The energy industry is in a flux. What does the future look like out to 2030. . . BP India Head, Sashi Mukundan, shares his views.
The world is in the throes of an energy revolution that is fundamentally changing every aspect of our lives. A couple of months ago, I had a wonderful opportunity to deliberate on the opportunities and challenges of India’s energy sector with industry experts at a panel discussion of the India Energy Congress, under the theme ‘Energy 4.0: Energy Transition towards 2030’. This issue being of utmost importance for all of us, I wanted to share here the salient points with a wider audience for further discussion and debate.
As you know, BP is an energy partner in over 70 countries and has been in India for over 100 years. In the last few years, the spotlight on India has never been as sharper and brighter as it is now - I have often heard our Minister saying, “Energy is here - we need to provide affordable energy to energize our economy”! This sentiment captures the moment. A moment where India needs to balance hunger for energy with the need to grow keeping in mind the climate change commitment. This commitment was made in the winter of 2015 in Paris at the COP 21 Summit. So, we need to fuel our economy responsibly with an optimum mix of old and new forms of energy.
India is also going through a digital revolution. Fifty percent of our population is below 35 and digital technology is penetrating deep into their ways of life. Gone are the days where we could learn from the past and implement best practices! Today, everything is NOW and has to be ready for consumption – or face obsolescence.
Another dimension - the way energy is produced and consumed is also changing. There are blurred lines between a producer and a consumer, a seller and a buyer, a supplier and a distributer and so on and so forth. In a world of digital connectivity, we will see a flexible combination of centralized and distributed energy systems – moving more to the latter as digital platforms make such operations less expensive, convenient and transparent. Consumers will look for flexibility to generate, consume, trade and sell energy; especially electricity. Policy and regulations will need to evolve to provide this flexibility and an open mindset to optimize the way we do it.
To illustrate more pithily, let me put forth half a dozen proof points as context to consider as the energy environment emerges in 2030 – and we develop the policy framework for it.
Next, disruptive changes coming from non-traditional players. Innovators are pushing the envelope and against all odds following their passions to innovate and disrupt the energy industry. Digital platforms will allow new ways of reaching the last mile. This will bring about unimaginable efficiencies and conveniences. Alternate energy, mobile fueling, distributed and micro energy platforms, an ability to aggregate and trade energy are all examples where new flexible regulation is needed.
Transparency, flexibility and out-of-the-box thinking are the rule not the exception – An example to illustrate this - biofuels are being used today ‘without engine change’ on airplanes - reducing greenhouse gas emissions by up to 90%. With gas as a clean fuel, CNG and LNG is entering transport. Solar and wind combined with gas are providing sustainable energy. These are all new and better ways that need different policy framework today to make it a reality in India tomorrow.
Another proof point is Digitization. It will play a big part in the transition of energy systems. Five key areas where I see this impact in India are: Radical change in consumption patterns, step up in energy efficiency, smart demand management, public policy focus on smarter infrastructure and an exponential rise in machines and robots.
My fifth point - we have always heard the phrase “consumer is king”. As large amounts of data are captured, processed and understood – so will be the ability to customize the service. This ability will dictate who services the “king”. I can see the world moving towards a place where decisions about energy usage are made for you based on your usage profile from big data. This will become our new reality. And will thus will require a liberal regulatory environment.
Lastly, and to me, most importantly - a change in mindset is needed where all activity supporting the end goal is encouraged - from having the need to control or police activities and penalize (to a point where no activity happens) to one where there is sufficient incentive and the player is automatically compelled to be more innovative and proactive. Minimize government control in how business is run and maximize governance should be our collective goal.
Views expressed here are personal.