Profile: Akhil Gupta is Senior Managing Director at The Blackstone Group and Chairman of Blackstone India. He previously served as CEO-Corporate Development for Reliance Industries (RIL), focusing on developing RIL’s oil & gas, refining, and telecom businesses. He began his career at Hindustan Lever.
The biggest freedom a country can wish for is freedom from external overdependence. With our humongous current account deficit (CAD), which forces us to depend on volatile capital flows to finance our import bills, the rupee has taken a beating, falling 14 percent in a matter of weeks. But a bad CAD affects more than just the value of the rupee; it imports inflation, weakens government finances by raising subsidies, deters foreign investment and prevents the Reserve Bank from lowering interest rates. Basically, a high CAD sucks the economy into a vicious cycle of high inflation and low growth.
The biggest culprit here is energy imports. Consequently, a solution that kills many birds with one stone is for the government to go big on solar power in partnership with the private sector. The government’s role should be to:
The time is ripe for solar power since the prices of equipment (solar panels) have reduced by over 50 percent in the last three years, driving down the cost of solar generation to as low as Rs 8/KWH. India is in a unique position to capitalise on these falling costs. First, most parts of India have very high solar irradiance, with the majority of cities receiving insolation of 2,000–2,500 KWH/sqm/year compared to 1,000–1,500 KWH/sqm/year in European cities. Thus, a 1 MW solar plant generates 72 percent higher energy—1.75 million KWH/year in India versus 1.02 million KWH/year in Germany.
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(This story appears in the 23 August, 2013 issue of Forbes India. To visit our Archives, click here.)
Excellent article. Yes. Renewables will change the economy of our country. Dr.A.Jagadeesh Nellore(AP),Indiaon Feb 24, 2014
Actually Piyush, the electricity demand growth comes from economic growth. Though you are right about controlling abuse, one must understand that our appetite for consumption cannot go negative. And consumption of anything drives consumption of power. Now imagine the scenario where power is FREE and relook at the problem. Suddenly a lot of things iron out. However I am of the opinion that demand will come more not from individual households but from captive solar use from Commercial and Industrial consumers of power who must value it the most and who stand to loose the most from hikes or even fluctuations in power price. This is also because they bear the brunt of the subsidies available to household consumers. But plainly speaking just look at solar energy. It makes total business, economic and logical sense. Even when viewed from a long term business planning and business budgeting perspective an inflation proof solution that lowers and standardizes cost is a god sent. I wish to refer you to a beautiful article that explains in more details www.sunipod.com/blog/solar-pv-solution-to-growing-electricity-demandon Feb 20, 2014
Why must electricity demand keep growing year over year? Where is the 7 % growth goal coming from? Instead of talking about reducing consumption and stopping population growth, there is always talk about more and more growth. People even say \"sustainable growth\" these days but this phrase is an oxymoron. It is an obvious truth that nothing can keep growing on a finite planet and growth is causing many problems also that are not well accounted. Please see the video lecture called \"arithmetic, population and energy\" on you tube. Also, solar is not yet sustainable, the cost of solar panels has been brought down by China by liquidating its environment by burning huge amounts of coal, besides there is a very complex supply chain powered by fossil fuels behind this. It would be much wiser to reduce energy demand first and then build using renewables to the lower energy demand and also bring population to sustainable levels, else the problem will never get solved. We need to end the religion of endless economic growth on a finite planet, it is totally unscientific.on Dec 3, 2013
Hi Piyush, There is a response to your earlier comment on this article by Siddharth. Do check his comment please on the article page.on Feb 21, 2014
