Eyes on the prize
By Sashi Mukundan
President, bp India and senior vice president, bp group
Ralph Waldo Emerson once said, “This time, like all times, is a very good one, if we know what to do with it.”. Amazing. That anyone could even think of the year 2020 as “good”. But it has been good for us in a bitter medicine kind of way. And we’re not just taking Ralph the poet and essayist at his word… we’ve seen it for ourselves.
Some months ago, we saw nilgais walking down empty Noida roads and a Malabar civet, a critically endangered animal in Kerala’s Kozhikode, strolling by an empty marketplace. Smog gave way to blue skies, pollution levels dropped, and of course, flamingoes returned to Mumbai!
Sounds wonderful, doesn’t it?
But that’s all changing now. As the lockdown eased and daily life chugged back into place, these beautiful signs have all but disappeared.
Coming back to that famous man of letters, Waldo Emerson (he preferred being called Waldo: at least that’s what people who knew him say). His caveat was that the time could be good if we know what to do with it.
What we need to do is act NOW.
But why?
Because the planet needs change, the science is clear on that – the world is not on a sustainable path. Because society wants change. Because people everywhere want energy that is cleaner as well as reliable and affordable.
Covid-19 presents an opportunity to kickstart a speedy transition to a low-carbon future. Though the immediate economic impact may slow us down somewhat, a green revolution in the energy sector is imperative.
No one knows the precise path – but the energy mix is changing – oil and gas are going to be increasingly challenged – and other forms of energy are going to see incredible growth.
For those of you who had an opportunity to see the Energy Outlook 2020 will see that predicted renewable energy growth is intense in India with an average growth per year in the range of 9% –13%. This outlook, however, assumes the introduction of policy measures, led by a significant increase in carbon prices, that result in carbon emissions from energy use falling by around 70% by 2050 from 2018 levels. As a result, renewable energy becomes the largest source of primary energy in 2050. Under a business as usual scenario, though, we still must contend with coal. All factors notwithstanding, it is clear that renewable energy represents between 22% and 69% of the total primary energy in 2050.
Those are some big numbers! They are encouraging numbers.
It has been wonderful to see India’s clear focus forward, be it the country’s ambitious renewable electricity targets for the short to medium term, the championing of the International Solar Alliance (ISA) dedicated to the promotion of solar energy among its member countries, and even the policies and fiscal incentives being developed and launched to create an ecosystem that will accelerate the uptake of electric mobility in the country. We are seeing the harnessing of the potential of biofuels to generate alternative energy. Done well, this will also create employment, especially in semi-urban and rural areas, and reduce pollution.
So, as policymakers incentivize lower carbon choices for industry and civil society constructively challenges us, we must look to more and more partnerships. Partners who complement our capabilities – or who do certain things better than we do.
bp has been thinking along these lines even before the current set of unfortunate circumstances set in.
So, what are we doing?
We have formally completed our investment of $70 million in India’s Green Growth Equity Fund (GGEF), as we had announced in July this year. The Green Growth Equity Fund (GGEF) in India - managed by EverSource Capital, is focused on investment for decarbonization of the energy value chain and resource efficiency. A JV between Everstone Capital and Lightsource bp GGEF recently saw a $70m investment from bp supporting promising projects in waste management, water management, energy efficiency, and energy storage.
With this investment in GGEF, bp will now have the unique opportunity to accelerate its ambition in India and to co-invest in a variety of zero and low carbon energy solutions. Recently we also signed an MoU with EverEnviro - a GGEF investment platform to evaluate biofuel projects from several sources including municipal solid waste, industrial waste, agri-residue and manure-based feed stocks. This is in line with our intent to build a biofuels business in India (including biogas generation and sales).
Another of our partners, Infuse, is a venture catalyst and was set-up as a public-private-academia partnership to support new ventures in the cleantech and sustainability space, given the need for an “incubation and entrepreneurship ecosystem” for cleantech entrepreneurs. It was set-up as a part of CIIE’s work as Centre of Excellence to promote entrepreneurship in the energy sector. Work continues there at a good pace.
In October 2019, bp initiated and continues to support a two-year-long joint research project between PDPU and IIM – Ahmedabad, keeping India’s Paris commitments. Our collaboration with IIT Bombay, too, is an independent research initiative to explore low carbon pathways for heavy industry in India.
In summary
We are committed to India’s vision of providing clean, affordable and sustainable energy to millions of people and support India in achieving its climate goals. We want to move fast on the path to clean energy but intend to do so with real discipline and care – keeping our focus on safety and performance while we transform, delivering long-term value for all our stakeholders.
And while we don’t have all the answers, collaboration and challenge will mark our way forward as we keep our eyes firmly on the netzero-by-2050-or-sooner prize for ourselves and the world!
Views expressed here are personal.