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Fast-tracking energy transition with Atmanirbhar Bharat
In the third episode of our ‘Energy Transition Dialogues’ series, we dive deep into the interplay between India’s energy transition and its self-reliance initiative, Atmanirbhar Bharat. Join Somesh Kumar, Partner and Leader, Power & Utilities, EY India, as he explains the Indian government's strategies for accelerating energy transition and offers relevant insights into policy impacts, innovation, socio-economic growth, and the evolving landscape of India's energy sector. Tune in to this insightful conversation that illustrates India’s path towards a sustainable and self-reliant energy future.
Somesh Kumar
Partner and Leader, Power & Utilities, EY India
Vinit Mishra
Partner, Technology Consulting, EY India
Key takeaways:
India's energy transition focuses on innovation, promoting renewable energy, and aligning with Atmanirbhar Bharat to reduce import dependence.
Government initiatives such as the National Green Hydrogen Mission and PLI schemes are accelerating clean energy adoption across sectors.
Energy transition in India presents significant socio-economic benefits, including job creation and skill development.
The future energy sector will transform, with consumers becoming ‘prosumers’ and utilities reorienting to accommodate green, decentralized energy production and distribution.
Innovation is at the heart of Atmanirbhar Bharat, and the energy sector's evolution is pivotal for achieving self-reliance.
For your convenience, a full text transcript of this podcast is available on the link below:
Vinit Mishra: Welcome to ‘Energy Transition Dialogues,’ where we talk about the pivotal points which are reshaping the energy sector. Today, we are talking about energy transition integration with self-reliant initiatives of Atmanirbhar Bharat. We have Somesh Kumar, Partner and Leader, Power & Utilities, EY India. He has more than 20 years of experience in the power & utility sector, steering the sector amidst its ongoing transformation. It is our pleasure to have you here, Somesh.
Somesh Kumar: Thank you, Vinit. I am delighted to be here.
Vinit Mishra: Can you give a comprehensive view of the Indian government’s policies to promote or accelerate energy transition?
Somesh Kumar: Before answering the question, I must say that I have been working in this sector for quite some time, and I am passionate about the changes happening, particularly in energy transition. The Indian government has taken tremendous steps to promote energy transition and, in fact, to accelerate it. Both on the supply side as well as the demand side, the sector is witnessing changes and the government is accelerating these through policies, interventions, etc.
If we talk about the supply side first, the major changes are in the in the clean energy sector or the renewable sector, where the government has been laying down policies one after the other to accelerate energy transition. One of the most recent changes is around the National Green Hydrogen Mission, which seeks to promote green hydrogen in a big way. We have seen policies around offshore wind, which includes some of the path-breaking, newer technologies. We have seen policies not just at the central level, but at the state level as well to promote solar rooftops.
The government has also laid down various fiscal incentives, including performance-linked incentives (PLI), which go a long way in promoting certain specific technologies. Adjacent to this, we also see subordinate policies and regulations. For instance, policies around ‘must run’ (power) plants, which promise that green plants will run for a certain period of time. We have also seen Inter-State Transmission System (ISTS) energy charge waivers for renewable plants, which promote renewable energies. We have seen green energy open access regulations and the Approved List of Models and Manufacturers (ALMM) standards being pronounced, which give us a range of suppliers in the market on a level playing field. In the budget, we have seen the ethanol blending and setup scheme for biogas. So, a host of schemes have been pronounced by the government to promote energy transition on the supply side.
On the demand side, whether you look at the industrial sector, agriculture sector, or the transport sector, again, huge incentive framework has been laid down for moving towards cleaner and greener forms of energy. For instance, all the industries are promoted are incentivized or rather, there are regulations in place. For example, the renewable purchase obligations require them to buy a certain amount of energy from cleaner sources. They must migrate to cleaner energy sources for their energy needs.
If you look at the agriculture sector, we are seeing PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan Yojana), where the agriculture pump sites will now be energized through solar in a decentralized way or even connected to the grid. Again, an initiative to move towards cleaner forms of energy.
In the transport sector, there is a huge thrust towards e-mobility and moving away from the conventional forms of energy. As I said, both on the supply side and on the demand side, the government is promoting ways and means to move towards energy transition. That is my initial take on the energy transition, as you asked.
Vinit Mishra: Would you like to shed more light on the specific programs or partnerships that support innovation and Atmanirbhar Bharat in energy sector?
Somesh Kumar: Innovation is the key, or is at the heart of Atmanirbhar Bharat, and energy sector is no exception. In the energy sector, too, while achieving atmanirbharta, the key is to innovate as much as possible.The standard technologies that have been in use will no longer help us in reach atmanirbharta. For example, if you look at the PLI scheme, it promises very high-efficiency solar modules, which are pivotal in encouraging domestic manufacturing and reducing import dependence. The higher efficiency of modules will only come through innovation.
