Renewables: The Green Corridor To A Sustainable Future
Glaciers are melting in the Arctic region, winter ice is receding in Antarctica, cold countries are now experiencing extended and more sweltering summers, coastlines are changing due to devastating tsunamis, wildfires are raging on in Amazon rainforests (known as the lungs of the planet), Australia, Greece and other parts of Europe, the El Nino effect raising the temperature of the sea surface to above average (warming of the ocean surface in the central and eastern tropical Pacific Ocean), volcanic eruptions, cyclones, typhoons and hurricanes are wreaking havoc on specific geographical locations, and of course, the greenhouse gas emissions are adding to the global warming menace — all these are the tell-tale signs of climate change, leaving creases on the foreheads of climate activists and environments. Worldwide, corporates are chipping in funds and formulating plans into effective actions to do their bit. The India Inc. is also not lagging behind.
By commendably reaching a consensus on the New Delhi Leaders’ Declaration amongst a galaxy of leading world leaders and statesmen, India emerged as a strong voice of the Global South when it proposed the ‘One Earth, One Family, One Future’ agenda at the just-concluded G20 presidency in the capital under the ruling regime. Renewables remained a core subject on the ‘inclusive and diverse’ dais. It surfaced as a vital topic in focus to expedite joint climate actions. Green finance is therefore imperative to lend an impetus to sustainable progress and advance towards setting clean environmental goals.
Renewable Resurgence Via CSR
As part of corporate social responsibility, it is broadly thought and promulgated that a certain percentage of investment all companies should make in renewable projects or green initiatives. “Well, in the area of CSR, there isn't a standard one-size-fits-all approach to follow. However, considering the current climate exigencies, we’d suggest corporates to earmark around 20% of their CSR programmes toward sustainable projects. The exact figure can vary but the essence lies in recognizing the importance of eco-friendly contributions to society,” observes Sandiip Bhammer, founder and co-managing partner, Green Frontier Capital.
Many oppose the idea of blocking capital and outsourcing the responsibility to a third party or an NGO as this comfortably eliminates the concerned company’s accountability. “At the end of the day, the outcome is more important than the amount pumped in. We should have clear targets in place like reducing carbon emissions, conducting consistent carbon audits, replacing tube lights with LEDs etc. This would be a more effective option,” suggests Priya Prakash, co-founder and managing director of Eco Pallet, the company that pioneered India’s only sustainable pallet to curb the threat of deforestation. Its innovation uses post-consumer recycled wood to ensure that not a single tree is felled.
Saurabh Kumar, the vice-president at GEAPP (Global Energy Alliance for People and Planet), India, opines that “any organization in the climate space should have a reasonable budget reserved for RE (renewable energy) projects. Responsible investment and activities should be given enough priority based on the budget. It should be mainstreamed into the DNA of the company in question”.
Clarion Call for Climate Action
India seems to take centre stage in climate action in terms of the Global Biofuels Alliance and International Solar Alliance. With India's presidency at the G20 Summit, what key takeaways did the corporate heads expect from the event in terms of multilateral economic development in collaborative eco-friendly endeavours? “With India taking proactive strides in arenas like the Global Biofuels Alliance, we are hopeful that under its G20 leadership (presidency to expire on Nov 30, 2023), there will be a strong inclination towards projects that foster both economic growth and environmental sustainability. There’s a positive vibe all around. I’m confident that India is poised to inspire and drive global eco-centric commitments,” Bhammer sounds optimistic.
Green crusaders admit that the G20 platform creates an opportunity for India to lead the charge on international frontiers regarding key concerns like climate change, inclusive growth, innovation and forest preservation.
“On climate change, India can coordinate with fellow G20 countries to set specific targets for lowering greenhouse gas emissions. For inclusive growth, the country can propose policies that promote job creation, education and healthcare for everyone,” shares the Eco Pallet entrepreneur. “Another very important aspect that needs to be discussed on a global scale is forest conservation. At the end of the day, the soil degradation that results from the cutting down of trees limits our ability to replace the same, even with ardent reforestation efforts. The only solution is to switch to processes and products that check deforestation, recycle wood and enable a circular economy for all materials derived from trees. This will also boost the preservation of biodiversity,” she further deduces.
Market Outlook
Hydroelectricity, solar power, wind energy, geothermal resources, tidal waves, biomass etc. are the chief renewable sources of energy used as fuel or as agents of power generation. It is interesting to gauge the market size of conglomerates (both in India and across the globe) dealing in renewable power plants or projects. “The renewables energy sector in India is visibly burgeoning but to pinpoint an exact market size would require in-depth analytics. However, it is clearly evident that as India ramps up its green goals, it is steadily turning into a magnet for sustainable investments. Globally, the transition to renewables is fast-paced, reflecting a shift in paradigm from conventional to green energy,” infers Bhammer.
At the very outset, it is essential for individuals and companies to understand exactly how these renewable sources of energy work. Currently, India ranks fourth with respect to the amount of wind energy generated this year. “However, certain forms of energy like geothermal energy are much less known. Biomass, for instance, can very easily be utilized in the house or at a farm level. Education on these forms of energy is a key starting point,” feels the Eco Pallet spokesperson.
