… to meet India’s future energy needs
Prior to the World Economic Forum’s Meeting of New Champions in Tianjin later this month, Swiss Style spoke to Vineet Mittal, Co-founder & Managing Director of Welspun Energy, who will be in attendance – and is a truly global business leader.
Betting on sustainability
Vineet Mittal’s work has always been determined by one motive: to change the social fabric of India. This serial entrepreneur’s choices have made him stand out amongst his peers, and his efforts as well as talents are widely recognized. In 2009, the 33-year old Mittal was named “Entrepreneur of the Year” at the prestigious Madhavrao Scindia Awards. An Alumnus of Harvard Business School, Vineet story is one of great courage and conviction. From setting up the Internet itself in India to pioneering dot-coms, Vineet became an early mover in the BPO space and ran one of India’s largest BPOs before they became the buzzword.
Today, he’s at the helm of Welspun Energy, the energy arm of the Welspun Group. As Co-founder & Managing Director, he has put together an ambitious plan of setting up large thermal and solar power projects all across India.
“Our prime area of focus is renewable energy,” he says, “especially solar, but we have dedicated teams exploring opportunities in other fields. We intend to be among the top five independent solar energy producers in India in the next two to three years. One of our missions is to find innovative new methods to make solar energy truly profitable.”
A big appetite
By 2030, India is likely to have a GDP of $4 trillion and a population of 1.5 billion. Considering that 80% of the India of 2030 is yet to be built, India has a unique opportunity to pursue development while managing emissions growth and creating a large clean energy industry.
Demand for power is likely to increase more than 5 times, from 700 TWh in 2005 to 3870 TWh by 2030. As per-capita income rises in India and the population’s growing affluence leads to higher energy consumption, Welspun is on a mission to power a green India. “We’re going to help India meet her growing energy requirements in an efficient, environmentally-friendly manner. In the next six years, we will become a fully-integrated power company, and set up thermal, and solar power plants to help meet our goal,” says the ambitious Mittal.
Fifty per cent of India’s population is not connected to the power grid. “Solar and wind energy are ideal energy sources in the countryside far from the urban centres, where the deficit is most acute,” Mittal comments. “By employing new technologies we make a considerable socioeconomic impact and provide services to the people who are not so privileged. When you bring electricity into a town or a village, you immediately change its economic profile.”
He adds that, “Even in cities and towns, people still rely on diesel generators for power. India has a huge power deficit with supply trailing demand by 8-10%, and data indicating that it will stay like this for at least the next ten years. Yet if India keeps growing at its current pace of 9%, this could take even longer.”
A great privatization process within India’s power sector began in 2003. This has been accompanied by reduced political intervention as well as a drive to deregulate and move towards more transparency. In Mittal’s opinion, “Together with the GDP growth, increased per capita income, urbanization and rapid industrialization, these changes will be the main drivers of increased demand for energy.”
The coming convergence
Trying to meet India’s growing demand for power is going to call for some radical shifts in energy production. The big question is: how can these needs be met while still proceeding in a sustainable and environmentally friendly fashion?
Mittal has coined the “3 Es’ paradigm – energy, environment and economic development have to be kept in mind and the need of the hour is to balance these three “Es”. He sincerely hopes that the emerging countries take the road less travelled as compared to the developed countries in their periods of growth, like the US in the ’60s –’70s and China in the ’90s.
The growth in emerging countries will be exponential and this growth needs to be in a sustainable fashion, or else the impact on the environment would be irrevocably dangerous. Companies capable of striking a balance between economic growth, energy requirements and sustainability will be at the forefront of the energy industry in the coming decade.
“Our company’s goal is to reach grid parity at the Indian level, to generate renewable energy at the price it costs to generate coal-based thermal energy, a crucial source of energy in India. Two things will happen in the energy industry in the years to come that will help us in our endeavour: The costs of traditional energy sources such as coal, oil and gas will go up as governments impose carbon taxes and face international pressure to reduce emissions and switch to cleaner sources of energy; and developments, innovations and government incentives in the field of solar, geothermal and wind energy will bring the costs of renewable energy down while driving its growth.
“With the time, money and focused effort of the global community going into alternative energy, I am very optimistic and think we will witness great breakthroughs in the near future”, he explains. “In my opinion, the price levels of traditional and solar energy will converge by 2020.”
In this process Mittal attaches much importance to smart grids with the capability of integrating renewable electricity. “Smart grids are the paths to the future. By allowing us to rely on renewable energy when conditions are favourable, yet switching back to traditional sources when necessary, they are essential in diversifying into clean energy sources.”
The dawn of a new era?
India’s appetite for energy can only grow and China has become the world’s largest electricity consumer. As Mittal puts it, “India, China and other Asian countries will continue to witness strong economic growth, which of course has a direct effect on their energy consumption.”
What role these changes will play in shaping the international energy landscape has yet to be defined. Is the era of the energy giants over? Vineet Mittal does not believe so. “I do, however, believe that specialized companies from the developing world will begin acquiring assets from these giants. In the process, large companies originating in Asia will start playing a bigger role on the global scene. The meeting in Tianjin is an ideal platform to share information with our peers in the energy industry across the globe, especially in Asia.”
Article by David Sidler