Similarly, if you look at the evolving list of solar PV modules and their manufacturers under the ALMM scheme, they emphasize and promise to provide a list of modules as well as players who are reputable and innovating. Likewise, if you look at either the battery cell manufacturing or the Green Hydrogen Mission, the whole crux is to innovate for better technology, and at the same time, reduce cost. Whether we are talking about the costs of producing green hydrogen or transporting it for various applications, the whole emphasis is on how to innovate, how to bring about newer ways of doing the same thing, and thereby achieve atmanirbharta.
I would also like to mention that there has been a significant partnership between the industry and the academia to promote innovation and encourage more research and development. The government is also supporting this partnership through the availability of skills as well as budgetary outlays. All in all, innovation is key to ensuring atmanirbharta in the long-term.
Vinit Mishra: In terms of socio-economic growth, how is India managing the rapid energy transition while upholding the principles of Atmanirbhar Bharat, especially concerning job creation and skill development?
Somesh Kumar: While we are moving towards energy transition, we are shifting towards cleaner and greener sources of energy. Besides the direct impact it is creating on the environment, there is a huge socio-economic benefit accruing to the society, or which will accrue to the society.
You mentioned job creation. Both directly and indirectly – directly in terms of developing power projects or indirectly through the supply chain and other miscellaneous works – it holds the potential for significant job creation in the market. For instance, if you look at the renewable energy sector itself, according to an EY calculation, the utility-scale projects alone are estimated to be able to generate about eight lakh jobs over the next few years. Similarly, if you look at the PM-KUSUM A, B and C schemes, they are likely to generate one lakh jobs in promoting the scheme. Even the battery cell manufacturing and the battery cell projects alone could result in about 5 lakh jobs. So, there is huge potential for job creation. These are very conservative estimates – the ripple effect will be larger for the society.
There will be both direct and indirect jobs. When we talk about the skills, most of these jobs will not be unskilled in nature. So, most of these jobs will require some level of skill, which means a skilled workforce will be available. As part of the energy transition, we might move away from coal-based plants, which will involve reskilling of the manpower, creating new kinds of skills in the market.
I have seen that many institutions in the country are leading efforts to provide skills to the market. There is National Skill Development Corporation (NSDC) and many other organizations associated with the major players of the power sector that are now helping with skilling for the energy transition. Both in terms of job creation and skills, there is tremendous positive change on the horizon. There are also a lot of socio-economic benefits associated with energy transition.
Vinit Mishra: How do you envision the evolution of India's energy sector with these government-led initiatives?
Somesh Kumar: The energy sector, whether in India or anywhere else in the world, will not be the same anymore. The energy sector is going through a huge transformation, both in the way energy is produced and the way energy is consumed. If we talk of energy consumption first, it is likely that each consumer will also become a producer of electricity in some way – as we say ‘prosumers,’ a term which is being widely discussed. The way the energy will be consumed will be totally different. It will no longer come solely from large power generation plants and be consumed. The consumers themselves will be using or generating electricity. Also, electricity will increasingly have the component of green. So, we will have less reliance on polluting coal-based or gas-based plants powering homes or industries and shift more towards greener energy choices.
In terms electricity production, as I mentioned earlier, it will mostly come from renewable energy. We (India) have committed ourselves to 500GW of renewable power by 2030, almost 50% of the energy coming from renewable sources. So, the way energy is produced will be completely different from what we see today. This is a huge transformation in how the energy sector operates.
I would also like to highlight that the current incumbents in the utility sector, which includes large PSUs and state entities, will likely have to reorient their generation, transmission and distribution. For example, the business of power distribution may not remain the same. It will change because consumers themselves will operate differently – they will no longer just consumer electricity, but also produce it. There will be a two-way supply of power, and many may even move away from the grid for various reasons.
There is a huge transformation in the way distribution and generation is happening. Similarly, large PSUs are rethinking their operations – all of them will have to reorient their purposes. We will have to see what new businesses they have to cater to and how will they shape themselves for the future. Again, the current incumbent utilities will need to transform.
The energy sector really needs to evolve, and huge changes are expected. New institutions, such as the International Solar Association, have also emerged, promoting energy transition in a big way. Similarly, other organizations might come up in the future to support energy transition. So, significant changes are likely to happen in the energy sector, both in terms of its structure and how it has operated.
Vinit Mishra: Thank you, Somesh. Your expertise has truly illuminated the intricacies of India's energy transition and this path toward self-reliance. Thank you.
Somesh Kumar: It has been an honor to share my thoughts and thank you for having me. I am very grateful.
Vinit Mishra: To our listeners, we appreciate your engagement in this energy transition dialogue. We will have more such sessions around India's energy transition and transformation in the future. Until next time, goodbye.
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