By Dr Sapan Thapar, Convenor – Innovation Cell, TERI School of Advanced Studies
With more than 200,000 enterprises working on a myriad of contemporary challenges, India hosts the world’s third largest start-up ecosystem. These ventures, driven by young innovators, work across a range of themes, including fintech, e-commerce, space, artificial intelligence (AI), health, robotics, drones and defence. Incubators have been set up across the country, providing an enabling ecosystem for the start-up community. Start-ups are categorised based on their technology-readiness level (TRL). Start-ups at TRL 1-3 work on proof of concept and seek seed funding from angel investors; those at TRL 4-6 develop prototypes and avail funds from venture capital firms; and TRL 7-9 focus on market deployment with support from private equity funds.
One of the sectors that can be strengthened in terms of innovation is clean energy, typically referred to as cleantech. As part of its climate commitments, India has set ambitious targets with respect to solar, wind, storage, hydrogen, smart grids, biofuels and electric vehicles, and is working to become a net zero economy by the year 2070. Though significant progress has been made in terms of installed capacity, certain challenges inhibit the next level of growth. These include grid integration and curtailment, high cost of storage and climate-related issues. In addition, import dependency with respect to critical minerals and equipment (polysilicon, permanent magnets and battery packs) hampers the progress.
Involving young entrepreneurial minds to develop out-of-the-box ideas into practical solutions can alleviate some of these challenges. Educational institutions like Indian Institute of Technology, Indian Institute of Management and National Institute of Technology offer incubator facilities for cleantech ventures. In addition, the Ministry of New and Renewable Energy (MNRE) provides funding support for research and development (R&D) activities. However, limited success has been witnessed in the cleantech start-up space, and the same can be attributed to various factors.
A key reason is a disconnect between industry and entrepreneurs. Energy companies (independent power producer [IPP] and engineering, procurement and construction [EPC] players) working on thin margins focus on project execution and have minimal engagement with the start-up community. They prefer direct imports of equipment (due to competitive pricing), obviating the need for research. With electricity requiring technical safeguards and tariffs determined under a defined protocol, the sector is highly regulated. Public sector units are typically involved in power transmission and distribution, leading to entry barriers for private entities. Under these circumstances, a start-up, working on an efficient solar cell or developing a gravity-based energy storage system, may find it challenging to operate. Another factor is the lack of dedicated space among established incubators for cleantech. The current focus of academia as well as funding agencies is on areas like fintech, AI, space and robotics. They view energy as an enabler, rather than a standalone sector. A related issue is students’ interest, with a limited number of institutes offering energy-related programmes.
The aforementioned challenges can be addressed by following a holistic approach. At the first stage, problem statements can emanate from the industry as per their field-level experiences. Government agencies, project developers, manufacturing industries, IPPs, PSUs and utilities can list pain points in the form of “open challenges/hackathons” for the start-up community to work upon. Learnings can be made from initiatives undertaken in sectors like defence (iDEX), drone (NIDAR), AI health (CATCH) and space (TAF), wherein industries and government agencies seek solutions under similar formats. Cleantech incubators can be hosted within the existing institutional set-up of the MNRE (for instance, National Institute of Solar Energy, National Institute of Wind Energy and Sardar Swaran Singh National Institute of Renewable Energy), wherein dedicated space can be earmarked. Corporates and utilities can open centres of excellence to work on niche problems. Scientists, industry professionals and academia need to be engaged for mentorship as part of their routine work profile.
Research undertaken at TRL 1-3 can be funded under the MNRE’s R&D programme, with a mechanism of technology transfer under a fee-based mechanism. For TRL 4-6, corporate social responsibility funds from power sector PSUs can be tapped. And, private sector funding can be sourced for TRL 7-9, in lieu of tax offsets. Higher educational institutions (like IITs, NITs and TERI SAS) can motivate students to undertake internships at start-ups, in order to expose them to alternative career pathways. The suggested measures can enable success stories similar to Vikram-1, developed by Skyroot Aerospace, and innovations by BotLab Dynamics, to emerge from Indian cleantech start-ups.
