- Date and Time: March 16, 2022; 5:00 pm to 6:30 pm IST
- Topic: Energy Transition and Reforms for Sustainability
- Platform: Zoom
- Speaker : Anish De, Global sector Lead – KPMG National leader, Energy Natural Resources and Chemicals.
- Moderator: Dr. Madhu P Pillai, Advisor (Special), Industry and Energy, CPPR
About the Event:
The India Energy Samvad includes a series of webinars and dialogues on ‘Energy’ with the scientific community, industry experts, academia, and think tank professionals, in a global and domestic context, to produce actionable policy inputs and recommendations. The series aims to deliberate on key themes and issues relating (but not limited to) understanding how the energy policies, in general, must be modified in current scenarios to meet the demands and challenges of the sector. The deliberations will have the background of COP26 Glasgow (2021), and many learnings from the Global energy crisis.
The deliberations of the series will focus on how the energy market has undergone a change over the last few decades; the long and short-term competition among energy providers, and operators in the market encompassing private providers. Few of the deliberations will focus on the Indian policies that govern energy sources, pricing, and usage, the tariff and regulation policies, and the like. This webinar series is a timely intervention for the visibly pressing issues of the energy market, global and local challenges, country commitments; and to engage with relevant stakeholders as well as policy makers.
Highlights of the Event
This dialogue was focused on the transition and reforms for sustainability in the energy sector.
- The speakers started out with a thought that the journey from transition to transformation would be impossible without rationalism from the society and the people. The world needs a meaningful transition, this could happen with a change in the perspective of understanding among stakeholders.
- It’s actually not Transition, it is transformation” Looking at transformation of industry, government, social and corporation all are key to change the energy market paradigm. This was an opening thought put across by the guest speaker Mr. Anish De
- How we make the needle move! It’s important to have a dialogue and debate about the change. Discussion and dialogues on touching upon Large multi-dimensional problems and reaching a larger stakeholder will help transitional changes among people. This will help understand the products, processes, and challenges in the energy sector. So, at least to have a consensus and build a clearer road- map.
First point of Discussion-
The structure of the energy sector has mostly stayed unchanged for 3 decades now. The Electron flow in this sector is almost unidirectional. Is the change foreseeable in the future? If so, how radically will the change happen especially with the arrival of the renewable energy!
- From Transition to Transformation- a clearer road map is required, and that the Energy Sector has not changed for the last 3 decades. The discussion showcased the nuances of why that change has not taken place, but also that this may be a good opportunity to transition into a transformation.
- Some sectors change once a decade, but the energy sector is seen to be changing once a century. This is happening in current times is considered as the inflection point which is going to change the entire energy sector.
- In terms of the supply side, renewable and clean energy are becoming very cost – competitive and with respect to the climate concern as well. This is causing massive change showing a rapid growth in renewable energy to the point that conventional energy is not getting investments.
- The second challenge is the characteristic of energy. In conventional energy, we store the fuel and consume the electricity generated instantly. In renewable energy, it is variable and must be instantly consumed or stored.
- The third challenge, in some places the resources coincide. For example, in Saudi Arabia, both the sun and hydrocarbons are used for hydrogen, ammonia production. Possibility of the same source is not possible in many other countries like India. Renewable production is in the western and southern part of the country. Conventional production is more in the eastern part of the country. Technical and location characteristics cause a major disruption. Therefore, the growth is unprecedented and will have its effects.
- Broadly the energy sector, it was functioning in a top- down approach with renewable energy that dimension can change. The speaker saw that the consumers of hydrocarbons are going to be customers of renewable energy. A top-down approach will be converted to bottom-up approach with customers as producers soon.
Second point of Discussion-
The energy sector is one of those areas where digital transformation is happening in every aspect of change in operational or distribution. Will IT (information technology) and OT (operational technology) be shaping the energy sector of the future!
- OT has become accessible and combined with IT, it has created a new transformation. The potential has increased with every innovation. This creates a great opportunity for consumers to participate and bring in new- case to the user preference. The only challenge will be managing the grid
- In India, utility has been slow since they have not recognized consumers as customers. Now with technology customers are seeing a possibility to become a part of the large-scale production.
- The digital transformation can help the consumers to customize and use it to their advantage to shift this energy with the right technology. New products, new solutions, new startups can change the game for consumers. Awareness among user is crucial as well as recognize the challenges and its proper management.
- “Possibilities are huge for IOT and digital technology and create business model which will in turn help in transforming the energy sector” Green markets can combine with existing markets – for future benefits. This gives visibility, control, and possibility for the energy sector to grow.
- Behavioral changes can happen once the farmers start exporting the extra electric power to the grid. The bidirectional grid system is something great, especially to solve issues of groundwater depletion. This is a great potential to tap in.
Third point of Discussion-
Future electricity should be more efficient. What would be the role of the traditional utility in the future. With new players entering the sector with new ideas and big game changing business ideas, how can the Traditional utility sustain with their ongoing approach!
- With the introduction of “open innovation,” The dynamic of the sector and technological demand has made it open. “Technological changes in the energy sector have made the opportunities open”
- Network functions (Sophisticated network operation) will get more complex. Modern utility requires the right assets to keep the system running. Supply side should also include the best possibility for the changing users.
- Modern utility systems should merge with the traditional utility system and innovate along with the technology. This could bridge the gap and avoid financial losses.
- We are looking at massive electrification of society, with every household shifting to electric vehicles, this should be tapped in by the industry as early as possible. Investment in the right asset is needed.
Fourth point of Discussion-
Major engagement and development around climate change have been in the round. What should be the role of the government in the policy making and the management of the transition, and the customers (rate payers) reaction to all these shocks!
- The government has a policy making as well as an administrative role. They have struggled to strike a balance.
- With the ever- increasing electrification demand, the electric space is growing constantly. So, in terms of how the government should respond to this, the speaker stressed on the fact that the Government should consider all the three aspects including social, economic, and political as untenable situations.
- If the public and political parties reach a consensus and embrace openness for innovation, we could tackle the shift towards climate change in the energy market smoothly.
- In 20 years, we should first recognize the empowerment of the people, which should be the focus of policy makers. A Customer driven future should embrace the technological sector, freeing up the regulation and let innovation happen. Without forgetting the role of utilities acting as the middle agent.
- Mr. Anish also pointed out, policy making, and administrative dynamics need to be coordinated. Building consensus from all stakeholders before policies are formulated is especially important to protect the vulnerable groups as well.
- In our aim to protect the ratepayers, we are starting to affect them as well as the taxpayer, who think that they largely pay the price for the 80% of the inefficiency. Consensus building will have an important role in creating a fairer policy for taxpayers as well.
- “Large subsidy and cross – subsidization cannot sustain in the long run. It will invariably impact on the taxpayers bill.” – Anish de.
- With respect to the Ukraine crisis, the speaker pointed out that to Make India Self- resilient the reforms in renewable energy must be quick. India should secure its utilities. Especially since 80% of our oil is being imported from other countries. The recent Geo-political events should be a wakeup call for India to be independent in the energy sector.
This event report was prepared by Adyasha Mohanty, Research Intern at CPPR.
In case you missed it, watch the event recording here