble for the sector over the next year or so, but the changes would be introduced slowly. Over the balance of the decade there is good reason to think the recent pace can be sustained. The rash of projects breaking ground this past year means about 414GW of clean power is already either operating or under construction, including nuclear and hydroelectric plants. That is not far off the 500GW target, and there are still more than five years to go.
Industrialists are counting on it. Solar panel manufacturing has been ramping up to the point where it runs far in excess of domestic demand, at 91GW. With lower tariffs into the US than their rivals in China and Southeast Asia, that excess of supply might make local panel makers rare beneficiaries of US President Donald Trump’s war on clean energy. That certainly seems to be the assumption of a group of US competitors, who last week sought anti-dumping measures to keep Indian products out of their market.
For many years, India had a skeptical take on the energy transition, arguing since the 1970s that poverty was a more pressing problem than protecting the environment. The difference now is that zero-carbon power is decisively cheaper than the competition.
Meanwhile, rising incomes mean the government needs to also think about the needs of about half a billion middle-class citizens, who worry more about where to find a good job in a clean, livable city than the basics of subsistence living.
India is still building coal-fired power plants to make sure those newly minted urbanites do not suffer power cuts in the middle of punishing heat waves, but they are not necessarily being used. Thanks to milder weather than in the past few years and the rising volumes of renewables pushing it off the grid, fossil-fired power generation fell 4 percent in the first half relative to last year.
That is the first time it has dropped since the COVID-19 pandemic hit in 2020, and occurred even as electricity generation rose 0.8 percent. Retirements of old plants mean that fossil-generation capacity has actually declined slightly so far this year.
It is still possible that emissions from India’s power sector would not peak until well into the 2030s. Even so, the faster rollout of renewables, combined with declining pollution from China and the rich world, means the global picture is improving faster than you would realize if you were focused only on the steampunk posturing in Washington.
Renewable power is not just cleaner — it is cheaper, and more suited to the aspirations of the billions in the global south who want a better, healthier life.
Rich nations such as the US can afford the indulgence of a campaign against modern energy, at least until their citizens realize how badly they are being shortchanged. It is a fatal myopia, though. For all Trump likes to boast of energy dominance, the US is falling behind on the most important energy technologies of the 21st century.
David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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