Srivatsan Iyer, Global Chief Executive Officer (CEO), Hero Future Energies, offers insights into the growth and trajectory of India’s power sector…
As global CEO of Hero Future Energies (HFE), the renewable energy arm of the Hero Group, Srivatsan Iyer’s mission is transitioning people and businesses to a more sustainable future. His primary role is to strengthen HFE’s presence in domestic markets and grow its global presence.
His vast experience of working for several blue-chip companies across the world, his knowledge of business drivers in various economies and his ability to strengthen businesses in new geographies and collaborate effectively across cultures are valuable assets as he leads HFE and transforms it into a global organisation.
Iyer is a chemical engineer with a bachelor’s degree from IIT Madras and a master’s degree from Virginia Polytechnic Institute and State University. He also has a PhD in materials science and engineering from Virginia Polytechnic Institute and State University, and an MBA from the University of Texas at Austin.
Iyer is optimistic about the current state of India’s power sector, predicting the increasingly significant role of renewable energy in the coming decades.
India, the world’s third-largest producer and consumer of electricity with a generation capacity of approximately 400 GW as of March 2022, is on the brink of a major transition, Iyer notes. With the government announcing targets of net zero emissions by 2070 and 500 GW of non-fossil fuel-based capacity by 2030, almost all new capacity addition needs to come from renewable energy. With the increase in renewable energy, the inherent variability in generation increases and needs to be suitably accounted for and controlled by the deployment and integration of grid-scale storage, round-the-clock and firm power projects.
In addition, Iyer points out, T&D systems need to evolve to account for both transmission of power from resource-rich areas to demand centres as well as bidirectional power transmission due to the increased proliferation of distributed generation systems. The increase in renewable energy capacity also requires a supporting manufacturing ecosystem to fuel its growth.
The government has stepped in at the right time with well-designed PLI schemes for solar and battery manufacturing. These measures, coupled with the basic customs duty (BCD) and Approved List of Models and Manufacturers (ALMM), will disrupt the sector’s growth in the short term, but Iyer is “confident that the government and the industry will find a reasonable path forward to meet the ambitious renewable energy targets”.
Iyer is appreciative of the critical role played by government support and a favourable policy ecosystem in developing the renewable energy sector up to the point where it is now independently competitive with conventional generation sources. He predicts that these factors will continue to play an important role, supporting the development and deployment of technology solutions such as long-term energy storage and green hydrogen to address more complex problems of tomorrow, while providing a more level playing field and a free market for all players across the renewable energy value chain.
Iyer notes that the power sector in India has seen significant growth in the past couple of years, especially in the renewable energy space, with almost 110 GW of renewable generation assets in operation, 55 GW under deployment and another 33 GW under bidding. However, he adds, the sector needs to address some long-standing structural issues to ensure that growth is in line with these expectations, especially the goal of 500 GW of renewables by 2030.
Iyer identifies four main issues impeding the growth of the power sector – the fragile financial health of discoms, limited T&D infrastructure, high cross-subsidy charges and wheeling charges, and policy variations at the state level.
What is the way forward for the power sector in the short and long terms? Iyer offers some suggestions – discom restructuring, regulatory reforms, operational reforms, technology adoption and grid expansion.
“To ensure readiness for accelerated growth in the future, initiatives like dedicated green energy corridors, establishment of renewable energy management centres, competitive bidding for transmission infrastructure, and private sector involvement should be promoted,” says Iyer.
Similarly, long-term policy visibility and reduction of additional transmission charges and cross-subsidy on commercial and industrial (C&I) consumers will help promote investment in open access capacities, critical for the growth and decarbonisation of the C&I sector.
In addition, long-term policy stability at the state and central government levels will help evolve and implement mechanisms to streamline state policies and regulations, he says.
India has one of the largest renewable energy expansion plans globally and has set targets to reduce its total projected carbon emissions by 1 billion tonnes by 2030, cut the carbon intensity of the economy to less than 45 per cent by the end of the decade, and achieve net zero carbon emissions by 2070. Iyer acknowledges that these are very ambitious numbers for a developing economy of India’s size, but believes that “ambitious targets are a cornerstone for real accelerated growth”.
He adds, “At present, we have almost 110 GW of renewable energy excluding about 55 GW of large hydro. For this number to reach 500 GW by 2030, we need to see 40-50 GW of additions per year. Though we have seen the pace of deployment ramp up significantly from financial year 2021 to an all-time high of around 15 GW of wind and solar capacity addition, near-term disruptions due to global commodity pricing, imposition of BCD and ALMM, etc. may prove to be a dampener to new capacity addition in the short term. However, we are hopeful that the government will soon come up with policies and measures to ensure that developers and IPPs are able to deploy the required capacity in a timely manner to achieve India’s 500 GW renewable energy goal by 2030.”
For India to achieve its net zero target by 2070, it is essential to decarbonise the Indian economy, and the cornerstone of these efforts is the decarbonisation of the C&I sector, says Iyer. Achieving this goal requires concerted efforts on both the demand and supply sides. “Incentives for moving to green energy, along with easy access to open access renewable energy, will significantly speed up decarbonisation,” he observes.
Iyer honed his work ethic, personality and leadership style while working in various countries. His most memorable assignment was moving to Germany from the US for a business assignment, which proved to be a great learning opportunity. “It was a sea change in terms of integrating into a new culture and business environment, with significantly different ways of doing business than what I was accustomed to. It involved significant adjustments in both my personal and professional relationships in order for me to be successful,” he says.
Iyer brings this flexibility and adaptability to his passion for recruiting and developing talent and strengthening organisational capability. His management style is goal oriented, collaborative and pragmatic. “I am very performance and result focused in terms of my expectations from my team. I work with my team to develop a combined vision and then delegate authority and responsibility effectively to help them achieve it,” he says. He is a firm believer in the maxim “Hire good people and trust them to get the job done” as the most effective way of getting the best out of people.
The most rewarding aspect of Iyer’s job, which makes it all worthwhile he says, is working with people he likes and respects to build a cleaner and better world for the future.
While striving to achieve a sustainable future, Iyer is cognisant of the need for downtime and relaxation. “It is critically important to maintain a work-life balance in order for people to show up to work energised day after day and perform at 100 per cent of their potential,” asserts Iyer. He recharges and stays motivated by doing things that he enjoys – reading a book or going for a morning run.