Govt Must Enable Conditions to Invest in Energy Efficient Solutions: IEA’s Brian Motherway – EQ
In Short : According to the Economic Survey, renewable energy now constitutes 47% of India’s total installed power capacity, marking a significant milestone in the country’s energy transition. This growth reflects India’s ongoing efforts to increase the share of clean energy in its power mix, with solar, wind, and hydro power playing key roles in achieving sustainability and reducing dependence on fossil fuels.
In Detail : As India makes significant strides in energy efficiency, it is necessary to see that focus is distributed across sectors and conditions are created to attract investor interests.
In a recent session on decarbonisation and energy efficiency in India, the Head of Energy Efficiency and Inclusive Transitions Office at the International Energy Agency (IEA), Brian Motherway said that the country’s global progress in terms of energy efficiency in 2024 was more than double the global average.
While talking with Outlook Business about India’s leading role in the domain, on the sidelines of a conference organized by a Delhi-based research organisation, Alliance for an Energy Efficient Economy, Motherway shared how the government can focus on more energy efficient technologies with a special focus on the small industries and the micro, small and medium enterprises (MSMEs)
Q) Can you tell me how you see India’s current status in terms of energy efficient technologies?
A) I think India is already seen as a global leader on energy efficiency. The country has rightly focused on energy efficiency as a key solution, where you can bring benefits of energy to people’s lives in ways that reduces the costs, level of investments and enhance energy security.
There are some great flagship programs here that are famous throughout the world in terms of standards and labeling for appliances and how that has really created a market for appliances to become more efficient. The Performance Achieve and Trade (PAT) Program in the industry is really important. It is focused on large industries and is giving incentives for them to become more efficient.
Additionally, there are programs that really affect the whole of society, like Ujala for the lighting program, which has benefitted people from remote parts of India in terms of bringing light to their home in an affordable way that just wasn’t possible before. All these remind us that energy efficiency policy can really make a difference to everybody’s lives, as well as to overall national goals.
Q) Can you name the sectors you think are doing best and the ones you think need a lot more work in terms of energy efficiency?
A) Even the most energy efficient countries in the world can achieve more and the government’s support to that can help every sector go faster.
In India, successes have been seen in large industries and there is possibly still plenty of opportunity for smaller industry and MSMEs. When we think about industrial energy efficiency, we think about steel and concrete manufacturing, but actually every sector can become more efficient. For instance a sector like textile, that employs a lot of poor people as well as women, can secure their livelihoods by making the firms more efficient. Even if energy isn’t a big proportion of their costs, it can be reduced and government policies can really matter here.
Q) How do you think India can make energy efficient technology more affordable for the MSMEs?
A) First of all, it’s not always the case that energy efficient technologies have to cost more. And this can actually be driven by policy. And we see in many countries, that household appliances can become much more efficient without actually becoming more expensive to buy. The same applies to industry in terms of energy efficient motors. It’s really not more expensive to buy an energy efficient motor than an inefficient motor but it will cost you much less to run.
So the question is not always about the availability of finance. It’s about awareness and market conditions. Energy efficiency often requires upfront investment, for savings that accumulate over time. That’s why, there’s a role for government in terms of finance mechanisms. It’s not always just about providing money per se but enabling money to flow by creating the conditions where investors are interested in investing in the kind of solutions, which in turn will make MSMEs more efficient.
Q) What further amendments can be made in policy to make renewable energy targets much easier to achieve?
A) I’m very confident India will meet its targets and it’s great to see that rising ambition in the reflection that for renewable energy now, the technologies are mature, cheap and to a certain degree it’s about government allowing it to happen.
It’s not so much that government needs to support it. We see that here in India, solar energy is by far the cheapest option and it doesn’t particularly need strong government support, it just needs to be allowed to flourish.
The government’s role comes not only in questions around the policy environment but also market structure, electricity pricing and the development of grids. As a country like India increases its penetration of wind and solar, it is crucial to know how it gets managed in terms of grid stability and the balance between supply and demand. So there is a number of ancillary issues that government needs to focus on, in order to allow a market that is really growing by itself and is also hungry to grow by itself.
Q) Are there any unique trends in India’s RE sector which can also be a lesson for other countries?
A) I think scale is important here. First of all, India has really excellent renewable resources, wind and solar and other technologies. We see that a virtuous circle of reinforcement between scales has grown a lot in recent years and that’s just building more interest in the sector for investors and solution providers. So, I think that sense of scale and pace of growth is quite special to watch here.
