Rajasthan Can Save ₹57,000 Crore By Replacing New Coal Plants With Solar And Battery Storage—Report

A new report published by Climate Risk Horizons has highlighted that Rajasthan can achieve major financial savings and meet its rising electricity demand more efficiently by avoiding new coal power projects and focusing instead on solar energy combined with battery storage systems. The report states that replacing a proposed 3,200 MW coal power project with a clean energy system based on solar and battery storage could help the state save nearly INR 57,000 crore over the next ten years.

Rajasthan has already emerged as one of India’s leading renewable energy states and currently contributes more than 27% of the country’s total installed solar capacity. Despite this strong growth, the state continues to face serious challenges in grid management and power distribution. According to the report, Rajasthan experiences a very high renewable energy curtailment rate, reaching up to 51.5% during certain periods. As a result, nearly 4 GW of renewable power capacity remains unused during peak daytime generation hours.

This situation has created significant losses for renewable energy developers, estimated at around INR 250 crore. At the same time, consumers are unable to fully benefit from cheaper solar electricity because the power generated is often wasted due to limited storage and grid flexibility. Currently, renewable sources meet less than 24% of Rajasthan’s overall electricity demand, forcing the state to continue depending heavily on fossil fuel-based generation.

To address future power demand, authorities are reportedly considering the addition of 2,535 MW of new coal-based power capacity. However, the report strongly argues against this plan, warning that coal power is becoming increasingly expensive and inefficient. Between 2020 and 2025, fuel costs for operating coal plants in Rajasthan increased by nearly 31%. The report attributes this rise mainly to transportation expenses, as Rajasthan is located far from major coal mining regions.

In addition, the cost of constructing new coal plants has increased by more than 36% because of higher raw material prices and stricter environmental compliance requirements. According to projections in the report, electricity generated from a new thermal power plant commissioned by 2031 could cost around INR 10.27 per kWh, making it significantly more expensive than renewable alternatives.

As a solution, the study proposes a large-scale clean energy system combining 7.1 GW of solar capacity with a 2.1 GW Battery Energy Storage System (BESS) capable of storing power for eight hours. This system would allow excess daytime solar energy to be stored and supplied continuously for up to 18 hours. The estimated cost of electricity from this solar-plus-storage model ranges between INR 5.48 and INR 5.87 per kWh, which is nearly half the projected cost of new coal power.

The lower electricity tariff could generate annual savings of approximately INR 5,500 crore from the first year itself. Although the clean energy system would require higher upfront investment compared to a thermal plant, the report says the operational savings would help recover the additional cost very quickly. With support from the Government of India’s Viability Gap Funding scheme, the extra investment could reportedly be recovered within 18 months.

The report further noted that Rajasthan can manage remaining nighttime electricity demand by better utilizing its existing thermal power fleet instead of investing in new coal infrastructure. It concluded that expanding battery storage and renewable energy would help protect consumers from higher electricity tariffs while strengthening Rajasthan’s position as a leader in India’s clean energy transition.