Green Energy Startups: Translating India's Goals Of Energy Efficiency
Venkatesh Dwivedi, Director (Projects), Energy Efficiency Services, 0
Adver the past few years, the energy discourse has witnessed the paradigm shift from ‘energy conservation’ to ‘energy efficiency’. The latter has been labeled as the most effective instrument to achieve India’s energy goals of reduction of emissions, economic energy intensity and energy sustainability. Bolstered by the result of four decades of integrated efforts of policy support and implementation by domestic and international stakeholders, India’s energy efficiency programs have saved approximately 13 GW of annual generation capacity. In monetary terms, this entails savings of over $10 billion in the form of avoided capacity generation and reduced energy bills. Numerous policy initiatives by the government such as the Energy Conservation, the Energy Conservation Building Code and many more have played a crucial role in laying the framework for energy efficiency.
Green energy startups are an integral component of India’s energy efficiency story. These startups have played a crucial role in bridging the gap between an idea and prototype. They are centerpieces of innovation paving way to problem-solving, not limited to the areas of forecasting, transmission, and procurement, enabling India to achieve the goal of energy efficiency. Another important aspect is the technological enhancement they bring to the country cannot be ignored. These startups are leveraging emerging technologies which generally lie at the highest end of the value addition chain.
As India’s energy market mature, the role of innovation as the pathway to expanding access, efficiency, quality, affordability of supply and de-carbonization will be inevitable. India’s new and emerging business landscape will need to adopt different business models which will disrupt the status quo which startups can do as they are free from encumbrance.
The ambitious programme of ‘Startup India’ has acted as a catalyst to the growth of startups in India and fostered an ecosystem of entrepreneurship in India. Furthermore, the thrust provided to Make In India and Digital India as among the ten important dimension of India’s vision for 2030 in this year’s Interim Budget will undoubtedly propel startups in the country. It is also heartening to note that numerous corporates have also come forward to provide training and mentoring to these startups.
According to an estimate, energy efficiency can mitigate 500 billion units of energy, avoid 100 GW of power capacity – translating to a potential reduction of 557 million tonnes of CO2 emission – within 2030. Currently, the nation has achieved only a fraction of its total energy efficiency potential, which is estimated to be $23 billion (approximately Rs 1.5 trillion). India has demonstrated both implementation willingness and knowledge capacities in its pursuit of aggressive energy efficiency. Substantial capital inflows at an unprecedented scale are the crucial component to translate the goal of energy efficiency. As per the International Energy Agency (IEA), the quantum of necessary investment in energy efficiency over the next 25 years might be as high as an additional $800 billion. This investment will determine how fast, effectively, and at what scale India brings new technology, practices and energy services to its people.
Another significant hurdle is the risk perception of energy efficiency owing to the relative newness of its technologies and the new business models that today’s energy-efficiency projects leverage. Unpredictable variables like regulatory risk, or general economic risk caused by the business cycle, fluctuation of exchange rates and energy prices further enhance this risk perception.
Being a home to burgeoning population and among the largest energy consumers, India will need a vibrant, thriving and innovative financial mechanism to ensure that it augments the energy value chain
In what may be call a breather for the sector, NITI-Aayog has recently recommended making energy efficiency a priority lending sector. However, what is now needed are innovative, low-cost fiscal instruments that aid plethora of multi-sectoral energy innovations to enter the market.
The intervention potential for targeted innovations – technologies, processes and business models that can sustain clean energy supply and responsible consumption while balancing development ambitions - is not only significant, but a critical need as developing nations like India bear the brunt of the burden of climate change action. To spark this movement, Energy Efficiency Services Limited (EESL) and World Resources Institute (WRI) conducted #InnovateToINSPIRE Challenge. The challenge invited participants to submit sustainable and scalable solutions to seven specific challenges spanning grid management, e-Mobility, energy efficient technologies and financial instruments. The challenge identified four path-breaking innovations in energy efficiency and clean energy.
Being a home to burgeoning population and among the largest energy consumers, India will need a vibrant, thriving and innovative financial mechanism to ensure that it augments the energy value chain across fuel sources, sectors, stakeholders, investment, by building resilient linkages among energy developers, suppliers, consumers, and intermediaries.