India is currently seeing a great transition in energy supply and consumption. This has brought up many questions in the industry: What affordable fuel mix is optimal, and should the market or government policy decide? To decrease pollution in Indian cities, how will the fuel mix choices need to change, especially in the power and transport sectors, where fossil fuels now dominate? How can national champions leverage their customer reach in the energy sector to bring the best technologies to consumers?
In a CERAWeek 2019 panel, India’s Energy Security: Choices in Affordability & Sustainability, Emerson president Mike Train shared his perspective on the energy industry in India.
One panelist opened by setting the stage on India’s current energy situation. The primary concern is ensuring energy security, sustainability and access. Today, about 83% of the country’s domestic crude oil consumption is met by imports. To shift to a more sustainable energy supply, the primary focus is to ensure policy framework is put into place, so the amount of imports is greatly reduced.
Mike shared that Emerson has been in India for 35 years now and is seeing an economy that’s easily growing 7% each year–the fastest growing large economy in the world. Emerson has a really interesting perspective on the way technologies are being adopted in India. With over 7,000 employees in India, Emerson is providing automation technologies to customers throughout the country such as sensors, instruments, valves and software. Mike has a unique perspective because he’s able to see the impact from the business side, as well as through Emerson’s customers’ eyes. Emerson is working to support companies and governments in India in these energy transformation efforts.
Another panelist pointed out that it’s important to honor the central government’s efforts to captivate the world’s imagination in terms of what India can do. They set the vision for the power sector. Engagement within the states is critical, as they all want to be energy secure. So far, the central government has been incredibly successful at connecting hundreds of millions of people to the grid for the first time, which is closing the supply vs. demand gap. It’s also created new complications with the management of the new base load.
It becomes important to figure out what the effective ways are for stakeholders to engage in this process. More people now have access, but the states must be able to improve billing efficiencies, check the losses, stimulate the demand for power and have quality and reliable power. As the states tackle the energy access issue it also becomes complicated for them to try to integrate renewables–which is where the connection between the central government and the states needs to be rock solid. This is essential for trying to connect all of India to the grid.
One panelist further illustrated the current India energy scene. There are 1.34 million people and today, the energy is made up of 30% oil, 6% gas, 56% coal, 1% nuclear, 4% is hydro, etc. Coal is highly carbon emitting, but there are highly evolving technologies in place that are reducing emissions.
In the future, the percentage of renewable energy will substantially increase, oil will decrease, coal will significantly decrease, and gas will significantly increase. This has to be achieved and it cannot be achieved in isolation. It needs the cooperation of state government, international organizations, the central government and various ministry governments. They are working to increase gas usage to 30.15% by 2020.
For that to happen, billions of dollars have to be invested–which is already in progress. In less than three years, 70 million people have been connected to the grid. Another 10 million are projected to be connected by April 2020. The oil companies, state governments and many stakeholders are working around the clock because they are committed to having energy sustainability. One panelist declared that because of the passionate commitment behind it and because all stakeholders are involved, the goals will be accomplished.
Mike shared that over the last 5 years, there has been a lot of vision–and also bold execution. For Emerson, as a participant in this process, it has been very encouraging to see. The technologies are being embraced and there’s an attitude now about using the technologies, not to get the minimum accomplished, but to use them effectively and be top performing companies. Mike sees it all coming together through building high quality infrastructure, utilizing these technologies and building a strong foundation.
The key message coming out of this panel was partnership. Through partnerships across the entire industry, this effort is firing on all cylinders.