India set to replicate its IT sector success in solar energy
India is set to replicate its information technology (IT) sector success in solar energy. With every known business entity exploring its own agenda in the solar energy sector, the country is already at the starting point of an energy revolution.
All prominent Indian companies have either set up their wholly-owned solar energy subsidiaries or have gone in for joint ventures or have set up solar energy divisions within their existing operations. The predominant business model being pursued by them currently is of grid-tied project development.
However, as more avenues open up for captive and REC-driven solar power projects, business entities are seeing more value in getting ready for the next wave. (RECs are renewable energy certificates that have become tradable commodities on India’s different power exchanges.)
The private business sector is gearing up for solar energy even though there is an almost policy paralysis with the central government, while different state governments have slowed down or postponed their policy initiatives. Most companies have set up small teams, seeking to explore opportunities in off-grid, micro-grid and roof-top applications to serve the larger private consumer market.
These opportunities are small in terms of ticket-size, but are enabling all new entrants to test technologies, processes and their people. Gaining experience through pilot projects seems to be the underlying thought.
And, it is not only in the PV space that this below-the-surface activity is happening. Companies are also finding solar thermal, particularly heat and steam applications, to be exciting opportunities. Roof-top solar water heaters, one of the oldest availably solar solutions, are now increasingly becoming a USP for residential property developers to offer to their prospective customers. The property developers on their part are forming joint ventures with technologists to gain a share in a market that will surely see exponential growth in the years to come.
Among the predominant and already-known entrants are the Reliance business groups, Lanco Infratech, Moser-Baer, Tatas and BHEL. But, other corporate houses like that of automobile major Mahindra, finance major Welspun, finance major Kotak and the Birla group too have taken long bets on the solar energy sector.
International majors like First Solar, juwi, abakus Solar, Bosch Solar, DelSolar, EMMVEE and SCHOTT are also among those who have taken long bets on the Indian market. Some of such players, who are largely equipment manufacturers or suppliers in the other markets, are keen to even become project developers in a country whose over 30 per cent population is still without any grid-supplied power.
Dedicated and recently-promoted solar companies include Azure Power, Waaree, GreenBrilliance, Vikram Solar and Indosolar. A listing of other scores of newly established regional players would make one feel that the market is already over-crowded – all waiting for the solar energy wave to come in.
The above phenomenon largely reminds one of the early part of 1990s when almost all business entities in India stepped into the information technology (IT) , or more specifically software services, arena. The dotcom boom of the late 90s and parallel off shoring of various service jobs placed Indian’s IT sector among the world majors.
The current euphoria, however, is not without its own sets of challenges and risks. Lesser-than-expected business is visible in the number of marketing and sales CVs that have started getting shared through emails. These CVs are not only of those professionals who are wishing to enter the solar sector, but also of professionals who claim to have a minimum of couple years’ experience in India’s solar project development space.
Nevertheless, as awareness rises, as conventional power becomes costlier and as power shortage increases, the demand for solar power will rise. And, this day is certainly not far off.
Bhupesh Trivedi is the CEO of Mumbai-based solar energy consulting firm REECODE Energy Solutions, and can be reached at +91-9324246639 or [email protected]
Carbon dioxide removal revenues worth £2bn a year by 2030
Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission.
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.
The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.
The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture.
It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.
The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020.
Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.
The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.
While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.
Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.
Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse.
"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.
“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.”
The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets.
Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.
Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."
McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:
- Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
- Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
- Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
- Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
- The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere