Interview (Dr. Arunabha Ghosh)

Dr. Arunabha Ghosh,
Chief Executive Officer at Council on Energy, Environment and Water

“Please tell us about CEEW’s role in the Indian renewable energy sector”

CEEW began operations in the same year that India's National Solar Mission began, and right from the beginning, we have tracked developments, not only in solar power but also in renewable energy overall. We believe that we've had a strategic role in the growth of India's renewable energy sector in three ways - the first is by lending an independent insight into what is working right or wrong from day one. When the government had announced the original target of 20,000 megawatts, many in the community, including in the environmental community, didn't believe that India had a future in renewables because the technology at the time seemed costly. Lending an independent oversight of what was happening in the market with project developers, with investors, and so forth, helped us give insights into what needed to change for the rapid scale-up.

The second way in which we've had a critical role is by focusing on the larger ecosystem, which includes not just the developers, but the ecosystem that involves regulators, that involves distribution companies, that involves investors, international investors, and so forth, so that we look at renewables not just as a feel-good sector, but as a deep infrastructure sector.

The third way in which CEEW has had a strategic role is by focusing on finance. In this, we took intellectual leadership many years ago by outlining what kind of financial ecosystem would be needed to grow renewables in India. Subsequently, our work has demonstrated that it is not technology costs, nor is it policy, it is the cost of finance, which is holding back an even more rapid scale-up of renewables in India. Taking this into account, we recently launched the CEEW Centre for Energy Finance (CEEW-CEF), which acts as a non-partisan market observer and driver and monitors, develops, tests, and deploys financial solutions to advance the energy transition. It aims to help deepen markets, increase transparency, and attract capital in clean energy sectors in emerging economies.

By combining these three efforts, we have not only been able to create the conditions and give the right inputs at the right time but also lend that credible oversight of what is happening. In short, we have helped to create, shape and deepen the renewable energy market in India -- and are now taking our work to other emerging economies, such as Indonesia and South Africa.

We now recognize that the energy transition is not just about renewable energy, but encompasses transformations in energy access, in technologies, in business models, in the governance of energy markets, and inhuman behavior. It spans renewables, energy storage, sustainable mobility and more. India’s energy transition is now the world’s energy transition. And for that reason, in July 2019 CEEW organized Energy Horizons (with 600+ national and international delegates), an international platform where the global energy transition is discussed.

“CEEW’s latest report has highlighted that the investments in the Indian RE sector have doubled over the last 5 years. According to you, what are the key drivers for the surge in capital infusion in the sector?”

There is no doubt that there has been a significant ramp-up of investments in renewables in India in the last five years, and in the last three years, year on year, renewables have beaten thermal power investments in India. The most important driver has been a transparent bidding process, which right from the beginning (not just five years ago, but from the time the Solar Mission began and now for wind as well) has followed a competitive reverse auctioning process, which ensured that a relatively poorer economy with lower per capita incomes was able to grow a sector that had stalled in many richer countries, such as in southern Europe, because they ran out of government funding. India ensured that this competitive market was created.

The second big driver was in policy direction and target setting. In 2014-15, when the government announced the scale-up of renewable energy targets (CEEW had a role to play in the analytics that went into the decision), it set a direction of travel and put a concrete basis to the always known potential for renewables in India so that developers and investors could see that this was serious.

The third thing that drove RE growth as solar parks, which helped to overcome some of the land acquisition problems and offer, especially to international investors, a plug-and-play model whereby they could come in with their technology and plug into an infrastructure that existed for deployment and the evacuation of power.

The fourth thing that has driven growth has been de-risking the investments through clear policy messages, clear guidelines, and so forth, which was brought down the cost of finance. It is not as low as it could be, not as low as it is in many other emerging economies, but it has certainly dropped, compared to even three years ago, which is why the tariffs have also dropped. These remain the main drivers for why there has been a massive growth in renewable energy investments.

“According to a report, the Indian RE Sector witness a five-fold rise in its workforce. What are your views on this as one of the key factors to achieve the country’s ambitious 175 GW RE Target by 2022?”

There is no doubt that any kind of new infrastructure investment in India cannot be viewed only through the lens of investment and hard infrastructure being built. We also need to account for the social dimension of that infrastructure investment. This is because infrastructure is land-intensive, it is capital intensive, and the immediate benefits to communities are not there because it is not a consumer goods sector. This is why analyzing the social benefits of renewables has been critical, and which is why CEEW and its partner institutions have, for many years, been tracking the growth of the renewable energy workforce.

The latest numbers from CEEW and the Natural Resources Defense Council suggest that between 2014 and now, the workforce in renewables has gone up from about 20,000 to just short of 100,000 people. This fivefold growth is still short of what we estimate will happen if we have the 175,000 megawatts of renewables. Our estimate is that there will be a workforce of 330,000 people. On top of that, the latest work that CEEW and Power For All have done, suggests that about 95,000 direct jobs have been created in distributed renewable energy as well, with many more indirect jobs created through the expansion of the rural economy.