I have simple ideas to begin with. Solar (CSP and PV), Wind, Geo-Thermal, Bio-gas, Biomass, Bio-fuel, ethanol, OTEC, Microbial Hydrogen, etc, etc everything is good. The government, utilities, power generators and consumers think of abundance of energy. They produce energy supported by subsidy on capital equipment, fuel subsidy, etc First try to close the transmission, secondly try to bring usage efficiency, third have appliances and equipments which consumer less energy, fourth make aware the actual cost of providing energy to all category of consumers, fifth phase out the subsidy while making investment in renewable energy. Ask people to use bicycle on monday, walk on tuesday, share vehicle on wednesday, take a bus on thursday, take their own vehicle on friday.on Nov 22, 2013
I beg to differ with Akhil that solar PV plants are a perfect solution in the sense that the solution is prohibitively expensive. ($20million/MW). In my opinion part solution lies in reducing electricity consumption by way of demand contraction. In a country which buys 1000 million pcs of incandescent and CFL bulbs and tubes per year it makes sense to adopt LED lamps when 18-20% demand for electricity is for lighting. 5W LED bulbs are =40 W ILS.on Nov 22, 2013
Using disruptive techniques it is now fundamentally , technically and economically viable to produceon Nov 22, 2013
India needs to spent at least 1% of its monthly oil import amount towards solar power generation and this will effectively start reducing oil import bill from 24th month onward. Govt of India must direct major oil / petroleum importing companies to sponsor various solar power projects by providing easy finance to various solar power generation companies, which should be collected back from the proceed obtained by selling electricity generated from these plants. If this scheme implemented honestly and regularly for 10 years, than India will reduce its oil dependence as well as reduce CAD too significantly.on Sep 19, 2013
Yes, these are the out of box solutions that work and address huge problem of CAD and add to productivity. PM and FM should consider these suggestions. India can show the world it\'s true potential. Read more: http://forbesindia.com/article/independence-special-2013/akhil-gupta-let-the-sun-free-india-from-a-cad-crisis/35909/1#ixzz2etZ6o5FGon Sep 15, 2013
If this is all true, then why are their no UMPP projects on solar by any government organisation. we have so many UMPP of 4000 MW to 30,000 MW coal fired or gas fired being executed today by private company. These proejcts are stuck in for fuel linkages. if the story was true they would have moved to solar by now. This is a distant future dreamon Aug 31, 2013
Great article, very informative. Congratulations.on Aug 23, 2013
I am completely concur with the opinion expressed by Akhil. We can attract more investment in solar sector by resolving two major issues: Payment security from SEBs (news is that even GUVNL is making default) and by providing instant access to finance once developer signs PPAs. Various states have terminated PPAs due to inability of developers to start construction activities at production sites.on Aug 22, 2013
SURYA DEVAYA NAMAHA. Very well voiced article, anything renewable will takes us towards sustainability. Technology and technologists exist , Govt will and policy is missing. We need to act and emerge instead of being under economic pressures.on Aug 22, 2013
Excellent Article. Investments not only in Solar but in Other Renewables especially established wind power are the need of the hour to supplement conventional Power. Dr.A.Jagadeesh Nellore(AP),Indiaon Aug 21, 2013
Akhil has hit the nail on the head .The Energy scenario in India is already frightening.We are an energy starved country with approx 100 million households who do not have access to grid electricity. Demand for electricity is likely to grow 400% by year 2032. Power generation capacity must increase from 1,60,000 MW to 8,00,000MW to meet this demand.640(1000MW) power plants will be required to be set up to meet this demand. 40%of electricity generation will rely on coal, a fossil fuel.18-20% demand for electricity is for lighting.In a country which buys 1000 million pcs of incandescenton Aug 21, 2013
New LED lights consume far less power than GLS and CFL, rather constructing new power plants, just replace the bulbs, quick and easy. 7W LED light gives out lumen equivalent of 60W GLS and 13W CFL. Going by your calculation of 18% only for lighting we will require only 9% or even less. Take back the old bulbs and tubes for proper recycling.on Nov 22, 2013
Yes, these are the out of box solutions that work and address huge problem of CAD and add to productivity. PM and FM should consider these suggestions. India can show the world it\'s true potential.on Aug 21, 2013