Forbes India 15th Anniversary Special

Why we need to fixate on clean energy

Kanika Chawla, director of Centre for Energy Finance at the Council on Energy, Environment and Water, says the shift makes for good economics

Rajiv Singh
Published: Aug 27, 2019 11:05:07 AM IST
Updated: Aug 27, 2019 03:57:36 PM IST

Why we need to fixate on clean energyKanika Chawla

Q. Have we got the timing right to make the transition to electric two-wheelers? 
The time is right, and we should accelerate rather than wait, watch and play catch-up. Infrastructure around charging gets a lot of attention. From an urban planning point of view, it is challenging and we need to rethink our cities. But from an actual deployment point of view, it’s not. If there is demand, along with cars and buses, battery swapping stations will come up. The way Uber delivers your food, they will deliver your battery too.    

Q. Is it easier said than done?
Fixation with clean energy or with mobility shift is good because it’s good economics. All transitions are messy and take time. A behavioural shift will not happen overnight. What is interesting, though, is to drive the narrative that this has benefits for you.

Q. What about financing for such products and the secondary market?
As a consumer, it is harder for me to get a loan for a rooftop solar system. That’s because there’s no secondary market for rooftop solar. I can get a loan to buy a two-wheeler because the bank can sell my bike or scooter. That’s why getting an auto loan is not a challenge.

Q. Andhra Pradesh is planning to rework green power pacts citing high tariffs.
What the state is trying to do is extremely problematic. The problem is not so much that it wants to reopen tenders. But what it does is that it gives a signal to investors that such kind of things can happen. The minute you do this, you are saying that this is not the most friendly market.

Q. Is it not a jolt for the renewable energy segment?
But that’s true for everything that comes under a state subject. You can renegotiate just about anything. You can cancel coal blocks. At that level, there is always uncertainty in doing business.

Regulations do change. In Andhra Pradesh, the bigger issue is that it signals that the renewables are not competitive, and that’s why they are renegotiating. This is incorrect. As a result, investor confidence will go down. And this is especially true for international investors.

Q. Are Indian players not as competitive as Chinese ones?
They’re not. That is why we have such little domestic manufacturing. In India, we have thrown them a life jacket, but we are not creating a conducive environment for manufacturing. China is providing a lot of infrastructure support such as subsidised electricity, interest rate subvention and highways to ferry material. You have value chain linkups. In India, that is not the case. 

China identified many of their strategic industries to be green growth industries. They thought about energy storage, then electric mobility, two wheelers, battery swapping and solar manufacturing.

So they were first manufacturing and providing to the world, and now they’re providing for their own market. We should learn from this when we start thinking about electric mobility.

(This story appears in the 13 September, 2019 issue of Forbes India. To visit our Archives, click here.)

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