EY helps clients create long-term value for all stakeholders. Enabled by data and technology, our services and solutions provide trust through assurance and help clients transform, grow and operate.
At EY, our purpose is building a better working world. The insights and services we provide help to create long-term value for clients, people and society, and to build trust in the capital markets.
How Indian businesses are navigating energy transition
HowIndianbusinessesarenavigatingenergytransition
In this episode of the EY India Insights podcast, we explore the intersection of climate change and energy transition, and the measures that India needs to adopt to achieve its energy transition goals. Kapil Bansal, EY Parthenon Energy Transition and Decarbonization Partner not only describes the historical context of energy production's impact on climate change, but also shares insights on the role of renewable energy technologies, and the pivotal roles of both government and private entities in driving a low carbon energy sector.
For your convenience, a full text transcript of this podcast is available on the link below:
Welcome to our latest episode of EY India Insights podcast. I am your host, Pallavi Janakiraman, and in this episode, we explore climate change and energy with our distinguished guest, Kapil Bansal. As a seasoned expert in energy transition and decarbonization at EY India, Kapil has been pioneering sustainable energy strategies for over 21 years. He leads innovative solutions in renewable energy, green hydrogen, and biomass to steer hard-to-abate sectors towards a low carbon future.
Thank you for joining us, Kapil, and welcome to our podcast.
Pallavi: Could you give us a brief overview of how energy production and consumption have historically contributed to climate change?
Kapil: If you look historically, from 18th to 21st century across the time frame, humans have moved a certain way. But especially in the 20th and 21st centuries, there has been a continuous transition of energy, both from production and consumption standpoint.
It all started from the solid state of coal to liquid state of oil, and then from liquid state to gaseous now and then in the near future, we are talking about electrons and continuation of gas. As you see, the transition that has happened, we started as humans from the industrial revolution. You have to see energy consumption from industrial revolution one to know, what we call the fourth industrial revolution. Every time, there has been a certain transition. Initial industrial revolution scheme had higher consumption of coal; coal was used in industries, in thermal, and still continues, while other sources of fuel got added. After coal, we got the crude oil, which came and led to the boom of the mobility sector. That is when we had the second industrial revolution.
Then came the whole third revolution, where natural gas came from the shale gas discoveries, and along with crude, lot of gases have come. Now, we are looking for a complete transition towards electrons, and that would be industrial revolutions four and five.
Every time there has been a continuous increase in energy consumption, and this energy consumption has led to huge amount of CO2 increase. Year-on-year, we have added roughly around 20 to 25 gigatons of CO2 on weighted average basis. But in the last few years, it has reached almost, a tipping point of 35 to 36 gigatons. There is a level till which the environment can take CO2 concentration, after which, the continuous temperature increase can be observed. This is what we call the greenhouse effect, with CO2 being one of the major contributors. Other gases include methane, nitrogen oxides (NOx) and sulfur oxides (Sox). For every one ton of CO2 that has been emitted, there is a certain amount that gets accumulated in the atmosphere, which impacts the overall climate change.
Historically, till now we have added almost from 20 ppm of CO2 to almost 400 ppm CO2, and as it progresses, the temperature will increase. We have already started touching one and delta increase of 1.5-degree temperature increase. So out of 365 days last year, we have observed 20 days in which delta increase of 1.5 degrees was experienced. A very recent incident, which happened last week, where Dubai has received almost two years of rainfall, in a single day – these climate changes are in direct correlation to the amount of energy that has been produced and then subsequently consumed in the different forms of conventional fuels, like coal, crude oil and its derivatives, gases including natural gas, and the new forms of gases that are being produced from crude such as LPG, propane, and butane. All put together, they have an adverse impact on the climate change that we are observing now.
Pallavi: Thank you, Kapil. According to you, what are the key changes needed in the energy sector to effectively mitigate these impacts on the climate change?
Kapil: A lot of the people are talking about different terms like energy transition, twin transitions or just transition. What it means towards the energy consumption is that we, as humans, are continuously evolving ourselves, and in order to continue our industrial growth, we still need energy as an important vector. But that energy needs to be transitioned from conventional fuels to more renewable sources, like solar. Sun is ever growing from billions of years, and the solar energy can be utilized to fulfill our electricity needs, our needs for fuels, for running our plants, as well as it can be used nowadays in the transportation mobility sector.
So, put together, if you look at the energy sector that we are dependent upon, from coal, natural gas, and crude oil, can be transitioned into non-conventional or renewable sources, which are sources like solar.
Secondly, there is a lot of wind. The wind energy can be utilized in the direct kinetic form to be converted into electricity. The third is hydropower. We have been blessed with a lot of water flow, and this water can be used in the form of hydropower. In fact, since ages, we have been using hydropower both for the purpose of irrigation as well as electricity generation. This is again a clean source of energy. Finally, there is nuclear and geothermal energy, which have been evolving, though there are different debates around these sources of energy. But a lot of R&D work has been done for nuclear fission and fusion, which would be the future of energy fulfillment.
Pallavi: What role do renewable energy technologies play and what challenges do we face in scaling up these technologies?
Kapil: There are two parts to it - one is obviously the role of technology and then what are the challenges that we can foresee now and in the near future. So, I will answer part one.
Technologies have two elements - adoption of newer set of technologies that we talked about - solar, wind, nuclear, geothermal, etc., which represent transition from conventional energy to new energies. These technologies have, over a period of time, matured and have brought in an element of commercial viability. In fact, today, solar and wind are cheaper than the conventional thermal power generated from coal or, natural gas. There are three things to consider where technology plays a role:
Technology maturity: As the technology gets adopted, it brings the cost down, making it commercially viable.