This is still an under-appreciated co-benefit of the renewables revolution. In a country where millions have to find employment on an annual basis, we need to find more greenfield opportunities which create gainful employment and decent working conditions. This requires the upskilling of the workforce across the value chain, it requires paying attention to their working conditions, it requires paying attention to where they would get trained versus where they will work, as well as the nature of their careers as it unfolds. Paying attention to this brings the renewable energy revolution closer to the communities and could serve as a further fillip for India's growth story.

“What are your views on India’s Energy Transition? How do you see the existing sector developments contributing to sustainability and energy efficiency?”

India will undergo four energy transitions between now and 2047 when it's a 100-year-old independent nation. The transitions include: a move-away from energy poverty and use of traditional energy, to access to modern energy; a shift of people from rural to urban areas, driving new patterns of urban energy demand; a deeper integration of India into global energy markets; and a move from growth to sustainable growth, as we grow the economy while working under a shrinking carbon budget. Therefore, the energy transition is not singular but plural and requires a combination of deep developmental priorities of energy access, growth priorities of kinds of jobs and economic opportunity created in urban areas, geopolitical priorities as we engage more deeply into global energy markets, and environmental priorities as we think about sustainable growth.

The existing developments in renewables have been a very good start, along with the fact that we have managed to bring more than 350 million people to access to electricity for the first time in the last decade, and 720 million people have got access to clean cooking energy over the past decade. So this big shift towards energy access and renewables is very much a positive story for India's energy transition. However, it is not enough until we start looking at that combination of clean energy driving new economic growth, especially in our industry and in our commercial sectors. Once we're able to demonstrate that, then renewables and the energy transition is not something that's running in parallel to the overall growth story, but in fact, becomes the driver of the growth story. India has to aspire for growth, jobs, and sustainability, and we have to design our energy transitions in a manner that satisfies all three priorities.

“CEEW has advocated the need for sustainable mobility in the country. What are your views on Government’s E-Mobility push through varied policy framework and technology innovations?”

India is already the world's third-largest country by population if we took only its urban residents, and this massive urban population is going to find another 500-odd million people joining it, over the next few decades. Sustainable mobility will be at the heart of making our cities liveable and prosperous. But sustainable mobility is not just electric mobility. Sustainable mobility starts first with reducing the demand for mobility so that our cities are designed in a manner that people have to travel less and have time to do more. The next step in sustainable mobility is the shift from private to public transport for those who are reliant on private transport, and access to modern public transport for those who are reliant only on their feet. This will create a more equitable mobility system for our cities, allowing millions of people to live and work in a manner that has dignity as well as creates an opportunity for prosperity. It's only the third step, where better-designed cities, along with public transport help to drive the move towards electric mobility.

The government's push for electric mobility is welcome, especially if it focuses on public transport. It is a leapfrog, just as we are trying to do with renewable energy, it is a bet on the future. That said, there has to be a plan not just for the switch from internal combustion engines to electric vehicles, but everything else that goes with it - the ancillary industries that are reliant on the current automobile sector; how those workers get retrained and redeployed to other industries including electric mobility; the bets on technology, particularly on batteries and materials; and the bets on finance that will help make this electric mobility revolution a sustainable one. Most importantly, there will be a backlash against this leapfrog if we were not able to capture a strategic bet on a new green industrial policy, which means that electric mobility in India has to go alongside a strategic focus for very high indigenization, meaning there has to be a high level of value addition for our electric vehicles at home. It could be for the vehicles, it could be for the batteries, it could be for the charging stations, and related infrastructure. But without deep indigenization, we will not be able to cancel out the loss of industrial value addition, in the traditional automobile sector.

“What future do you see for Indian RE Sector in the upcoming time concerning current developments?”

The future for renewables in India, as well as for the world, as bright as the Sun. But just like the Sun, it is a faraway future. What matters is the steps you take in the immediate future, to make sure that this journey comes with the least disruption and the greatest opportunity. To do this, we have to deal with very real risks. Those risks are related to projects specifically, whether it is acquisition of land, whether it is finding the workforce that will deploy the systems, whether it is finding finance at the right cost; but it's also related to the larger ecosystem, the credibility of policy, even more importantly, the credibility of regulation, the sanctity of contract, the evacuation infrastructure coming up alongside renewable energy projects, and even creating international opportunities for our companies to expand their businesses outside India, and finally, tapping into the opportunities from rooftop solar, offering electric mobility, and so forth, which ties up the energy transition with the mobility transition. All these will require very detailed, incisive steps in the immediate future if we have to realize their long term ambition, otherwise, it will be a future that is very bright, but also always just around the corner.

Interview 02/08/2019 by News Bureau
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