Digitalization and the energy transition
By Sashi Mukundan, Regional President and Head of Country, bp India
It was a recent conversational trifecta: three different conversations and shared dreams of growth. There’s Uber driver Navneet, with an ever-growing fleet of cars and dreams of a real-estate empire; store-owner Umesh, whose small store repairs and restores mobile phones well into the evening hours; and small-business owner Lakshmi, who irons clothes within her local community and dreams of employing more women in a bigger shop with delivery service. It led me to reflect on the aspirations of India’s ever-burgeoning entrepreneurs; access to reliable, affordable, and sustainable sources of energy in the form of heat, light and mobility that would fuel those dreams is a fundamental right of each of these citizens and indeed, of their communities.
It is encouraging to watch the drive and passion among these entrepreneurs; their ambition is helping foster demands for more energy, demands that are also driven by increasing population numbers and a fast-developing economy. India’s share of the global primary energy demand is set to double to ~11% by 2040. In other words, the nation is projected to account for more than a quarter of the global primary energy demand growth out to 2040 and is expected to overtake China as the largest growth market for energy by the mid-2020s.
Meeting the demands and attendant expectations of entrepreneurs like Navneet requires government and energy majors to find the right balance between those energy needs, with fewer and ultimately no emissions. It is a dual challenge and one best addressed by integrating oil and gas with renewables and improving efficiency through digitalization. This provides an uninterrupted supply of energy solutions, all of which work together to enable the transition to net zero in India.
The energy transition will necessarily mean a radically different experience for both industry and consumer. For example, in retail, it is not just selling petrol, CNG, LPG, and diesel, as is done today, but also providing new and innovative solutions for energy access. Indian consumers will have an array of options including mobile fuel dispensing units; packaged fuel delivered to their location; battery swaps for 2 and 3 wheelers at locations that offer the same efficiency as a fuelling station; and fast charges for their electric vehicles. With the addition of more solar installations, homes and businesses will be able to access solar power with far greater ease.
Maintaining a steady focus on the energy transition also means investing in ideas for the future, such as technology that converts biomass and municipal waste to bio-gas and liquid fuels. It means thinking well into the future by asking questions around optimization and efficiency. Surplus energy is a case in point. If someone owns an electric car, could they recharge it at times when costs are lower? Conversely, could they then sell the surplus energy back to the grid when the vehicle is not in use?
These ideas and this future vision are all underpinned by a very strong focus on digitalization; think of the industry itself as a platform enabling heat, light, and mobility solutions made available through multiple channels including innovative apps for the Indian consumer.
Digitalization is helping transform the energy system by increasing recovery of resources and reducing costs of supply. A combination of autonomous vehicles, ride-sharing, and intelligent traffic management systems is helping manage demand better in the light-duty vehicle sub-sector and manage smart freight management in the heavy commercial vehicle sub-sector.
In a similar vein, robotics and smart demand management are playing an important role in energy use in both commercial and residential buildings, with smart meters, a connected infrastructure, and other energy management systems in place. Smart grid technologies including micro- grids, virtual power plants, and demand response systems are already improving the transmission and distribution of energy.
These are times that energize us, and they also hold promise for entrepreneurs like the ones we met earlier. For Navneet, digitalization will help quickly fuel his fleet using mobile units. His CNG cars will be fueled faster and at more locations; he could be looking at savings for real estate investments. For Umesh, it means access to cleaner and more reliable, solar power, which helps keep his stores open longer, expanding his customer base. And for Lakshmi’s laundry services, digitalization means easy access to stations where she can quickly and easily swap out batteries on her two-wheeler. Their aspirations are helping shape the future.
The views expressed here are personal and those of the author.