Technology at scale: Because we are talking about transitioning of gigawatts or terawatts of energy that is being consumed today, to be converted into renewable.
Multiple technologies working together: The third level of technology play, which is very important is that there will not be a single technology, but multiple technologies working in totality. Then only it will bring the benefits that we will be able to see.
Renewable will play an important role from the overall technological adoption at scale and utilizing all the necessary resources to make it happen. But definitely it will not happen without challenges.
The first challenge that technology brings is that every five years, things change significantly. So, the previous technology, which has been adopted, gets obsolete. How do we update the technology without major capital investment? This is important because we are a developing nation. For instance, earlier, the wind turbines were at, a kilowatt level, now they are at megawatt level. In future, they would be in multiples of megawatt level. So, how do we transition the obsolete technologies with the new technologies with the minimal capital investment - that is one challenge that we have to significantly look into.
The second is, as these technologies have different level of efficiencies and utilization factor, they compete with the existing technologies of conventional fossil fuels, because they are more reliable versus the renewable technologies, which depends upon the sun and the daylight and wind during the nighttime. So, what we need to bring is the faster adoption of multiple technologies, as we talked about, in order to bring reliability. Now, we are seeing more and more tenders at utility scale, which is larger scale being released by central agencies like Solar Energy Corporation of India (SECI) and National Thermal Power Corporation (NTPC) on what we call as renewable round-the-clock basis or firm and dispatchable renewable energy.
So, as we see, these technologies have to work together, not as pure play single technologies to mitigate the requirement from the conventional basis, to bring the reliability factor. Those are few of challenges that come to my mind.
Pallavi: Thank you for outlining those challenges. As we pivot towards clean energy initiative, what is the role of government versus private entities in driving this key change towards a low carbon energy sector?
Kapil: Government is already playing an important role in terms of creating ease of doing business to promote renewable energy. They are releasing new policies, as we see with the adoption of solar rooftop, and production-linked incentive (PLI_ schemes. What is most important is to create a mechanism from what is at the central level, being in a standard format to all-state level, because then it brings a lot of variations towards what central policies are talking about, and what the different state policies are bringing. So, a holistic picture on standardization of adoption towards renewable should be focused by the central and the state governments, in totality.
The second is that all these policies which have come out, are to grow this industry significantly. There is already a pathway laid down by our Honorable Prime Minister to make India least dependent upon fossil fuels, reducing almost 1 billion tons of carbon dioxide intensity with renewable energy. To do so, there is a plan to increase the renewable capacity to almost 500GW. To do 500GW, the role of public private partnership is important. An active participation by private entities towards the government incentives will help accelerate the overall clean energy initiatives.
Pallavi: Thank you, Kapil. What milestones should we aim as a country, in the next decade, to ensure that we are on track and aligned to meet our international climate goals?
Kapil: I will put it into continuous top activities to start for the next decade.
From an international goal perspective, in 2015, we signed a nationally determined contribution towards emission reduction, and we are significantly achieving those timelines as well as the reductions that we have, promised. We are ahead of many nations. We need to continue ensuring that, whatever the trajectory of our emission reductions that we have defined, we continue reducing that.
Secondly, as the technology matures, we need to adopt not just renewable energies, but different form of technologies that will help in the overall Net Zero strategy for India, which is where you can look for green hydrogen as a direct fuel, because it does not have any hydrocarbons or any carbon in it. So, more adoption of green hydrogen, biomass, bio energy and biofuels in various forms. India being an agrarian society, can help contribute in terms of reducing our dependency on fossil fuels.
Finally, one of the things that has never been explored at a large scale is tidal energy. We have such a big coastline, the tidal wave or tidal energy, geothermal that are available, we need to utilize those in a larger format, the way we have adopted solar and onshore wind. Again, there are tenders being released for offshore wind, but then the aspects of supply chain and the skillset of people to build those large-scale projects are missing.
So, we should start building those newer technologies, adoption of those newer technologies, building the skillset. Probably what we need to stop is, looking at the current conventional fuels, how it can be transitioned, or repurposed, because the captive power plants, which are running on coal can very well be repurposed, using biomass as a fuel to generate steam on a continuous basis, while the power can come from the renewable (source).
Coal power plants can be very well stopped from polluting and being dependent on either domestic or imported coal, which is the dirtiest fuel. Instead, it could be repurposed using biomass and the combination of renewables. Those are some of the milestones for the coming decade, where we can stand out.
We have always had a vintage point to build global associations, like what we have created for solar or coal, international solar lines, or for biofuels called Global Biofuel Alliance. We pioneer in doing that and bring all countries together towards the vision that our country not just thinks, but they do walk the talk about whatever they are thinking and executing on the ground.
With that, I would say we are well-positioned to continue being the pioneer in our carbon emission reduction focus, as well as ensuring that we leave this planet for our future generations the way our patents are given to us. Somebody said very well that we have borrowed this planet from our children, and we have to give them the back the way we received from our parents.
Pallavi: Agreed on that. Kapil. With that, we come to the end of discussion on this episode.
Thank you for joining us and sharing your invaluable insights on climate change and energy
with all our listeners.
Kapil: Thank you, Pallavi. Thanks everyone for your time.
Pallavi: Thank you to all our listeners for joining us on this enlightening journey. For those who are eager to delve deeper into the world of climate action and energy transition, I encourage you to visit our website where we have an array of insightful resources waiting for you. Do not forget to connect with us on our social media channels, to keep the conversation going, and to stay updated on the latest developments. Until next time, this is Pallavi, signing off.
If you would like to listen to our podcasts on the go:
