Scaling Clean Energy to Power India’s Growing Demand

This is Dana Perkins and you're listening to Switched on the B and EF podcast, and today we bring you a recording from our BNIF Summit, New Delhi, which took place on the fifth of September. Our summits take place in locations around the world and highlight the most pressing issues in the energy transition for that region. In India, the most populous country in the world, we focus on how a global transition to a lower carbon world is having an impact on the future of energy, transport and

And guess now firmly back on the growth track after a few blips that we saw in the last few years. In fact, this year, BNF forecasts that India will add more wind and solar than it has ever done before. Now our growing power demand has reaffirmed the importance of energy security, but low carbon transition remains front and center of policymaking. To discuss the scaling up of clean power in the country, we have a very stellar panel with us here today, let's start this discussion. I want to

How do you de risk execution?

I think I'll phrase my answer a little differently. I think if you were to ask a question, what do we need to do to move fast to accelerate the deployment of renewable I'll start from the bottom of that list. I think we all are aware of the challenges of grid connectivity, evacuation. I think there is a plan in place, but let's talk about what we can solve when we should and we must solve to accelerate execution and two things which and one thing I feel is not captured.

There is people.

There is a big gap of people with adequate vocational skills, ability to retain them, mobilize them to some of the project sites and make sure that they are able to deliver a high productivity on our projects. I would pick that up as a topic of focus, which something we are looking at and I think the industry is also focusing on. And although supply chain disruption may not look like an issue.

But if we are looking.

To deliver returns to our shareholders, if you're looking to do projects at scale, these supply chain disruptions, test our to execute, test our limit to move fast. We are looking to domestically source these goods. And you know, I think it's very well known in the industry that we still don't have a very resilient supply chain. I think the way time of inverters the transformers is very high, and I think there's a huge opportunity to fix that, to make investments in that space and make sure that

Perfect you mentioned return to shareholders. That's something I'll come back to because it's a topic that's that deserves much more attention. How do we get these IRRs out? But before that, good dig question to you. You know NTPC has a twenty thirty two renewable target, but obviously it will play a very important role in any Government of India plan to scale up the cold fleet to meet

Let's try to understand that we are the largest power producer in the country and we remain kind of the backbone I think the energy NTPC and power grid. If you're just taking and we are not here only merely for the profit motive, I think this is important to be noted and I think for the consumer, it is important that consumer gets the uninterrupted, reliable power supply.

Which is affordable and the transition is inevitable.

But at this point of time and the short frum, medium trum long term, what can be the energy mix which will ensure that there is no interruption and we are able to supply.

So we can all these things into mind when we are going AHT.

So the call base capacity which we are still adding and there are some other private developers are also adding because that's a necessity at this point of time, because we are the fastest mowing economy and our energy needs are.

Also intendem and increasing day by day.

So it's important that everybody is having the clean source of energy. And as you know that we had connected each and every household in the country twenty eighteen nineteen, and we have seen the surge in the demand in the past few years, so there is a space for everything. But I think this is this provides this space for all sorts of energy. Our focus has been mainly in the lasts four or five years back that we will be putting more and more renewable energy, which remains intact.

So we have declared that.

We will be reaching to almost sixty giga or by twenty thirty two. And I'm just again reliterating here that our work is perfectly online as per ower target. In addition to that, we are adding some coal capacity, which is also important, and by that time we should be lending somewhere like sixty forty kind of thing by twenty twenty thirty two. So I think this is what at present ganet.

It's the overall scenarios.

Thank you, sir.

I'll go to Google next. And we've talked about growth in power demand. Now tech companies have also reported very strong uptick in their own power consumption because of data centers, because of AI, because of various other reasons. Now, how does this affect the global goal to have twenty four by seven hourly clean matching of clean power?

Yeah, so I think we need to recognize that the energy transition is an inflection point at the moment. So we see this growing demand and this demand is becoming steeper and steeper, and this of course is a challenge for our systems.

To put things into perspective.

So data centers, industry wide electricity consumption is today estimated to be around one percent of the global electricity demand.

And where is dress coming from?

Well, of course, as we continue to electrify and digitize our systems so heating, transportation, industrial processes, manufacturing, and therefore the electricity grids.

