13 Sep 2019 19:53 IST

Living through epochal times

The energy transition the world is undergoing will cleave history into ‘before’ and ‘after’ eras

The current epoch we are in is known as the Holocene Epoch, which is part of the longer Quaternary Period. The Holocene is the term used to describe the last 11,700 years of the Earth's history — the period after the end of the last major glacial epoch, or ‘ice age’. Since then, there have been small-scale climate shifts — notably the ‘Little Ice Age’, from around 1200 AD to 1700 AD.

Earlier this year, the Anthropocene Working Group proposed a new name, ‘Anthropocene’, for the epoch “dating from the commencement of significant human impact on Earth’s geology and ecosystems, including, but not limited to, anthropogenic climate change”. While this nomenclature is yet to become official, it is ample proof that we are living through epochal times. The transition that the world is undergoing is something that will cleave history into ‘before’ and ‘after’ parts. And nowhere is the transition more evident that in the energy sector.

Investing ethically

Here is a data point. Since 2010, globally, coal power plants worth 570,000 MW have been cancelled. Momentum picked up in the later years, and so you should expect to see more such cancellations in the coming years. Alongside, many government-owned investment funds, insurance companies and private equity funds have declared that they would not put their money into those industries that burn global-warming fossil fuels — in fact, they have said they would pull out any investments already made.

Renewable energy, which was a gentle zephyr a decade ago, is a gale today. Annual investments in renewable energy are consistently beating investments in fossil fuel industries. While the world is not doing enough to slow global warming down to manageable levels — and that is a big problem — there is considerable progress in the right direction.

It is against this backdrop that we analyse a recent sub-trend.

Big Oil’s green initiatives

It has come to light that the top oil companies of the world are set to make a record number of investments, not in their traditional oil business, but in renewables. Bloomberg New Energy Finance, which tracks such developments, has reported that in the first seven months this year, the oil biggies made 70 deals in the renewables and bio-fuels area, compared with 80 in the whole of 2018. This is partly due to the pressure from investors, who frown at fossil fuels and smile at renewables.

The most active of them has been Shell, which did better than its French rival, Total. Shell’s top man, Ben van Buerden, has tellingly said that renewables “are the only way to go”, and has pledged $2 billion every year for investments in clean technologies.

Oil companies are slowly ditching oil. Oil-rich countries are, very slowly, ditching oil. Saudi Arabia and the UAE are looking to grow their solar capacities in a big way. If this is the fate of oil, then imagine that of coal, a bigger culprit in harmful emissions.

Against this setting, what is happening in India? The signals are mixed. The glass is roughly half-full and how you look at it depends upon you.

India’s renewables scene

In the last four years — 2015-16, 2016-17, 2017-18 and 2018-19 — India’s renewable energy installed capacity more than doubled — from 38,959 MW to 80,633 MW, chiefly contributed by solar, which grew ten times from 3,744 MW to 30,070 MW in the same period. Respectable though the numbers are, the achievement falls far short of what is needed.

What are Indian fossil fuel companies doing? Look at, for instance, Coal India Ltd. Guess how much renewable energy capacity it has? Zero of wind and 2 MW of solar. If you ask them, they will tell you about their huge plans for the future, running into thousands of MW. But since we all know about the public sector’s way of doing things, we will have to take their plans with a pinch of salt. Suffice it to say that today they have nothing.

Other public sector fossil fuel companies are only slightly better. Oil major ONGC has 18 MW of solar and 153 MW of wind, making in all 171 MW of renewable energy capacity. Indian Oil Corporation “plans to have” 260 MW of wind by 2020. NLC India seems to have done a little better — its solar capacity has just crossed 1,000 MW (51 MW of wind), but it is better only in comparison with the terrible record of its peers, not in absolute terms.

These are the companies that will be driven out of business when push comes to shove, as it certainly will. These are the companies that ought to be feeling the initial heat of the oncoming blaze. But they don’t seem to be.

This is the right time for these entities to be developing cutting-edge technologies and gaining global leadership — a transition phase is an excellent time to leapfrog and jump ahead in the race.

Yes, these are epochal times and India ought to be making the epoch. There is a lot to be done. Perhaps the millennials of today can pick up the baton and run with it.

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