The country has done immensely well in renewables despite being a late starter, says Anil Sardana, managing director (MD) and chief executive officer, Adani Transmission, and MD, Adani Power. He believes green hydrogen and technological advancements will be among the biggest changes in the energy sector in the years to come. Excerpts from his recent interview with Power Line…
What have been the most noteworthy achievements of the power sector over the past 25 years?
If you look back at the power sector, its eventual aim was to provide electricity solutions that are affordable and reliable and that can actually be the engine for the economy because power is one of the most important inputs for economic growth and activity. In these 25 years, the country has grown in its various economic pursuits and, therefore, one can easily conjecture that power has played a significant role.
An important aspect that immediately comes to mind is bringing the whole country to a one-grid system and effectively managing that in terms of a synchronous grid on the supply side as also on the network side, which is laudable. The evolution of various frameworks in terms of having an independent system operator through Power System Operation Corporation, and the maturing of the regulatory frameworks in terms of various regulations and tariff formulations, have been other hallmarks of these 25 years.
I would summarise that India has come of age. It has worked quite well on the generation and transmission fronts and it is remarkable that although we were one of the late starters in renewables, today we are one of the three largest renewable energy economies. Even in other sources of generation, we have reached a significant capacity and many of the beneficiaries have started saying that the country is almost in a surplus situation, leaving aside what we saw in the past few weeks. Overall, the power sector has indeed taken formidable shape and is one of the most important providers of economic growth of the country.
What have been the major disappointments or failures in the sector?
When it comes to areas of improvement, there could be several and that is true about any business, economy, or personal pursuits. Coming to the power sector, distribution is the first area where we certainly could have done far better than we seem to be doing today. Other areas where one could have marched forward at a much faster speed is the movement of molecules and their displacement with electricity. A case in point is electric vehicles, and the other is various storage methodologies, which can help us meet our peak requirements. Lastly, we could have done better in aspects related to technological interventions and eventually supporting the narrative of the customers. We still have opportunities for improvement in these areas.
Even in the adjunct areas, we have taken the liberty of damning coal without realising that for a country like India, with growing power demand, we do not have alternatives that really fit into the framework. Therefore, taking our eyes off reforms in the coal sector is one of the weaknesses that we need to address and is a possible takeaway from the past 25 years for the next five years. We need to make sure that the coal side evolves even as the alternatives evolve. Similarly, on the technology side, we need to make sure that we provide much better services to customers. Last but not the least, we need to make sure that our distribution system is given a lot of attention in the years ahead.
“We have taken the liberty of damning coal without realising that for a country like India, with growing power demand, we do not have alternatives that really fit into the framework.”
What will be the biggest changes in the power sector in the next 25 years?
In the future years, one would see a change in the energy basket. Today, close to 81 per cent of the energy basket is molecules and 19 per cent is electricity. Of the 81 per cent, a large component comprises hydrocarbons and carbon-related molecules. The world clearly understands and is moving towards the displacement of carbon molecules and, therefore, towards embracing the cleanest form of energy, which is electricity.
It is predicted that in the years ahead, perhaps in the next 10-15 years itself, the share of electricity in the energy basket will climb from 19 per cent to 50 per cent. The balance 50 per cent will be molecules and within molecules too, you might see a displacement of carbon molecules with hydrogen and that too, green hydrogen rather than grey and blue hydrogen, which is currently deployed in various processes as feedstock.
We will, therefore, see a change in mega ways – more electricity will be used as an energy source and green hydrogen and its derivatives will displace carbon molecules such as ethanol, methanol and ammonia. It is going to be one of the biggest takeaways in the coming years. In addition, we will see renewable energy taking centre stage, evolution of storage, and technology playing a key role in terms of connecting customers to the source of generation and making middleware a static entity. The government recently announced general network access, which implies that the middleware will become like a facilitator. Customers will have the choice to source (electricity) from any of the generating sources, which will mean that electricity may be sold like telecom services. You will have the choice to source for a few hours, for a day, maybe a week ahead, maybe a fortnight or a month ahead, and so on.
“We will see more electricity being used as an energy source and green hydrogen and its derivatives will displace carbon molecules.”
What will be the biggest challenges that the power sector will face? And how would one go about addressing those?
Anything that is an opportunity also has its challenges. One of the biggest challenges will be skilling, whether it is policymakers, regulators, engineers, executives, financiers, lenders or judges. Skilling is one area where we need to focus in a much more profound manner compared to what we have today, and it will pave the way for the transition that we talked about. So far, we have not done capacity building of those who need to enable this transition. Besides, technology is playing a key transformational role with data analytics, leading all the way through machine learning, artificial intelligence, deep learning and virtual reality. We are capturing information for condition monitoring and for improvement through sensors, IoT, and then further deploying technology to make things more competitive and effective. The inclusion of the language of technology across the length and breadth of people who get associated with it is important. And that is a big challenge today.
With the proliferation of technology, one has to deal with legacy issues in terms of cost and people’s perception. Around the year 2000, when computerisation was a big buzzword, there was a discussion whether computers will displace jobs, but we found none of that. People had to be reskilled. We will have to give exactly the same education now. Technology proliferation will not mean that people will lose jobs. It is just that people will have to be appropriately reskilled to deal with the newer challenges that will evolve with the advent of technologies. Last but not least, we will have to break the gap of electricity access. Today, many households do not have access to 24×7 electricity. A lot is said about the fact that a significant capex has been spent on laying wires to villages and hamlets that did not have electricity. However, it will be useful to have criteria to determine whether those people are consuming 30-50 billion units, which means that they have one light, one fan at their homes and that is being catered to in a reliable way. Electricity access in many geographies in India, Southeast Asia and more so in Africa is a big challenge and it will be important that we as a world community deal with this issue and deal with it sincerely. Otherwise, the quality of life of the deprived lot will continue to suffer.
What is your business outlook for the sector in the long term?
Today, renewables have been largely developed by the private sector of India along with several investors from outside. Similarly, if tomorrow hydrogen storage technology and electric vehicles require people to invest, to do capacity building, and to enable energy transition, I am sure the private sector will respond appropriately and each company will do its best.
What are the top priorities for Adani Power in the short, medium and long term?
We collectively look at ensuring that we as a significant player in India, continue to work on all aspects that provide competitive reliable electricity to users, participate in effective distribution reforms, work towards consolidating our position of being the largest private player in transmission, look at customer needs with regard to how the electrons need to be generated, be it through renewable energy, or any other alternative sources (including conventional methods of electricity generation) and last but not least, facilitate the shift from molecules to electricity, from carbon to hydrogen in an expeditious way. I am sure that the Adani brand will continue to endorse such a thinking in the days ahead.