Need to adapt to this new wave of demand.

And this is investments in a generation, investments in transmission, and not only the hardware side of things, but also the software side of things.

So how do we make our.

Twist these systems more efficient and more effective? Now, the key question is, as this demand is growing, are we gaining enough on energy efficiency? So can we somehow balance these growth? Can we offset some of this? And the second big question is also as the demand is growing, is clean energy capacity growing at the same pace, Because in order for us to be successful, the clean energy capacity need to grow at least at the same speed.

Of energy efficiency and clean energy. So an energy efficiency.

Compared to three years ago, a Google data center is five times as efficient as it used to be. So we work on this both on the IT side of things. So our newest TPU Trillium six gener TPU is sixty seven percent more efficient than its previous generation. And when you look at the non IT load, when you look at the efficiency of the data centers, a typical Google data center is one point eight times more efficient than an enterprise data center on average.

So there's a lot of work that we're.

Doing on the energy efficiency side of things. That is an area of very deep focus for Google on the clean energy. So as you mentioned twenty four seven carbon free energy, so we aim to operate on twenty four seven carbon free energy. That means procuring carbon free energy every hour of the day in every grid where we operate globally, right.

And so.

In Asia Pacific, we have signed power purchase agreements in new markets in the last twelve months Australia, Japan, Singapore, and we continuously actively procure carbon free energy in all the markets where we operate where we have data centers or where we have cloud presence, and globally this has been a record year as well because it's a four gigabat of carbon free energy power purchase agreements and this is more than every year.

Before for Google.

So you know, keeping that clean energy capacity curve as deep as possible as the demand is also growing and becoming steeper.

Very good, Thank you. I'll go next to Kaveta And one of the problems that I think doesn't get spoken about quite as much is the fact that renewable projects in India, many of them tend to underperform. They don't generate as much energy as was initially thought of. Now, as an investor, how big of a problem do you think this is? And then what can be done to really achieve the returns for shareholders?

Yeah, thanks for that, r Hit.

So if I actually take a step back of is it that your underwriting has enough cushion built into it to be able to handle the on the ground operational nuances right? Very frequently, what you have found is that there may be one aspect which is underperforming. Maybe you know, the number of units which are generated than what is expected. On the other hand, your cost of delivery of project or speed of delivery of project has surprised you on

That way, we will come back to that topic of you know, wind solar hybrids and sort of combining technologies. But before that, on this question of technology, I want to go back to goodeg. You know, there is a renewed focus on the nuclear power sector in India and the Finance Minister also very clearly alluded to that in her budget speech.

So what is the.

Role that ntpiece could play in the nuclear sector in India?

Now, good thank you for that question.

I think I thought, okay, mostly gene people will be only solar and when and these days may be on the storage, but I think the nuclear is going to be a very important part. And I think for the last two years we had been working on this area and now we have a joint venture with NPCIL and in next month or so we will start finding it and it's news that we will we start work on our first nuclear power plant which is going to be four into seven hundred megavat.

This is in the joint venture as it is just mentioned.

And going forward, we are looking ahead for the SMR and the MMR and also we are looking at the large size nuclear power plants across the country. We are in dialogue with at least four to five states to

But otherwise, also I.

Think the nuclear seems to be taking the CTU and which will be able to provide the twenty four y seven carbon free genetic energy source. And let's include here that also that the hydrogen which is much talked about subject as of today and it's the fuel for future nuclear is going to play very important role in that also.

So we are quite focused on this so nuclear.

Large size or the SMRs going forward and carbon capture and utilization are going to become the integral part of the energy security to provide the energy needs pervent perfect.

Thank you, sir.

India has taken somewhat of a UNI path in its auctions of renewables, both in terms of volume but also now in terms of the innovation of first doing wind solar hybrids and now there are various types of complex projects, different combinations of wind solar storage with different supply terms to improve the generation profile of renewables, to get renewables closer to what eventually is needed. My question will be to omit you on this one. Now, a Dani Green

Yeah, look, I think if I step back, I think

But it's also true.

That our understanding of weather is not as good as

So we're also.

Developed developing and.

