The world is going through an epochal transition from fossil fuel, which has dominated the field for over 150 years, to renewable energy, but decision makers in India are in denial. While this attitude can sometimes be amusing, it is mostly worrying.
I realised, to my horror, how clueless people are after two recent interactions with the chairman and managing director of a coal and lignite company and the director-finance of a large refinery. Both companies happen to be government-owned. It became clear to me that India’s government sector — comprising government departments and public sector companies — has no clue about climate change and how it will affect us.
Clueless cases
I asked the CMD, due to retire in June, what he was doing to prepare his company for the long term — say, 20 years from now — when demand for coal will, at best, be marginal. He replied that he didn’t think coal would ever be marginalised. ‘Can renewable energy power the entire country? No way,’ he said.
I was shocked. We are today living in a world where coal companies’ survival is threatened and there isn’t enough demand for coal power. Though the reason for this is not entirely the growth of wind and solar power, renewable energy has played a big role in this downturn.
I asked the director of the oil refinery the same question — how is he preparing his company for a future where most cars and trucks will be battery-powered. He looked at me the way a father would look at a son who has turned in a terrible report card. With a what-an-idiot-this-man-is kind of look, he told me there was absolutely no way electric vehicles would dominate the roads. Why would anybody want to buy costlier vehicles? The only market for EVs, he said, would be that tiny slice comprising people who have “ do-do, teen-teen ” cars, and wouldn’t mind if one of them was an EV.
The coal-and-lignite CMD could not accept the possibility that wind and solar energy, aided by storage capabilities, and complemented by other forms of renewable energy such as ocean energy, could dislodge coal from its pedestal. Likewise, director-finance of the refinery refused to accept that one day, electric vehicles would be cheaper than petrol or diesel driven ones.
Harsh reality
Considering that large fossil fuel-based power producers have done precious little in terms of shifting from black and brown fuels to green, it is clear that Indian companies are failing to read the signs on the wall. Or, they seem to have mistaken the message for graffiti.
The reality is different, and the harbingers of this bleak situation are crying themselves hoarse in an attempt to create awareness and bring about a change.
Consider the following.
In 2016, the world spent 12 per cent less on energy — $1.7 trillion compared with $1.9 trillion in 2015. Investment in energy efficiency was up 9 per cent, and in electricity networks, 6 per cent. What fell? Companies spent a fourth less on finding oil and gas — they wouldn’t have done so if they had thought the demand for petrol and diesel vehicles would only go up, would they?
These numbers are from the International Energy Agency (IEA), which also says that the share of low carbon supply-side energy investments, including in electricity networks, grew by 6 percentage points between 2014 and 2016.
Renewable surge
But here is a more telling quote from the IEA report: “Investment in coal-fired plants fell sharply, with nearly 20 gigawatts (GW) less commissioned, reflecting concerns about local air pollution and the emergence of overcapacity in some markets, notably China, though investment remained elevated in India. The investment decisions taken in 2016, totalling a mere 40 GW globally, signal a more dramatic slowdown ahead for coal power investment once the current wave of construction comes to an end.”
Furthermore, total conventional energy (including hydro) capacity additions were 130 GW in 2016, which was almost matched by wind and solar energy with 125 GW. Very soon, wind and solar will move ahead. If you compare hydro and nuclear energy production with wind and solar, and make projections for other sources such as tidal and waste-to-heat, you will see renewables surging ahead.
The signs are clear. Yet, the government sector prefers to bury its head in the sand and pretend like nothing is happening. But the lesson for students is clear. If you join a public sector fossil fuel company, make sure you have a back-up job!