Sumant Sinha shares his perspectives on the role of renewables in the future energy mix and how countries can collaborate to accelerate clean energy initiatives across the Asia Pacific region.
- Can you share more on the low carbon energy transition in India and the role renewables will play in the future energy mix?
Energy consumption in India has been growing at a steady pace of 6% every year. Historically, India’s energy needs have been met by coal, which made sense because of where the country was in the development cycle. But since 2014, the tide has turned massively in favour of renewables. Since then, renewable energy capacity has grown from 20 GW to 90 GW, and renewables’ share in electricity generation has almost trebled from 3% to 9%.
India is home to almost a sixth of the world’s population, but its per capita electricity consumption is about 1100 kWh, which is about a quarter of China’s average and a thirteenth of the US. But increasing urbanisation, rising consumption, and a steadily growing population are all factors likely to spur demand for electricity, which the country will have to meet through doubling its output by 2030.
This will have to be managed in parallel to India’s commitment to reducing emission intensity of GDP by 35% from 2005 levels, which is where renewables will play a major role. The expected increase in demand, coupled with sovereign commitment to reduce carbon footprint, makes renewables a favourable choice.
Although coal-fired power stations still constitute a bulk of India’s energy generation, new wind and solar capacities that are being auctioned are cheaper than the established coal-fired power generation tariffs. They effectively cost less than what it takes to run a coal-fired plant. These costs will also fall further when renewable energy companies begin to offer storage-backed tenders where average cost will be much lesser than that of a coal-powered plant.
India currently has 90 GW of installed renewable energy capacity. Of this: 39 GW is wind, 40 GW is solar and the remaining is made up of hydro, biomass and other sources. And India consumes 1.5 trillion units of electricity, which is likely to double in 12 years if the country maintains its growth at 6% or higher. Given the aggressive targets in India to generate installed renewable capacity of 175 GW by 2022 and 450 GW by 2030, most of the new capacity will come from renewables.
Even if we assume that “half” of this demand is met by renewables, it will still require and addition of 300 GW of clean energy capacity to the grid. This requires a massive investment in the sector, to the tune of US$500 billion as the latest report from IEEFA suggests.
-
How do you see the role of renewables evolving in Asia and what frameworks can be put in place to facilitate this?
Energy challenges across the Asian continent are similar for every country which is why it is important that Asian countries come together to share knowledge and discuss ideas that can benefit each other:
- Most of Asia is urbanising at a rapid pace. Industrial growth, coupled with rising consumption in some of the most populated countries, will drive up the demand for electricity. Studies estimate that the rise in consumption could be as high as 60% by 2035. This is common to India, as much as it is to Vietnam, Indonesia, Malaysia, or any other country.
- Achieving national energy security is required to protect economies from price fluctuations and market instability and to reduce dependence on imported energy.
- Improving access to energy services remains a key issue. An IEA report estimates energy access needs to be provided to over 350 million people in developing Asia who lack access to electricity.
- Finally, a shift to the use of low-carbon energy resources and diversification of the energy mix is required to enhance energy security, reduce environmental impacts, especially air pollution—and meet global commitments related to climate change.
Tackling these multiple energy-related challenges necessitates a transition in the way energy is generated, transmitted, and consumed. Major components of this transition include enhanced energy efficiency, increased renewable energy in the energy mix, improved energy access and better connectivity across the region. While the energy sector in many countries is slowly being transformed, the pace of change needs to be accelerated.
Every country in Asia has their unique set of challenges. While India has plenty of resources and land, it requires funds to invest in clean energy. Similarly, there are countries like Japan where land is scarce, so they are looking to tap offshore energy, but they also have plenty of capital to invest in clean energy. Therefore, there is a need for a comprehensive regional cooperation framework that promotes public-private dialogue to encourage innovative financing and private investment partnerships and attract investments in sustainable energy.
An Asia energy charter that lays out a regional legislative framework to provide private investors confidence in governments’ commitment; promote power grid connectivity within countries; strengthen policy to align energy systems transition; and build up government capacity to establish policies, strategies, and programmes to encourage the energy transition and promote regional cooperation. That would be my wish.
- In your view, what are the new technologies that have the most potential for Asia to address the intermittency issues associated with renewables?
