– By Arnab Roy
The world of energy is undergoing a rapid transformation that is surpassing all expectations. A combination of climate challenges, evolving technologies and focus on efficiency means that there is a mass and irreversible movement towards greener and cleaner sources of energy on one hand and demand management on the other. Talking about electricity alone, the demand could increase up to six times by 2050 while reaching an astounding 10,000TWh as more urban centers emerge, new industries come up, and renewable energy powers everything – from home to transportation.
In this dynamic landscape, business leaders are responsible for skillfully navigating the energy needs of their businesses while maintaining a fine balance between profitability and sustainable operations. India, with its rapidly growing economy and unique energy demand, is not immune to these challenges. Considering India̵s current position as the 5th largest economy, with a projected economic growth of four times by mid-century and six times by 2070, it becomes imperative to identify practical solutions that benefit all stakeholders and create a win-win situation. Also ReadWest switches off location for IT services in IndiaIndia’s Sahasra Semiconductor to start chip production from SeptemberBSNL’s April-June net loss narrows to Rs 1,470 croreHere’s why Ambani and Adani won’t step on each other’s toes
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India possesses the incredible potential to lead a momentous energy transition in the 21st century, a once unimaginable concept. India is also eyeing complete energy independence by 2047 and becoming a net-zero economy by 2070. A massive transformation is already underway as India builds a sizeable 500 GW renewable capacity by 2030, matches it with modern-day transmission lines, and looks to build storage atsale. It is also pushing the boundaries in emerging technologies like green hydrogen, green ammonia, and carbon capture and storage. At the same time, this integration is measured and steady, considering the nation is still hugely dependent on traditional fuels to power its growth. Given the nation’s rising stature as a global force, the world’s fifth-largest economy will significantly influence the way global energy challenges are looked at and dealt with. Difficult it may sound, but the realization of this ambitious endeavor is more achievable than otherwise believed, if businesses take the forefront in four key areas.
Monitor Energy Consumption
The first and most essential step in navigating the energy market is to closely monitor your business’s energy consumption. Regularly analyzing energy bills helps track usage patterns, identify inefficiencies, and reduce costs. This is particularly crucial for Indian businesses, given the country’s reliance on energy imors. Tailoring energy management plans to suit India’s distinct energy market challenges is essential for optimizing efficiency and reducing expenses. Monitoring, targeting, and reporting energy use to empower businesses to assess performance, identify trends, reduce waste, and set targets for energy efficiency and sustainability. These practices promote informed decision-making, cost reduction, and a contribution toward a greener and more sustainable future.
Embrace a Diversification Strategy
In today’s ever-changing energy market, diversification is the key to success. Businesses must identify new revenue streams to protect themselves from market fluctuations. According to the 2022 report titled “Fostering Effective Energy Transition” by the World Economic Forum, it was observed that among 34 countries with advanced economies, a substantial number of 11 countries depend on merely three trade partners for more than 70% of their fuel imports. However, the ltes report of 2023 reveals that India and Singapore have demonstrated exemplary dedication and progress in building energy equity, sustainability, and security. For India, this opens up an exciting opportunity in renewable energy. Businesses can contribute to sustainability but also ensure stable returns on investment while reducing environmental impact by investing in sources like solar, wind, and hydropower.
Implement Energy-Efficient Technologies
The International Energy Agency’s analysis highlights a remarkable potential for the global market of key mass-manufactured clean energy technologies. It indicates that by 2030 if countries worldwide fully implement their energy and climate commitments, this market could soar to a worth of approximately $650 billion annually. To remain competitive, businesses must embrace energy-efficient technologies. Proactively investing in such solutions leads to long-term cost savings. In India, where energy costs are significantly influencd byimports, adopting efficient lighting, HVAC systems, and energy storage and management solutions can significantly reduce energy consumption and expenses while enabling economic and environmental benefits.
Embrace Sustainability
In today’s economy, embracing sustainability is not just a choice; it is a necessity. Adopting a triple-bottom-line approach that considers economic, environmental, and social factors is vital. In India, with its energy challenges and commitment to mitigating climate change, sustainable practices are becoming increasingly important. In a bid to herald a positive shift towards sustainability, several companies are committing billions to renewables and a $500 million fund for clean energy solutions. This brings an incredible opportunity for businesses to reduce their carbon footprint, promote eco-friendly initiatives and contribute to India’s net-zero goals.
Successfully navigating the energy market in today’s fast-changing econoy demnds strategic planning and innovative approaches from business leaders. Navigating the energy market effectively requires proactive engagement with regulators. Businesses can anticipate changes that may affect their financial landscape by participating in policy discussions. This engagement is especially critical in countries like India with complex regulatory environments where businesses need to adapt swiftly to changing market dynamics. At this critical juncture, businesses have the opportunity to not only secure their profitability but also contribute to a greener and more sustainable future for India and the world. Adapting to the energy market’s challenges will ensure businesses’ resilience and play a pivotal role in shaping a cleaner and more sustainable global energy landscape.
(Arnab Roy is the Zone CFO – Greater India & CFO at Schneider Electric India Pvt Ltd.)
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