Only a quarter of electricity is consumed by an average Indian than that used by an average Chinese. The reason is not that we are frugal but it is because many states like Uttar Pradesh, Jharkhand and Bihar have at least two out of three rural households in dark. Looking at this condition, our government’s aspiration for Digital India seems more of an Irony. India is sure to face a huge energy supply-demand mismatch in the near future.
Despite of the fact that we are the 3rd largest energy consumer in the world; one in four Indian households doesn’t have access to power. And with the changes like –increase in income levels, growing digital economy, and access to modern amenities, the energy consumption will rise two-fold over the decade. The question is -how can India power itself without burning coal and oils?
India has only 1% of the fossil fuels of the world. But on the good side, India has 15% of the World’s solar capacity. The facts indicate themselves that the growth lies in renewable energy, for India. However, India needs to put effort in converting this capacity efficiently into energy supply at affordable costs.
The cost of solar power has dropped by an order of magnitude over the last decade, and the time is right for solar power to replace kerosene and coal as primary source. NITI aayog attempts to do this by laying a policy road map for India’s renewable electricity by 2030.
The policies and economics are in the right place for India to build thriving businesses in the sector. So far only large-scale utility projects have been dominating the sector and these projects have dropped the infrastructure costs. As commoditizing infrastructure has become easier, India should look at what thriving businesses it can build in such ecosystem.
First is third party operations and maintenance for large scale utility projects. The idea behind this business is that building and maintaining large scale utility projects in the long term requires different skillsets. The main work for these service providers is to develop technology and standard operating procedures to keep costs low while maintaining high standards of power production. In the next five years, an annual market growth of INR 1,000 crore for these services that are going to address the 100 GW of planned installed capacity is estimated.
The other space that can be explored by new and innovative businesses is distributed generation. Distributed solar power generation enables the localized micro-grids to get a centralized generation infrastructure. With improvement in connectivity, lower costs of technology solutions, and the rise of third party operations and maintenance service providers, these micro-grids will finally be viable.
And the rise in technology, policy improvements and economics involved; will bring new businesses to strengthen the ecosystem. Right now, however, only above mentioned two areas are good opportunities. There are more businesses to come into the equation as bringing solar energy as the primary source of energy will require more and more of innovation.