Jitendra Mohananey, former Chief Financial Officer, Inox Wind Ltd and Finance and Renewable Energy Sector Expert, discusses new learning, diversification, and the growth of India's renewable sector
Navigating the energy transition towards renewables and sustainability is a complex and multifaceted challenge that requires a comprehensive understanding of various factors, including technology, policy, economics, and social dynamics.
ET Edge Insights spoke to Jitendra Mohananey, former Chief Financial Officer, Inox Wind Ltd and Finance and Renewable Energy Sector Expert on India’s renewal sector, its challenges and opportunities, and sustainability.
How would you characterise the ongoing energy transition within the power sector?
Let us first understand what an energy transition is. It is a process of moving away from or shifting from fossil-based (primarily coal and petroleum) systems of energy generation to renewable energy (solar, wind, etc.).
There is a major thrust on renewables across the globe. A key takeaway from the Russia-Ukraine war is that countries across the globe are working on energy security (uninterrupted availability of energy sources at an affordable price) and see renewable energy as the only solution. This global energy crisis has triggered unprecedented momentum behind renewables, with the world set to add as much renewable power in the next 5 years as it has in the past 20 years.
The current energy transition in the power sector can be characterised as a profound and multifaceted shift towards cleaner, more sustainable sources of energy. This transition is driven by a combination of factors, including growing concerns about climate change, technological advancements, evolving consumer preferences, and policy initiatives aimed at reducing greenhouse gas emissions.
Renewable energy sources, such as solar, wind, hydro, and geothermal power, are playing an increasingly pivotal role in reshaping the power sector landscape. These sources offer the advantages of being abundant, environmentally friendly, cheaper than thermal, lower risk, better IRR for investors, and are capable of decentralising power generation. As a result, they are gradually displacing traditional fossil fuels like coal, oil, and natural gas, which have long been associated with pollution and carbon emissions.
This transition is not just about the sources of energy but also encompasses changes in energy infrastructure, grid management, and energy storage solutions. Smart grids, energy storage technologies, and advanced monitoring systems are being integrated to efficiently manage the intermittent of renewable sources and ensure a reliable power supply.
The energy transition is also influencing the way consumers interact with energy. Decentralised energy generation is empowering households and businesses to become energy producers through technologies like rooftop solar panels. Moreover, digitalisation and data-driven insights are enabling more efficient energy consumption patterns and demand-response strategies.
However, it’s important to acknowledge that the energy transition comes with its own set of challenges. The intermittent nature of renewable energy sources necessitates robust energy storage solutions to ensure continuous power supply. Additionally, the transition may have economic implications for regions that heavily rely on fossil fuels for their economies.
What are your thoughts on the Prime Minister’s vision of a zero-carbon country? How could US-India ties benefit India’s renewable industry?
Globally various countries have set the target for themselves to become net zero. The USA has set the target for 2050, China for 2060 and India for 2070. I believe India can achieve well before 2050 as the sources of renewable energy by and large have remained untapped. Look at the totally unexplored coastal length of India -7600 Kms, already waiting for offshore wind power generation.
The Prime Minister’s vision to achieve a zero-carbon country is a strategic move that aligns with India’s commitment to addressing climate change and transitioning towards sustainable energy sources. This vision, outlined in initiatives like the International Solar Alliance and the commitment to renewable energy targets, demonstrates India’s dedication to reducing carbon emissions and promoting a greener future.
The ties between the United States and India could indeed greatly benefit India’s renewable sector. According to the United Nations Framework Convention on Climate Change (UNFCCC), India’s renewable energy capacity has already expanded significantly, with a fivefold increase in solar installations. The U.S.-India partnership could leverage the U.S.’s technological advancements and expertise to enhance India’s renewable energy infrastructure further.
The U.S.-India Strategic Energy Partnership, launched in 2018, has already yielded positive outcomes. This partnership focuses on enhancing energy security, promoting clean energy, and fostering economic growth. Collaborations under this initiative include the U.S. Department of Energy’s participation in India’s Green Energy Corridors and Smart Cities programs, which facilitate technology transfer and expertise sharing.
Moreover, the World Bank reports that the United States has been a significant contributor to financing India’s renewable energy projects, supporting initiatives such as the development of solar parks and grid integration. The U.S. Overseas Private Investment Corporation (OPIC), now the U.S. International Development Finance Corporation (DFC), has also invested in renewable energy projects in India, contributing to the growth of the sector.
Can you elaborate India’s 10-year renewable industry growth. How do you think the policy changes will benefit businesses who have already invested in renewable energy, and what are the biggest obstacles they will have to overcome?
Needless to mention, in the last decade the Government of India has done a commendable job in promoting renewable energy and precisely because of that India is very well placed on the world map of renewable power by occupying 4th position (163 GW) after China (1161 GW), US (352 GW) and Brazil (175 GW). The Government of India (GOI) has in my view already put all the requisite policies in place to promote renewable energy in India.
