Interview with Dr Varun Sivaram

“India needs an energy transition to limit emissions”

Dr Varun Sivaram is a physicist, chief technology officer of India’s largest renewable energy firm ReNew Power Limited and a senior research scholar at Columbia University’s Center for Global Energy Policy. Dr Sivaram’s previous roles include professor at Georgetown University, fellow and director of the energy programme at the Council on Foreign Relations, consultant at McKinsey & Co. and senior energy advisor to the Los Angeles Mayor and New York Governor’s Office. Forbes Magazine called him one of the 30 under 30 in law and policy, Grist selected him as one of the top 50 leaders in sustainability and PV Magazine named him “The Hamilton of the Solar Industry”. His books include Taming the Sun: Innovations to Harness Solar Energy and Power the Planet (published by MIT Press) and Digital Decarbonisation: Promoting Digital Innovations to Advance Clean Energy Systems. Renewable Watch met him on the sidelines of the Jaipur Literature Festival 2019. Edited excerpts…

Is India headed in the right direction by promoting renewables vis-à-vis other developmental priorities?

Yes. The energy transition is and should be India’s top priority when it comes to sustainability. Renewable energy is at the core of this transition for a multitude of reasons, from economic growth to air pollution.

I just moved to Delhi, which is a wonderful city, but I am choked by smog. Next, take energy security – India should not be dependent on imported fossil fuels. Finally, if India wants to restrain the growth of its climate warming emissions, which are growing rapidly, it needs an energy transition. In my opinion, India’s GHG emissions are one of the most worrying aspects in the fight against climate change. Even though China has far higher aggregate emissions, India’s are growing really fast.

What are the lessons India could learn from other global economies?

In fact, India could teach other economies a thing or two. A country like Germany probably overpaid for its renewable energy transition. German ratepayers today are saddled with very high costs from the country’s feed-in tariff programme. The rest of the world should be thankful to Germany for bringing solar power costs down during the 2000s. India played intelligent and waited until the costs fell substantially. The government has put a good auction design in place that is transparent and well run, and reduces counterparty risk by guaranteeing payments. India should share its auction design with other countries through the International Solar Alliance.

There are international trends that India should take note of. For example, in the US, large-scale solar and wind projects have been going up for a long time (since the 1970s). Those markets have evolved. So instead of raising revenue only from a long-term power purchase agreement (PPA) for 20 years with a fixed power price, many US renewable energy projects now raise revenue from diverse sources. For example, they might lock in a 12-year PPA with a corporation such as Google, trade renewable energy credits, and sell merchant power into wholesale electricity markets.

As India’s renewable energy penetration grows – it is now the world’s second-largest solar market after China – its markets may also need to evolve. In the power sector, India will need to expand markets, which are the most efficient way to allocate resources. Markets can drive investments in power system flexibility and facilitate grid integration of high levels of renewable energy. The industry can add flexibility if given the right market signals.

Which sector plays the most important role in the renewable energy space in India?

Every energy end-use sector has a role to play. The domestic sector, followed by the commercial/industrial sector, will matter because these sectors will drive energy demand in the form of, say, air conditioning. On the supply side, we need to power the grid with clean sources, because these demand sectors will need grid power. It is important to focus on utility-scale solar photovoltaic plants. Distributed solar, especially in conjunction with fuel cells, microgrid technologies, batteries, etc., are also important, but secondary to grid-scale solar and wind in magnitude.

How do you suggest we filter climate change issues down to the rural consumer level?

For consumers to have energy choices, you need a distribution sector that gives them choices. In the US and UK, you have various liberalised retail power markets. These allow individual consumers to choose their retailers. Retail choice can drive down costs and increase consumer access to clean energy. Electricity access is another issue in India. There are innovative ways to provide options to those who do not have electricity. For example, if local micro-grid operators are granted franchises to provide power services, they could complement efforts to extend centralised grids to rural areas.

The private sector can play a key role in enabling rural energy access through a combination of grid extension and micro grids, as a lot of innovation has been done in this sector. I’m proud of ReNew Power’s efforts to expand energy access through rural electrification. I’d also point to OMC Power, which provides renewable and cost-efficient power for mobile networks in emerging markets. The power supply comes from OMC’s micro-power plants, which extract clean energy from the sun, wind and biogas. The plants also have a battery bank, generators for back-up and a power management system for optimal energy efficiency and remote access.

How do we replicate the “climate warriors” or success stories, particularly in the field of renewable energy, on a larger scale?

I would call them innovators, which include entrepreneurs pioneering business model innovations.

In order for solar to achieve a 33 per cent share of global electricity by 2050, it will need three kinds of innovation – financial and business model innovation, technology innovation, and systemic or grid-scale innovation. We need more critical thinking about what India needs, given that the energy transition is extremely complex. And we need more technology innovators to build this ecosystem.

What are your views on the future of renewable energy in India?

We need more innovations to enable solar to keep growing. If India achieves its target of 175 GW of renewable energy, there will be states in the south (like Andhra Pradesh) where the instantaneous generation of renewables on a hot July day could greatly exceed the entire power demand of the state. To accommodate this excess energy, the grid will need flexibility. Strengthening transmission can add flexibility. So can the addition of storage, encompassing batteries, hydrogen, or pumped hydro. Coal plants will need to operate in a flexible mode. Natural gas peaker plants excel at this, but India will need to continue investing decisively in natural gas infrastructure. Look at California, where thanks to natural gas the power system infrastructure can tolerate an extremely high penetration of renewables. Finally, continued investment in nuclear energy could increase India’s baseload clean energy supply.

Demand flexibility is crucial; flexible demand can match up with variable supply. Demand response is one solution. For example, you can get several industrial plants to shut off their chillers at the same time when demand peaks. Demand flexibility can also be achieved with electric vehicles, which might pay a higher rate to charge during peak hours.

How will your book help the sector in India?

My book, “Taming the Sun,” is targeted at policymakers and scientists around the world, including those in India. It gives a blueprint to countries on how to increase their solar footprint. The chapter on finance addresses both developing and developed economies. When it comes to India, I focus a lot on how India drove down the global cost of efficient lighting. The example of the government’s Energy Efficiency Services Limited demonstrates that by harnessing its massive purchasing power, the Indian market can induce innovation by demanding advanced products such as LED lights.

What brought you to India?

For me, what made this move a no-brainer was the opportunity to work with Sumant Sinha, the current chairman and managing director of ReNew Power. We met when I hosted him at a roundtable discussion at the Council of Foreign Relations (a US think-tank where I directed the energy programme). Sumant was the most inspiring guest I’ve ever hosted, and he came across as a global statesman making the case for an energy transition. But he’s not just an ambassador for climate action – he is, more importantly, a results-oriented businessman, and that combination of idealism and pragmatism is why I like working for him at ReNew. I have now moved to India and plan to help ReNew Power – already India’s largest renewable energy company – to evolve into a global technology powerhouse. This will involve reinventing ourselves. For example, we are in the midst of a digital transformation to apply artificial intelligence, robotics, and automation across our business. We want to be a differentiated technology company, and not just an energy company.

 

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