By Rajiv Srivastava, CEO and Managing Director, Indian Energy Exchange
T he digital revolution over the past few decades has enabled consumerisation of sectors like banking, telecommunications, retail, entertainment and transportation, to name a few. This has offered a surfeit of choices to consumers, making these services ubiquitous and affordable and triggering unprecedented innovation. It is surprising then, that energy, which is a fundamental human need, remains insulated from digital disruption and consumerisation.
Today, India is the third largest producer of electricity in the world. Our installed capacity of about 370 GW is roughly double the country’s peak electricity demand of 184 GW. With such huge generation capacity, it should be easy for us to achieve, as per the government’s clarion call, uninterrupted, affordable, round-the-clock “Power for All”. In order to accelerate this, we need to assess every element of our end-to-end electricity value chain – generation-transmission-distribution structure and networks – electricity business models, rigid 25-year long-term contracts, strategic involvement of financial institutions and the regulatory environment, among others. Since the government has clearly set itself on a path of rapid growth in the foreseeable future, this is the perfect
time to make fundamental, progressive shifts. After all, most of the world has already solved these issues.
As a nation with an ambition to be a leading contender on the global economic stage, we cannot afford to disregard trends driving the energy economy. Glo-bal discussions on climate change have spurred India to sign the Paris agreement, pledging to achieve the goal of 40 per cent electricity generation from non-fossil fuel sources by 2030. In the past decade, there have been efforts to identify and mainstream new sources of energy, in addition to traditional fossil fuels and hydroelectric renewable energy sources. An accelerated move towards hybridisation of energy sources is expected to ensure access to green, reliable and affordable power for all.
Decarbonisation, decentralisation, digitalisation and democratisation are the four mega trends that are defining the energy shift. While the government’s thinking on decarbonisation is on the right track, with an integrated approach to enabling energy storage for large-scale integration of renewable energy, it still has some way to go in decentralising power generation to accommodate a new breed of prosumers, who are both producers and consumers of energy. We will see more intelligent control systems, virtual power plants, smart grid technologies, internet-enabled applications and smarter grids driving the sector to a new benchmark. In addition, peer-to-peer trading may well become the norm.
The introduction of technology-led energy exchanges in the country a decade ago was the first step in recognising that customers are now demanding greater flexibility, savings and energy choices. To the extent possible, within the regulatory constructs of the current energy regime, exchange markets have demonstrated the potential to offer choice to consumers – to select the electricity provider on factors such as price, time of day, transparency and even the colour of energy. Further, decentralisation and deregulation can ensure greater innovation and new product development, based on consumer insights and inclusion of several partners that spur the much-needed relevance and value creation for the power sector.
Consumerisation, enabled by technology disruptions, can be a great opportunity to advance our energy ecosystem. The Covid-19 threat, from which the world is currently reeling, has highlighted the convergence of climate change and human health. As much as this has an impact on the energy sector in terms of liquidity, future investments and policy change, we have an equal responsibility towards the populace to offer the choice of energy to our consumers.