We plan to have five plus gigawadscale palm storage project.

We'll come back, We'll come back to palm storage.

Yeah, sir, so, I think that's our approach and we feel that we'll kind of secure our you know, brid as well.

If I can just follow up a little bit on this, you mentioned that our understanding of the weather over different time scales is not as good as it should be. Is there something specific you can tell us on how this sort of risk is being mitigated by the industry.

Yeah, I think.

Look, I think if you look at the density of weather stations we have and the frequency at which we measure these weather patterns in our country, especially project sites, noway close to what we need for doing a very high quality macrostrating as a as A as a company,

To work together.

We need to work together with the metro agencies in India and outside and make sure that we have a much more robust way of predicting gust movements, predicting wind changes in short term, long term, for grid balancing, for scheduling, and that's something which we are taking up as well with the authorities in India. But I would invite everybody to kind of participate in that.

So we need more data, but we also need all the stakeholders to work to ironically, got it. I'll continue with this topic of sort of hybrid and complex projects. These are sort of a very new development in the market or just the last few years. And now these projects combine technologies. They're often oversized projects. So how do investors assess the case for these projects?

What? What?

What are the things that you would look at if this project came to you, Yeah, I think it.

So.

First of all, it starts with what kind of project is it?

Right?

Is it a hybrid project?

It is it?

Is it RTC? Is it peak power load?

Following, you know, you have various parameters of project which then determine, you know, what is the solution that you are looking at, whether it's a combination of wind, solar, solar plus battery pumped hydro which is currently in short supply. But you know, so it's uh, it's a question of what combination of technology solutions would enable you to deliver that power. And the again, one of the other parameters is that how is that stable power being measured? Is

Now.

Fortunately, because this is still evolving, I think the competitive intensity in complex projects today is low, which enables you to look at pricing this in a sensible manner. But I think as the market understanding evolves, you know, your underwriting models will become better and then the pricing will also become fitter. But today I think it is more a question of trying to figure out how much is the risk, What is the return that I should expect to compensate for the risk.

So it is a learning process for everyone, but there are some fundamentals that you would still look at.

Yes, that's right, Georgio.

Just continuing along these lines, you know, to get to twenty four by seven. There are many different sort of routes or options available.

You have on.

Site projects, off site PPAs. There are various states which have utility green tariffs. There is a wreck market or green certificate market in India. Now in the India context, how do you view all the different options? How do you prioritize and choose?

Yeah?

Sure, so there are so many different options. The one criteria is impact, of course, So to make sure that you know what we do is is it adding incremental clean energy into the grid first of all?

And also you know, is it contributing to a systemic change?

Because there is no better way to run data centers on twenty four seven can of free energy? But what good does it make if it just ticks a box and it doesn't it doesn't result in a systemic shift? Right, So this is what we're trying to do collectively at Google and with many partners. We work with so on the different procurement options. So one thing that always comes up is like the these unbundled REGs, unbandled ecs. So just let me let me untack this for a mino

And so why did you do that?

Well, because the land is not available, right, We've talked about land constraints and permitting.

So solving for local.

Issues in specific markets is really the challenge that we need to face at the moment. I'll give you another example from Taiwan. We have recently announced capital investment in partnership with black Rock and here, well, there is not enough generation of carbon free energy, right, so we come in with a capital investment to actually support the development

But for us, really.

What works well is when we have multiple procurement avenues available. So we would like to have physical PVAs, but also virtual PPA is also CFD, also unbundled bundled RECs and behind the meter not metering off site, on site, you.

Know, everything that is possible.

And also I'm not I'm not just saying this for Google, but because you know, even tech companies among them have and even they are similar companies headquartered in the in the same country, right, but we have even among the tech companies different procurement rationale. We do what we do for different reasons in different ways. And so imagine if you take companies that are in sectors that.

Are very far away.

So how can one procurement methodology or avenue fulfill the needs of companies that are so different in their strategic approach to carbon free energy procurement. So yeah, as many options as possible.

So horses for courses, but you also want to be greedy and have everything available to pick from. Okay, I want to come back to something that was mentioned a couple of speakers, which was pumped hydro storage. Now, again, this is a technology where India has taken a different path to many countries.