The major challenge that I see in future, is to bring to India the rapidly changing technology though this may come at a cost which may in turn result in a slightly higher cost of generation. As I have said in my previous publications if GOI has to make offshore wind energy a success, it shall think out of the box and provide several incentives including but not limited to PLI, exemptions in duties and taxes, GBI, tax deductions etc.
Being an industry veteran how will you translate demand for the thermal power sector compared to renewable?
As an industry veteran, I understand that the dynamics between the demand for the thermal power sector and renewable energy are undergoing a significant shift. Over the years, the energy landscape has been evolving due to various factors, including environmental concerns, technological advancements, policy shifts, and changing consumer preferences.
Traditionally, the thermal power sector, which primarily relies on fossil fuels such as coal, oil, and natural gas, has been a dominant source of energy generation due to its established infrastructure and reliability. However, the growing emphasis on sustainability and the urgency to address climate change have prompted a transition towards renewable energy sources like solar, wind, hydro, and geothermal power.
In terms of demand, there has been a noticeable surge in interest and investments in the renewable energy sector. This is driven by factors like environmental awareness, policy support, technology advancement, public demand, and energy security.
While the demand for renewable energy is on the rise, it’s important to note that the transition from thermal power to renewables is a complex process. Existing thermal power infrastructure and workforce skills need to be transitioned gradually. Additionally, ensuring a stable and reliable energy supply as renewable sources can be intermittent requires robust grid management and energy storage solutions.
It’s also worth mentioning that the energy transition is not uniform across all regions and countries. Factors such as geographical location, resource availability, policy frameworks, and economic considerations play a significant role in shaping the energy mix.
It is well understood that renewable energy cannot replace thermal power 100% due to the inherent nature of its dependency on Nature. Though going forward the demand for thermal power is expected to reduce at least by 50% given the availability of the storage technology of renewable power. Today solar power and wind power are far cheaper than thermal power.
Sustainability is becoming increasingly important in the business world. How do you integrate sustainable practices into operations?
What is sustainability? It’s an ability to maintain or support a process continuously over some time. In business practices, sustainability seeks to prevent the depletion of natural or physical resources, so that they will remain available for the long term. We firmly believe in using recycled material and minimising carbon footprint.
Integrating sustainable practices into operations is not only a responsible approach but also a strategic one that aligns with the evolving expectations of customers, investors, regulators, and the broader community. As someone who values the long-term viability of the business, here’s how I approach the integration of sustainable practices into operations:
Leadership Commitment: The first step is ensuring that sustainability is a core value embraced by the leadership. This commitment should be visible in the organization’s mission, values, and strategic goals. When leadership champions sustainability, it sets the tone for the entire workforce.
Assessment and Goal Setting: Conduct a thorough assessment of the company’s current practices, resource consumption, and environmental impact. Based on this assessment, set clear and measurable sustainability goals. These goals can encompass areas like energy efficiency, waste reduction, carbon emissions, and resource optimization.
Incorporate Sustainability in Strategy: Embed sustainability into the overall business strategy. Ensure that every strategic decision takes into account its environmental, social, and economic implications. This might involve evaluating the environmental impact of supply chain choices, product design, and distribution methods.
Employee Engagement: Educate and engage employees on sustainability initiatives. Employees can play a crucial role in identifying opportunities for improvement and driving behavioral change. Foster a culture of sustainability through training, workshops, and open communication.
Efficient Resource Management: Implement practices that minimize resource consumption. This might include energy-efficient technologies, water conservation measures, and waste reduction strategies. Consider adopting circular economy principles that promote reusing and recycling materials.
Supply Chain Sustainability: Collaborate with suppliers to ensure they adhere to sustainable practices. This could involve selecting suppliers with strong environmental and social records, encouraging sustainable sourcing of raw materials, and promoting fair labor practices.
Innovation and Research: Encourage innovation that aligns with sustainability goals. Invest in research and development to find innovative solutions that can minimize environmental impact while improving operational efficiency.
Transparent Reporting: Establish transparent reporting mechanisms to track progress toward sustainability goals. Regularly communicate the company’s achievements, challenges, and plans for improvement to stakeholders, demonstrating the commitment to sustainable practices.
Investment in Technology: Embrace technologies that can facilitate sustainability. This might include adopting renewable energy sources, implementing energy management systems, or utilizing digital tools to optimize resource allocation.
Continuous Improvement: Sustainability is an ongoing journey. Regularly review and assess the effectiveness of sustainable practices and goals. Identify areas where improvements can be made and adapt strategies accordingly.
By integrating these practices, a business can not only reduce its environmental impact but also improve operational efficiency, enhance brand reputation, attract responsible investors, and contribute positively to the communities it operates in. Ultimately, the integration of sustainable practices becomes a source of competitive advantage and a testament to a business’s commitment to a better future.