I think that there is a unanimous view on storage being the answer to intermittency issues associated with renewables over the short term. Battery costs have been falling consistently. In 2010, a lithium-Ion battery pack cost US$1,200 per kWh. Today that cost is around US$120 and Bloomberg estimates that the price will fall by 8% every year to reach US$60 by 2030.
If coal prices continue to rise over the same period, the new renewable capacity, coupled with storage, can ensure 100% renewable energy generation for stable power to the grid.
In India, ReNew Power is the first company that is working to supply Round-The Clock renewable energy to the grid. The project currently under development envisages the use of wind, solar and batteries to provide a stable supply of renewable energy.
Over the long-term, Asia will also see growing use of green hydrogen.
Domestic consumption for hydrogen in India is around 6 million tonnes every year, primarily for fertiliser production and in oil refineries. TERI estimates this will increase five-fold to 28 million tonnes by 2050 owing to rising demand from these sectors in addition to the new use cases around decarbonised steel production, mobility, and transport as well as long-term energy storage to help respond to this intermittency.
The National Hydrogen Mission announced in this year's budget is expected to facilitate a Hydrogen Policy that may mandate hydrogen consumers to procure a proportion of their supply from low-carbon sources through instruments such as Hydrogen Purchase Obligations. This is expected to boost the green hydrogen ecosystem in India, including manufacturing of electrolysers and ancillary technology, servicing and a new asset class around RE-backed hydrogen production. We may also see opportunities emerge in the export of domestically produced green hydrogen, once the supply chain strengthens.
-
What are some of the opportunities for collaboration across the region that will shape a more sustainable energy future?
I believe that there are plenty of opportunities for companies and even countries in Asia to collaborate on clean energy. Japan and South Korea have been leaders in the deployment of batteries. India and several Asian countries can learn from their experience. The technology and knowledge sharing with IP protection can lead to the creation of many new clean energy unicorns in Asia.
At the national level, there are countries that do not have the land to set up investment in solar and establish wind farms. These countries can invest in other Asian countries such as India, where the land resource is available, and take carbon credits to offset the impact of emissions. Similarly, collaboration in banking and financial services will ensure the availability of low-cost capital to countries that can establish larger projects capable of transferring electricity through grids across borders.
-
This year’s SIEW theme is “Advancing the Energy Transition”. What are you looking forward to at SIEW 2021?
SIEW has been a good platform for exchanging knowledge and meeting like-minded business leaders and policymakers. I look forward to an open and candid exchange of ideas and fruitful discussions to chart the way ahead for accelerating energy transition in India and the world.
Sumant Sinha is the Founder, Chairman and Chief Executive Officer of ReNew Power – India’s leading clean energy company and among the top 10 largest renewable IPPs globally by capacity. A leading first-generation entrepreneur, Sumant founded ReNew Power in January 2011, with a vision to transform the way energy is produced and consumed in India. Since then, under his leadership, the company has grown exponentially and is today one of India’s premier renewable energy companies with an aggregate portfolio of more than 10 GW spread over 110 sites. ReNew Power was the first Indian renewable energy company to cross commissioned capacity milestones of 1 gigawatt (GW) and 2 GW, and is presently the only company in the Indian renewable energy sector with over 5 GW of operational capacity. ReNew Power generates 1.5% of India’s total electricity annually, and in doing so helps mitigate half a per cent of India’s carbon emissions in a year. In August 2021, ReNew Power started trading on NASDAQ under the ticker RNW.
Sumant is Co-Chair, Electricity Governor’s Group and member of the Stewardship Board on Shaping the Future of Energy at the World Economic Forum. He serves on the Board of Directors of the US India Strategic Partnership Forum (USISPF) and is a Member of the Board of Trustees, for The Climate Change Organization and Chair, India Advisory Group, The Climate Group. Sumant has been recognized as an SDG Pioneer by the United Nations Global Compact, a first for any Indian business leader, for his work in the areas of energy transition and gender equality.
After starting his career in the Tata Administrative Service, Sumant worked as an investment banker with Citicorp and ING Barings in the US and UK, before heading finance in one of India’s largest conglomerates, the Aditya Birla Group. He was also COO of Suzlon, India’s largest wind turbine company. Sumant has a Master’s degree in International Affairs from Columbia University, a degree in business management from the Indian Institute of Management Calcutta and also a B. Tech from the Indian Institute of Technology Delhi.