It is it seems to be.

One long duration energy storage option which a lot of government entities and private players are looking at very seriously. So I want to ask Amiji this question. Now, Adani Green is working on these projects in multiple states at different stages. What are the one or two major challenges that you're encountering and then how are you moving ahead with your development plans?

Yeah?

I think Look, I think India is very well blessed with these kind of structures where we have a bit of a head and water bodies where which we can use for you know, pump storage where we can recycle water day and night. And I think if you look at some other countries like US where more than ninety percent of storage has been conventionally through pump storage, and I think in India we have a great opportunity to do that as we progress towards the renewable future. And

Thank you. I want to come back to Gurdig just carrying on one of the themes earlier in terms of corporate clean power procurement.

Now many.

Trends suggest that corporates purchasing clean energy is likely to be one very big growth segment for carbon free clean power in India. Does NTPLC plan to target this segment? What sort of strategy would NTPC have for corporate corporate buyers of clean power?

Yeah, if you're if you just follow us.

We have been working on this area also for quite some time and we have the joint ventures which.

We have already gene started working on like with.

Ioc L, with the HPC, SPCL and metal energies. There are many more Gina kinds of this which are bulk consumer in fact, not only the smaller consumers, but the bull consumers, and we are quite open to have let's say, the joint ventures with them or otherwise we are more than happy to commit to supply them the powers for their requirement. We have much larger portfolio. It's not only the solar and wind, but it's all some portion of the hydro and then the storage solution what we are

In many ways.

Managing the grid is going to become quite a challenge. As we are we are adding more and more unpredictable or the kind of train is this we generate when we want that kind of power?

I think this is aldgene.

We are at that point of time that at times our cold base assets which are taking the total burden as of now of flexing, and I think there will be limit when these assets will not be able to support the grid.

So there will be time when this renewable energy.

Will have to be scheduled, so f d R is one thing from disposable r E. But I think that power is yet to come to the great I think that's that's the one one more challenge which is going to emmerse. So all in all, what we are working is that the total spectrum was as you would have noticed, and I think you your your question itself about the nuclear So we are in the old form of the power generation and we.

Are working that.

As for the requirement of the consumer, how we can we can provide the energy requirements, as for their schedule, as for their requirement wherever they want. And there may be a point I think this is This is another important and the frond from Google here. I think this is going to be that for the hydrogen. I think the Western world is trying to put some conditions where they are saying that it should be within the pure the renewable energy and it should not be mixing up

But let me assure you this house here that if there.

Is any industry which requires whether it is totally green, which is totally carbon free or low carbon energy, I think we can work out those solutions, and maybe I think graded manner that can.

Also be also be worked out on those.

So it's going to be a quiet, an interesting and challenging future ahead for all of us.

You mentioned scheduling of renewables, and we had just heard amid you talk about the importance and the role of weather forecasting and improving That sort of goes hand in hand. When you have one, you can really work better on the other one.

Now the question is I think there is another one.

Maybe there will be some time when the renewable energy may.

Have to be curtailed.

Yes, for the security of the grid, so we have we have to keep that in mind. Yeah, we cannot just make any kind of this is whenever you want you can come in and whenever you want you can go out. I think this is so that may be then requiring some kind of course for these storage purposes.

But that's also.

I think this is going to become an interesting phenomenon.

It's going forward.

That's exactly where, precisely where I think large scale storage is skill storage, and the grid support system has to become more resilient. I think a lot more focus needs to go towards storage, I think, and that will be the only solution we can think of.

And talking back on.

Weather, I think I think we need to do a better job in understanding weather.

We have a big country.

If you look at from east to west, you benefit from one plus hour verse of solar radiation if you have a plant which talks to each other. So I think we are yet to take advantage of that. Then renowble life feel and I know I talk on behalf. Everybody in the room has a long way to go, I think, and it's a big upside ahead of us.

Thanks for listening now. This was recorded live, so keep an eye out for more recordings from future summits, the next one being our BNF Summit London, which will take place on the eighth and ninth of October. Today's episode of Switched On was produced by Cam Gray with production assistants from Kamalas Shelling. Bloomberg NIF is a service provided