0:00 The next trillionaire will be someone from the energy transition space. Whoever figures it out. Do you agree? >> It's a massive opportunity for sure. If somebody develops a brand new energy source which is cheap which can be deployed at scale that person will certainly become a trillionaire. >> Do you think the biggest problem in the AI world? It's not going to be chips. It's not going to be all of that. It's going to be electricity. >> It is because ultimately electricity and more broadly energy drive everything around us. Sumant SA, founder, chairman and CEO of Renew. If you want to understand why the next superpower could be the country that leads the renewable energy revolution, where the biggest opportunities in renewable energy are and how real this future really is, this episode is for you. And a country is not
0:45 able to produce cheap electricity. What happens to them in next 20 years? >> Countries that continue to be energy dependent are always going to be at a slightly inferior position. So it's incredibly important for India as a country to get to that point of having full control over our energy supply chain cuz everything else depends on that AI data centers your ability to export energy. >> Tell me what did China figure out 20 25 years ago to make this kind of infrastructure this kind of ecosystem and countries like India, America failed to understand this. >> I would say that the Chinese were just very precient, very foresighted about the whole thing. The US really has a lot of fossil fuels and today it's the largest fossil fuel exporting country in the world which is you know an eye openener for most people who think that
1:31 maybe it's Saudi Arabia or Iran and that is why the US has taken a very strong turn towards doubling down on fossil fuels where they're saying that all this renewable energy is hogwash. I don't really care for it. I don't even care about climate change. So I would say the US is actually quite comfortable with fossil fuels. Economically it'll benefit from fossil fuel prices going up. Let's say if you were to advise the prime minister of India to make India the global leader in energy, what would be three things that you would ask him to do? >> So I would say number one, focus on developing the supply chain including all the manufacturing of solar batteries etc. Protect it from Chinese imports. Number two, move the user industry as rapidly to either green fuels or towards electric solutions. Give more subsidies
2:16 to for people to shift to electric cars. The third thing I would do is I'd really really put a lot of effort behind building the grid much much much faster. >> Someone watching this is an entrepreneur in 20s wants to start a business in India in the energy space. What is an exact problem or an exact business which you think can help them make large amounts of money. I have a small favor to ask you. I need you to subscribe to our channel. The more subscribers we have, the better and bigger guests we can bring and provide you more value through these conversations. And the full audio experience of this show is also available on Spotify where you can follow us and listen to the new episodes as well. This episode is a part of the
3:03 Mobius Foundation sustainability dialogue series. To know more about Mobius Foundation and its initiatives, check the link in the description below. Would you say this is something which is on my mind since a since a long time because I've been hearing a lot of conversations around it. Would you say that the the most powerful country of the future will not be someone with most amount of oil will be someone with the cheapest and the most abundant energy. >> Yeah, I would certainly say that. Uh but in a lot of countries oil is energy and so therefore uh the two are synonymous. Yeah. So so let me give you a little bit of background. Okay. We tend to use
3:51 electricity and energy synonymously or sort of interchangeably. >> Yeah. >> But the reality is that energy is broader than electricity. Okay. Energy is used for heating. It's used for cooling. It's used for uh making different chemicals and so on. It's used for making cement. It's used for making steel. There lots of industrial processes that it is used for. Uh it is used for home heating and cooling. Right? So uh it's used for transportation whether it's cars or airplanes or ships etc. U electricity which we use to power our lights and uh our homes and so on is just a small component of energy. So electricity actually accounts for only 20% of all
4:36 energy consumption. Okay. >> Okay. Energy consumption itself generates carbon emissions which account for almost 75 to 80% of all carbon emissions globally. And I'll talk about why carbon emissions is important because it obviously leads to climate change. >> Yeah. >> Right. >> So now what is happening is that when you look at um uh you know how did how did oil become or fossil fuels become a bad thing? They became a bad thing because while our entire economic system and our livelihoods are based on fossil fuels because you know about our in the early 20th century cars were electric in nature. Then they got replaced by internal combustion engine cars and our
5:25 entire system then moved towards uh a fossil fuel based economy. Okay, which was fine because nobody cared about carbon emissions. But starting in the late 1990s, early 2000s, it, you know, that realization dawned that the more carbon that we're emitting into the atmosphere, the more we're converting the atmosphere into a giant greenhouse. And what happens inside a greenhouse? The sun's rays come in and the inside of the greenhouse gets warmed up. That's what's happening to the world right now because the carbon in the atmosphere converts the atmosphere into a greenhouse kind of a system more than it should >> and so therefore it's leading to higher temperatures. >> Now when you have higher temperatures
6:10 in the world as a whole >> then you know we have these polar ice caps in the Arctic and the Antarctic. >> Yeah. >> Right. There's a lot of water that is made into ice that is sitting there. The moment temperatures start going up that ice starts melting. >> Y >> and it leads to the rise in ocean levels. Now can you imagine if in Mumbai which is where we are sitting right now if sea level suddenly went up by 1 meter or thereabouts it would actually be very disastrous for a lot of the colonies or people living on the coastal areas and so on. >> Um secondly it begins to change weather patterns. M >> what happens if there was a disruption because of this higher temperature on the monsoons it would impact India India's entire agricultural production
6:56 if there's also higher temperature it would start melting the glaciers faster than expected which might lead to sudden flash floods at higher frequency than you know than expected. >> It's already happening. >> It's already happening. And then eventually when all the glaciers run dry then what happens to our perennial rivers the mighty Ganga and Yamuna and all those rivers that are part of India's history and tradition and religion and you know that feed into the indogantic plane. So the costs of this change >> are not very well understood and can be absolutely disastrous >> especially for a country like India >> which has such a vast number of people. >> Now the world as a whole recognized this
7:42 and said you know what we got to do something about this problem because if this continues unchecked >> then it can be really really bad for the world as a whole. Yeah. >> Plus it'll lead to immigration of migration of people, wars, you know, could get fought. So all sorts of consequential changes that we can't even imagine right now. >> And you know there's this UN uh United Nations group that essentially said that if temperatures change by more than 1.5° centigrade is going to lead to irreversible changes in the world. Mhm. >> And therefore we must all battle together and keep temperature change below 1 and a2° centigrade. And so various you know agreements were arrived at between all the world's countries to mitigate carbon emissions.
