Coal India, the world’s largest producer of the fossil fuel, is closing 37 mines before March next year as it said they are no longer economically viable due to increasing competition from renewable energy sources.
The state-run company, responsible for about 82% of India’s total coal output, said the closures would save around 8 billion rupees ($124 million), The Telegraph India reported.
The country has also announced it will not build any more coal plants after 2022 and predicts renewables to account for more than half its power by 2027.
Only last month, New Delhi cancelled plans to build nearly 14 gigawatts of coal-fired power stations, which according to Tim Buckley, analyst at the Institute for Energy Economics and Financial Analysis, will have “profound” ramifications for global energy markets.
“India’s solar tariffs have literally been free falling in recent months,” he wrote.
At the same time that solar becomes cheaper, the cost of coal power is rising in India as local mines face mounting costs and tougher environmental regulations, a report by Bloomberg New Energy Finance said earlier this month. Falling demand is also an issue.
India’s solar-generation capacity is expected to touch 8.8 gigawatts (GW) this year to become the third-largest solar market in the world, according to renewable energy consultancy Bridge To India (BTI). At the end of 2016 India had just 7.5 gigawatts.
The nation has set itself some of the world’s most ambitious targets for installing new solar power capacity, with prime minister Narendra Modi aiming for 100 gigawatts of solar power by 2022.
The pace of new solar installations has picked up in recent months as equipment prices have plummeted.
As a result, consulting firm Ernst & Young recently said India has become the world’s second best market for investing in renewable energy, after China.