Studies reveal that the renewable energy domain in India touched US$ 20 billion in 2022. Going forward, the IMARC Group expects the market to reach US$ 35.6 billion by 2028, witnessing a CAGR of 10.19 per cent during the 2023-2028 forecast period. Globally, the renewable energy market size was estimated at US$ 1030.95 billion last year and is anticipated to hit above US$ 1,998.03 billion by 2030, seeing a CAGR of 8.6 per cent from 2022 to 2030. The hydroelectric power segment is experiencing a CAGR of 6.6 per cent during the said prediction period.
Presenting statistical evidence, Kumar informs that as of April 30, 2023, India stood as the third-largest producer and consumer of electricity globally, boasting an impressive installed power capacity of 416.59 GW (gigawatt). “Notably, the power sector also attracted significant foreign direct investment (FDI), with total FDI inflows soaring to US$ 16.57 billion between April 2000 and December 2022,” he confirms.
According to the latest findings from IRENA's World Energy Transitions Outlook 2023, there was an unprecedented surge in investments in energy transition technologies, including energy efficiency, with the global total shooting up to USD 1.3 trillion in 2022. Notably, in 2021, India emerged as a prominent player on the renewable energy investment landscape, both domestically and on the global plane. India attracted bulk investments (US$18.8 billion) in renewable energy, marking a threefold jump from the figures reported in 2020. The following year fetched sizeable and high-value investments in renewable energy projects, with major private Indian corporations aiding this outstanding spike.
Green Initiatives
From awareness campaigns on saving depleting energy sources to installing solar panels and increasing green cover, planting trees, growing rooftop and vertical gardens due to lack of space, building bio toilets, creating eco-friendly zones in and around offices with a biophilic touch....the corporate bodies can make a world of difference to the renewable route with their significant contributions. Can this drive a company to lead by example in its league? “The ripple effect of corporate sustainability measures is undeniable. Whether through the embrace of urban green spaces or waste-to-wealth innovations, companies wield immense power. I accept the point that these initiatives not only signal a corporate house's eco-assurance but can also inspire its peers, making a larger industry-wide impact,” comments Bhammer.
Of late, there have been a lot of discourses on carbon offsets and credits. While companies may be delegating the principal responsibility to their partners or third-party vendors, they need to do a reality check themselves to fathom whether they are at all engaging well enough in carbon neutrality. “Simply switching the lights off at night does not equate to carbon offsetting. Sustainability is not just about what you do, it’s about how you do it. If an organization resorts to corrupt practices to procure sustainable pallets at an unreasonable price, it isn’t really helping the cause of sustainability. On the flip side, if a large company is able to discourage its employees from using private cars by providing office buses, then it is for sure. Even if it is true that such a step is only feasible for the big corporates, small companies can also pitch in,” volunteers a voice from a company’s executive leadership.
Another thing that companies can do is lend support to local businesses. “If they’re buying food, they could buy it from somebody who's cooking it in their house or from a local vendor,” chips in a financial expert.
India in Focus
With the US President Joe Biden having participated at the G20 Summit in India alongside other world leaders, it was crucial for the latter country as it consolidated its bilateral relations with the former (especially from PM Modi's last visit to the country). How significant did the diplomats and climate watchers think the Modi-Biden meeting at the global event would be and do they expect more positive outcomes in the Indo-US ties from the series of summits, including carbon footprint issues? “Such high-profile conferences and confabulations between the two heads of state not only reinforce the bilateral alliances but also lay the groundwork for future collaborations in the field of sustainable development. The two countries could synergize and work together to develop technologies that may enable us to harness clean energy,” expounds an exponent from the renewable-energy industry.
For those not in the loop, India and the United States jointly initiated an investment fund with a substantial allocation of up to $1 billion. This is specifically designed to bolster the endeavours of the former in expediting its energy transition journey by leveraging cutting-edge green technologies. The primary objectives of this fund constitute reining in capital costs and accelerating innovative greenfield projects in renewable energy, battery storage and emerging green technologies within India. The fund is established to serve in exigencies as a readily available resource. It should act as a catalyst for affordable financing and provide a fillip to advance the projects.
“Under the auspices of this programme, the energy sector stands to receive a substantial capital infusion. It will take a pioneering role in conducting experiments and tests involving innovative technologies, while simultaneously prioritizing essential training and skill development programs. These facets are integral to making the transition more people-centric, ultimately inching close to a net-zero world,” claims Kumar.
COP and G20: Two Sides of the Same Coin
Although G20 is a different podium from The Paris Agreement {legally-binding international treaty on climate change adopted by 196 parties at UNFCCC (United Nations Framework Convention on Climate Change) or COP21 in 2015} and focuses more on economic development and implementation of new-age technology, yet galvanizing authorities into taking green initiatives is part and parcel of G20 for cruising towards a brighter future of the planet. Were conversations on renewable energy a substantial component of this summit for shifting gears to a carbon-free world? “Economic dialogues on the G20 platform can never be insulated from the subject of environment. In light of the ground realities looming on our global environment, it's only natural to thread in discussions on sustainable growth, making green energy and carbon-neutral strategies an intrinsic part of the talks,” rationalizes Bhammer.
