WEC India aims to be the foremost energy think-tank of the country and the voice of the sector. The organisation is truly representative of the Indian energy sector and contributes to advancing the energy goals of India. Its mission is to facilitate review, research and advocacy of energy technology, policy and strategy; to provide a platform for dialogue within the Indian energy sector; and to collaborate with member committees worldwide towards long term sustainable supply and use of energy. WEC India brings together high-level players in the energy sector together to forge a better understanding of energy issues towards identifying and implementing sustainable, effective solutions.
Mr Gurdeep Singh, is Chairman & Managing Director of NTPC Limited, the largest power generating company in India. Mr Singh has nearly three decades of rich and varied experience in the sector. He started his professional journey with NTPC and his career spans both Indian and Multi-national Companies such as PowerGen, CLP, IDFC, CESC and AES, Gujarat State Electricity Corporation Limited (GSECL). During his tenure as Managing Director, GSECL, he conceptualized and implemented world's first canal top solar power plant. A mechanical engineer from National Institute of Technology, Kurukshetra, India, he has obtained leadership training from IIM Ahmedabad and global institutions like Saïd Business School-Oxford, Darden School of Management-Virginia, USA, Singapore Civil Services College-Singapore.
Energy in India
As one of the fast-growing economies and global demand centre, India places the achievement of sustainable growth as the main priority. Energy for growth needs to increasingly come from renewable sources while recognising the important role of coal in the Energy Transition. Renewable capacity growth needs to be accelerated by systematically addressing implementation hurdles. Energy Efficiency in the entire value chain is highly actionable and the country has success stories such as LED implementation. Success in turning around the electricity distribution segment will be crucial for the long-term achievements of the electricity sector, given that distribution is the weakest link in the electricity value chain.
Being hugely dependent on oil and gas imports, India gets adversely affected by upward price trends of commodities and sanctions imposed on exporting countries, such as the current US sanctions on Iran. Although endowed with abundant sunshine, the solar segment currently faces import dependence of solar panels. Capacity expansion in solar is strategic to achieving the desired energy mix and generating green jobs. However, current domestic manufacturing capacity of solar panels is limited. Import duties seem to have introduced uncertainties and act as a short-term dampener to capacity additions of solar. Balance must be met between creating robust domestic manufacture and reaching the required pace of capacity addition.
The ambitious renewables1 (175 GW by 2022 and 275 GW by 2026-27) and electric vehicle targets2 of India are significant in shaping the global market for batteries, driving down price and bring about market transformation. Policy visibility, demonstration projects, second life market, R&D and domestic manufacturing base must emerge. Charging infrastructure is pre-requisite for demand creation for EVs. Given the urbanisation pace and air quality concerns in cities, Electric Vehicle answers India’s quest for Sustainable Mobility. While the answer is clear, getting there begins with the creation of adequate charging infrastructure.
The national elections are scheduled for 20193 and continuity of policy directions is expected.
Trade barriers: India is a major purchaser of Iranian crude oil and is also a major investor in Russian gas fields. US restrictions have forced India to decrease oil purchases from Iran and diversify its oil import basket at higher prices. In 2018, India began importing liquefied natural gas (LNG) from Russia as part of its strategy to diversify its supply sources and cater to the rapidly rising local energy needs. In the case of solar panels, India is caught between creating a domestic manufacturing base and the need to benefit from competitive prices available globally. India currently imports more than 90% of its solar panels. The Indian government has imposed a safeguard duty of 25% on solar imports from certain countries. Introduction of the safeguard duty and issues surrounding it have introduced uncertainties. Such duties would increase project costs and tariffs. Reducing import dependence in a crucial sector to India’s Energy Transition is required. However, domestic manufacturing capability at the water level is what would ultimately reduce import dependence. To build manufacturing capability, solar project tenders have also been floated with domestic manufacturing capacity built in. How the issue pans out is uncertain.
Electricity Storage stands out as one issue which cuts across areas such as Renewable Energy Integration, Electric Vehicles and Energy Access - all critical to India’s Energy Transition. Therefore price, technology improvements, new technologies, manufacturing capacities, and R&D capabilities are all critical. Battery chemistry based on commonly available materials is important in the context of current technologies. These materials include lithium and ion which are import-dependent. The Government is working on a National Energy Storage Mission (NESM) for India with an objective to strive for leadership in energy storage sector. This will be done with the creation of an enabling policy and regulatory framework that encourages manufacturing, deployment, innovation and further cost reduction.
