August 31, 2017

Speaking at FICCI Business and Climate Summit 2017, New Delhi

Sadly, and I say this with a very heavy heart, we have made climate change a business in this word. And, the developed world today, particularly, the west is more concerned about what business opportunities come out of this very serious issue, rather than about the serious impact it will have on their businesses if we don’t do something very quickly. And that really bothers me a lot.

And I will share a small example just to highlight the thinking that troubles me and is now even more evident in some countries in the west. I was at a similar panel discussion in Washington DC, called by one of the senior-most persons in the previous administration, which was supposed to be very sensitive to climate change. We were to discuss ways to encourage more investment in green energy or clean energy. And I raised the issue about wastes, how people are wasting energy, the impact of waste on the entire world.

And I highlighted the fact that right outside White House, the lights were on that morning at 10 o’clock in the morning in bright sunlight. I highlighted what I saw the previous night where hundred-storey skyscrapers were lit up the whole night, with not a single person working in that office complex. But the city looks very beautiful, if you lit up a whole hundred-storey office complex for just the beauty of it. And one of the esteemed panellists, possibly representing business interests, says but what do we do our electricity, we have to sell it somewhere.

If that is going to be the approach of some business, not necessarily all, I think this world is in serious trouble. And, we in India are blessed that as a nation, it’s not only about the political leadership; it’s not about our business leadership, the fact that a 125 crore, or 1.25 billion Indians, believe that a better environment, a better planet to live in is our duty, not an obligation, is something that this country is blessed to have.

So, when we talk about promoting energy efficiency in India, it doesn’t need any mandatory provisions, it doesn’t need any force. The people of India absorb the new technologies very quickly. They adapt to it very fast. We did that with the LED programme, our energy efficiency to promote LED lighting. And we have scaled it up to about 300 times of what it was barely 3 years ago. We had about 660 million incandescent bulbs replaced by LEDs in a short span of 27 months.

Similarly, the ramp up on different types of renewable energy, and you just made a passing reference about trying to regulate prices; I thought India has done exactly the opposite. We have deregulated prices, let market forces prevail, provided transparent business opportunities to everybody and let the business world compete amongst themselves. Now, if at all you find some of the bids that they have made to be unreasonable, I wonder why people ask the government. They should ask the bidders, or the private sector. Because, I thought, at least you Swasthi have always held that the private sector are the smart people, governments are not smart enough. Most media feels that, particularly, the pink papers.

But the fact of life is that it’s a transparent honest bidding, we are only providing a platform. So, to my mind, the world will have to come to terms with the reality that if there is a problem up there, 29% of those greenhouse gases came out from just one country alone, which probably, barely has 5% of the world’s population. 45% of those greenhouse gases came out from the rest of the developed world, supporting less than 7-8-10% population.

India, supporting 17% of the world’s population, barely took out 2.5% of those greenhouse gases. And yet – and am not being arrogant about it, I am very sad about it – yet we are more concerned it seems very often about the deep impact of climate change on the whole world. We are wanting to go that extra mile, whereas I don’t see the same corresponding support or encouragement or even enthusiasm in large parts of the world.

You talk about climate finance. In Paris, large commitments were made, of course, they were made 5 years back also, which were totally unfulfilled, but in Paris, a lot of commitments have been made. And, clearly, low-cost financing, long tenure financing can help scale up and integrate more and more renewables much faster. But when you talk to anybody about it, they say, of course, we will set up your meeting with Goldman Sachs or with HSBC Bank. I don’t need the government of the United States or a European government to facilitate a meeting between Goldman Sachs and my companies or my country. I can do that myself.

So, I think the world will have to take a call how serious they are about the 5 enablers that can make climate change truly a fight where we are all in it together. I think we will have to decide that all the people of the world, 6 billion people, will have to get engaged just like our 1.25 billion country like India has engaged, all the people of India in this fight. And this is no less than the fight against terrorism, which a lot of Europe is grappling with, which India is grappling with for over 3 decades.

Of course, the western world didn’t understand our angst till they actually saw it on their own doorstep. Otherwise it was a local problem; finally, it’s an international problem. So, we will have to get more people’s participation, we will have to see a much more holistic approach to sustainability or sustainable lifestyles. We will certainly need to see, prosperity is good, I want all businesses to prosper, but it will ultimately have to be a world, which survives to enjoy that prosperity. And we will have to see peace in the world. And peace is not only external, it’s not that we should not have water fights between different countries – what we also face with our neighbours, other countries face it amongst themselves. It’s also within the countries. We will have to seriously look at allocating our resources better, be it water, be it the natural resources.

And lastly, I think all the countries and the businesses in the world will have to engage with each other, look at the partnership model to actually make this a success. The time for pontification or telling the other what has to be done has gone; each one will have to play a role. And when all of us play our role sincerely, there is no way we will fail in this mission to save the world.

Q: Given that, and everyone on the panel I think have said in various ways that it’s time for action, not talk. How realistic are some of the goals that have been projected and some of the goals in India itself, if we speak about a ….
A: India will exceed every one of the goals that we have set – exceed it. We will do much better than what we have set.