Indian businesses had been pushing for policies conducive to a just and clean energy transition. “The outcomes of the G20 Summit actually set the stage for the upcoming COP28 conference in the UAE, complementing each other’s roles,” avers Kumar.
Water Woes
Though three quarters of the earth are filled with water, clean and drinkable water is getting scarce by the day due to contamination and sporadic rainfall distribution, resulting in arid lands, evaporation of water bodies and consequently, droughts. Can remedial measures be taken to improve such conditions? “It is indeed sad but true that only a small fraction of water covering the planet’s entire surface is clean and drinkable. This precious resource is becoming increasingly scanty due to the worsening effects of climate change, which exacerbate groundwater depletion and induce both flash floods and droughts. These factors further deteriorate water quality and accessibility,” rues Swapnil Shrivastav, co-founder of Uravu Labs, a Bangalore-based deep-tech startup creating sustainable water out of air. It is on a mission to build sustainable water solutions for the climate adaptation era.
Addressing this challenge requires a comprehensive and systemic approach, he thinks. “Climate activists and environmentalists cannot rely on singular solutions to assuage this critical issue. Instead, they must adopt a holistic approach tailored to the unique problems faced by each region. Solutions should apply a wide spectrum of strategies, ranging anywhere from wastewater treatment, rainwater harvesting to other water solutions. This also means working with different stakeholders like urban bodies, municipalities, corporates and government agencies to implement many of these solutions on a larger scale to salvage the crisis. The ecologists have to actually become more of an aggregator of solutions to beget fruitful changes,” he offers.
Cost Containment
Every undertaking requires a certain amount of investment. Given the heavy capex involved, the target customers have to cough up a lot of money to avail of the service. But considering that the poor sections of society cannot afford such high expenses and should ideally be provided water for free, what efforts then one ought to make to reach out to the needy to make the bare necessities (as vital as the life-saving water) of life easily accessible to them?
“Given the initial substantial capital expenditure required for this venture, the idea will be to establish affiliations with government agencies, CSR foundations and international organizations. These partners can provide the major chunk of the initial capital investment. Once the expenditure is covered, the operational costs will dwindle automatically to a great degree. At this point, a pay-per-use model can be enforced, allowing the underserved segments of society to access water at a nominal cost (less than 10 paise per liter). This negligible fee will be used mainly to cover the maintenance charges of the manufacturing machine. Such a ploy will permit us to construct a sustainable model that ensures essential water resources are at the disposal of the needy,” recommends Shrivastav.
Rainmakers to Fetch Green Gains
Investment in renewable projects is not just about reaping a fat ROI but also investing responsibly and ethically to envisage a healthier, brighter, carbon-free environment. Accepting this maxim, Ishan Chaturvedi, director and co-founder of Vareyn Solar (the company that serves the need for quality solar energy plant installations across the country), believes that “focusing on green development, achieving net zero and adopting renewable energy is the only way forward to a healthier future. Energy is at the core of development, civilization and survival, and renewable energy is an efficacious solution to the perils of climate change.”
A significant portion of the greenhouse gases affecting our planet is emitted via energy production. The burning of fossil fuels to generate electricity and heat contributes heavily to global warming. Accounting for more than 75% of global greenhouse gas emissions and 90% of carbon monoxide emissions, fossil fuels such as coal, oil, petroleum and natural gas should be forbidden from mass-scale use. “Therefore, investment in renewable projects is the key to a safer future. The excessive reliance on energy needs to swing to alternative sources that are renewable, sustainable, clean and affordable. Renewable energy sources like the wind, water and sun are abundant in nature and replenished by the earth. Green projects can help us achieve net zero by 2030 and ensure that we leave behind a nurturing, pure and fresh environment for our progeny,” espouses Chaturvedi.
Be a Sherpa to Summit Mountains of Climate Challenges
Eminent global leaders and statesmen like Joe Biden, Rishi Sunak, Emmanuel Macron and others recently visited India to grace the G20 Summit. When quizzed how does he think these summits will be significant in terms of framing a future roadmap for renewable projects and vowing for joint climate activities, to that, Chaturvedi answers: “The summit can touch upon the three thrust areas of adopting renewables. It may encourage international collaboration in advancing and implementing alternative fuel solutions. Investments in developing biofuels, green hydrogen and cutting-edge energy-storage technologies are pivotal to decarbonize high-emission sectors and the summit can chart out a course for the same.”
Moreover, the G20 forum can map out a path for energy policies that spotlight the advancement of cleaner energy alternatives. Over the past five years, global private investment in renewable energy has consistently surpassed the same in conventional energy sources. Nevertheless, it is essential to further scale up these investments to achieve global sustainability objectives. “India, for instance, already set a steep target of realizing 50% of its energy capacity from renewables by 2030. Equally significant is the matter of climate financing to inject capital into clean energy programmes, globally,” declares Chaturvedi.