Innovative Transport: The shift to electric vehicles (EVs) and the growth of shared mobility are seen as a single solution to combat import dependence on crude high at 80%, pollution and rapid urbanisation. The country aspires to have at least 15% share of EVs on the road in the next five years, and of 30% by 20302. The FAME scheme (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) provides the support for EV adoption. The task is enormous and encompasses electric vehicles manufacturing, battery manufacturing, setting up charging infrastructure, promoting electric vehicles in commercial fleets and public transport and utilising renewable energy in mass transport (similarly to Delhi Metro which sources significant electricity requirement from solar8). The volumes involved to make a difference and establishment of sufficient charging infrastructure puts the issue in the uncertainty zone. More targeted subsidies, better coordination within the Government, and considerable coherence between the government, public, and private sector participants in this area is set to bring about the rapid rollout of e-mobility infrastructure and solutions in many major cities of India.
According to the latest World Economic Outlook of the IMF, India will grow 7.3% in the Financial Year 2018 and 7.4% in the Financial Year 2019, and it is expected to be the fastest growing economy9. In addition, India is expected to be the largest growth market for energy by late 2020s, according to BP Energy Outlook 2018.
Universal access to electricity and commercial forms of heat are of high priority. Access to electricity is critical in reducing the wide discrepancy in living standards across various parts of the country. Hence, both federal and provincial governments are making all-out efforts to increase electricity coverage of households and large public and private sector companies are included in this process. This approach has had a greater measure of success and it is expected that India will achieve universal coverage of electricity quickly. Similarly, there has been a large increase in the consumer base for both piped natural gas as well as bottled compressed gas. As the second most populous country with a demographic dividend of young population, it throws immense opportunities arising from domestic consumption, employment generation both in manufacture and services across sectors. The price cycles of crude oil given the import dependence coupled with currency exchange rate continue to impact the economy. Environmentally sustainable growth is crucial and highly actionable.
Renewable Energy has shifted from the critical uncertainty zone to action priority probably indicating that it is more market driven. However, there are uncertainties due to import safeguard duty, unsustainable tariffs, and inadequate evacuation infrastructure. Successful state initiatives provide action windows for suitable adoption by other states. Recognising the challenges being faced in the solar rooftop segment, the central government has now prepared single window clearance. Thrust on exploiting offshore wind potential, developing the solar wind hybrid and realising pumped storage potential also provide further action areas. Achieving the renewable energy targets is crucial to meeting Paris commitments.
Energy Efficiency is clearly an action space for India. Considerable efficiency improvements are to be achieved in power distribution and utilisation. The draft Electricity (Amendment) Act 201812, which is an amendment to the Electricity Act, 2003 aims at being in line with the country’s changing electricity markets and systems, with their large renewable capacities and the emergence of a smart grid network.
The principal cause of weakened investments in the electricity sector has been the extremely poor financial health of the electricity distribution companies across the country. The customer base is rapidly expanding through governments energy access programs and sustainable and cost-effective supplies need to be provided. The ongoing Ujwal DISCOM Assurance Yojana (UDAY)13 for turning around DISCOMs has yielded varied results. The solution lies in sharply decreasing the crosssubsidies between different consumer classes in the sector and improving both the sector’s finances, providing correct economic incentives for competition, efficiency improvement and resolving the issue of stressed assets. The Electricity Act amendment is expected to improve efficiency and competition specifically in the distribution sector. The energy-intensive industries are covered under the Perform Achieve and Trade (PAT) a market-based mechanism, presently, in its fourth cycle covers 846 designated consumers.
Sustainable growth is key to securing prosperity and well-being of citizens in India. The electricity sector reforms envisaged through amendments in the Electricity Act are expected to pave way for path-breaking reforms. Reducing import dependence whether it be in the conventional space or renewable is of strategic importance. As technologies converge, focus on innovation would shape every segment. The readiness of policies and regulatory framework is important. Capacity building and employment generation for its young population with sustainable growth in energy would be a top priority for the country