Q: Especially on renewable energy?
A: On every one of them. Renewable energy at today’s prices is below grid parity. Certainly, the challenge before us is that we have surplus power now, 7 decades after independence. I am sorry that it took 7 decades to achieve this, but in the last 3 years, we moved from shortages to surpluses. So, that’s the only little piece which is missing. We are looking at how we can engage more and more renewables into the system, which is why I am focusing on electric mobility. I see electric mobility as a demand generator where the renewable power can be used for expanding consumption for electric vehicles. And clearly, any engine which doesn’t have a combustion engine and has a engine which uses electric parts/electronics is certainly going to be more efficient.

So, I am looking at a holistic solution where the batteries in the cars will become my natural hedge or the grid stabilizer or the frequency stabilizer, and make sure that the renewable agenda can actually be exceeded.

I must acknowledge the leadership that France has given to the entire movement towards clean energy. And I must say President Macron in his comments, both before the election and after the election, has certainly demonstrated not only continuity, but possibly even more aggressive pro-clean energy, pro-climate change initiatives. And I must compliment you for that. France and India are jointly launching the International Solar Alliance.

But it’s also interesting to observe that while a 120 odd countries were contacted to join that, it has taken more than a year and a half, or two now, to get 15 countries to ratify just a platform with Zero costs, but to help engage with the less developed world and help them also enjoy the fruits of low-cost renewable energy. So, it’s a very serious thing that all countries in the world will have to reflect on are they really interested in helping the lesser developed countries to get into this fight.

And here a couple of points, what Harshpati mentioned – Green Bonds. Green Bonds is nothing but a bond; I don’t know why they even call it green. You don’t even get a 10-basis point reduction on a green bond, other than whatever is your credit rating. So, if it’s going to be a credit rated bond with absolutely no enhancement, no benefit at all, then we are only fooling each other when we call it a green bond, and try to say that we are doing a lot for the world when we are giving you green bonds.

Second, in the developed world with low costs of interests, low rates of interest, it’s much easier to adapt to newer technologies to bring about change through renewable energy. Countries like in the Pacific island nations – African nations, Asian nations, the developing world with currency depreciation, with inflation – we have a larger interest element to the renewable energy investments. And renewable energy is largely capital intensive, there is not much.. the sun comes for free, wind comes for free, water comes for free, there is no raw material. We have cheap labour, so no problem on that. It’s interest which is becoming a detriment to large scale roll out of renewable.

And there, the comments that you just mentioned about these 5,500 companies getting together, I think they were detrimental to the progress of renewable energy. A – They did nothing in terms of bringing down the interest cost, they didn’t do any commitment or any effort to save what they will do to encourage more financing other than clean balance sheets and sovereign guarantees. And by not financing coal, we are actually making the situation worse. If one was to replace all old coal plants with modern new energy efficient plants, you would save much more pollution than possibly setting up a 100 GW of renewable energy.

Second – you need a base load of power. Just because some of the developed world has shale gas now, and in any case, most developed world is still using coal indiscriminately. For your information, India uses as much coal today as the United States was using a 150 years ago on a per capita basis. So, it’s not as if coal is bad. You need coal as a base load. You can’t inject renewables into a system, which doesn’t have a base load. And, in any case, I am sure you want to have dinner tonight. You are not looking for a candle light dinner after solar energy winds up at 5 or 6 in the evening.

Your point is spot on. We already have a team under the leadership of Dr Ashok Jhunjhunwala, a very distinguished professor from IIT Chennai, who is working on standardizing the specs. We are not standardizing the battery specs. We are standardizing what will be the charging mechanism. I cannot dictate to each of the vehicle manufacturers what battery he will use, but as long as the charging infrastructure is standardized across the country, then any battery they use can be charged within the same infrastructure. But I would value your comments and your inputs into that committee, please ask your colleagues to be in touch with Dr Jhunjhunwala. He is in Delhi. He has come in from Chennai and he is stationed in Delhi now.

So, we are very seriously looking at a very holistic plan across the country where government will be a facilitator for the charging infrastructure, and try to bring scale to bring the costs of vehicles down.

And your one point on technology that you made, again a point of angst for me. I just remember, I thought I will share with all of you, since this is a business and government interface. I tried to talk to the world’s best university; I won’t take the name, to do research on carbon capture and utilization of that carbon. I am willing to finance it 100%. 100% financing – NTPC, who is our equivalent or smaller version of NG is willing to do that. I personally held meetings also. Where did we get stuck?

We got stuck because I said, look, when I am financing it, whatever technology comes out of it, I want to make it open access for the entire world. I don’t want to behave like some of the companies who get their technology, who then become masters of that technology or that patent, and then want to profit on that to the detriment of the world. I said I want to make that technology open to the world to use. They said no, no, technology will be ours, because we are doing the research, then we will sell it and make money out of it. That’s the sad part of patents and technologies.

I was asking a Minister who came to meet me yesterday from one of the Gulf countries that if we had terrorists right outside the door, right? Would we be negotiating patent rights and technology costs or would we be giving you equipment or you giving me equipment to fight the terrorist. This is a very similar situation.



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