8:28 >> Now so question was how to do it? How do you mitigate carbon emissions? Because if the whole world's economies are based on carbon emissions because of fossil fuel usage then how do you suddenly say you know what no more carbon emissions. You can't suddenly shut off lights. You can't suddenly shut off making steel and cement and all of these things either, right? You can't suddenly shut off your thermal plants which run on coal. Then what will happen to electricity? >> So you can't just do that. So the question was how do we now do this migration from fossil fuel-based uh energy systems to what? So that is really where the whole issue of renewable energy started becoming an answer to this problem. And so back in 2007 and 8 when I took the decision to join Suslon, some of
9:15 this was beginning to start percolating into people's minds. Yeah. >> And that's the reason I took the decision to get into this sector because I realized that this is going to become a massive problem in the future. >> And so therefore devoting one's career in life to solving this problem or helping solve the problem because no individual can solve it byas I thought was a very worthwhile endeavor for me for the rest of my life. I was 45 at the time. And secondly, I also felt that in doing this, there would also be business opportunities. Fair >> because you can't solve anything without it being good for from a business standpoint because the amount of capital you need to change an economic system that has developed over centuries, right, requires enormous amounts of capital right? >> So anyway, so that is what my thinking was and that is what we now need to do.
10:00 So the question is how does renewable energy come in? Renewable energy comes in uh through wind and solar. Um but it's electricity. >> Okay. >> So it begins to address the 20% of energy that is electricity. And today after 15 years of my having been in this sector, we are now at a point where renewable energy accounts for approximately about 15 to 16% of electricity only. >> Not the energy. not energy as a whole. >> Okay. >> So on one level you can see the scale of the challenge at another level you can see the scale of the opportunity >> because eventually everything has to change. >> Yeah.
10:45 >> Now one interesting thing happened along this last 15 years journey of mine. >> In the beginning wind and solar were more expensive than coal based power generation. >> And so the question was who's going to pay for the extra cost? India said why on earth should we pay for it? We didn't cause the carbon emissions to happen into the atmosphere. If the western world did it, let them pay for it. Right? Which made eminent sense and as an Indian, I thoroughly agree with that logic. But somewhere in when when Prime Minister Modi came in, he took a different view which is very interesting actually. And you know where he derived this view from, I guess it goes back to a gut understanding or a gut intuition or call it what you will >> but he said you know what or he may have
11:30 understood this at that time >> that look this is actually something that has to happen. M >> and if it if it is something that has to happen, why should India not take a lead in this area? >> Fair. >> And so he pushed wind and solar very hard. He set very big targets for wind and solar in India. And that got the whole government to start really pushing hard on doing more and more wind and solar. >> And that's how we've got to this point that we've got to which is actually compared to all the other countries in the world, not a bad position for us to have got to. >> 15% is not bad. is not bad. But in also in doing that because the scale increased and because of a variety of other factors, wind and solar suddenly became cheaper than coal based power. And so affordability suddenly became a
12:16 big driver of this energy transition as well. >> True. >> And so now suddenly it makes more sense to add wind and solar than it makes sense to add coal based power because it's cheaper. >> So it's no longer even about carbon emissions. It's become much broader than that and it's become much more about what is cheaper and what is better for us as a country and what is better for us as an economy. So that's that's where we are right now. >> But right now the amount of energy that we use or the amount of electricity we use let's just pick up 15% 20% of the energy and then the 15% of it right. So the amount of electricity that we use it's going to go up significantly with the rise of AI technology all of this right do you think the pro the biggest
13:02 problem in the technology world the future in the AI world it's not going to be chips it's not going to be all of that it's going to be electricity >> it is it is because ultimately electricity and more broadly energy drive everything around us >> so we don't have enough electricity to make all of us intelligent >> no that That's true. But I I think that electricity in India is growing at about 6 to 7% a year. >> Uh energy is growing a little bit less than that at about 4%. >> But we are adding a lot of new capacity fairly rapidly as a country and the good thing is most of that is clean energy >> which is wind and solar. >> How much electricity do we need in India or compare it with India, America, China, what are the electricity needs? You must be having some ballpark number
13:48 watts or >> no no I I can give you the exact numbers. Um so today India has a total power generating uh capacity of about 550 gawatt okay >> or 550,000 megawatt. >> This is the third largest in the world >> in a year. >> In a in a that is a total power generating capacity >> capacity in a year. >> Ah so this this generates approximately 1.8 8 trillion kilowatt hours of electricity every year. That is how much India consumes. >> Okay. So there's capacity then that capacity is used to generate this much electricity which is consumed by Indians. That 1.8 8 trillion units is growing at about 6% every year. Which means we need about 120 billion units
14:35 more of new energy every year >> which in renewable energy terms is equal to between 60 and 70 gawatt of new renewable energy capacity. >> Okay. >> Last year India added about 50 gawatt of new renewable energy capacity. So we're almost there. >> Okay. >> Okay. It's at a point where all electricity consumption increase can come from renewable energy in the next few years time. >> And this of this 550 gawatt today uh wind and solar account for about 220 gawatt and if I add hydro and nuclear it amounts to 300 gaw >> 250 of the balance is is coal based power. >> Okay. >> Now coal is coal based power is not really growing now. Nobody wants to add more coal based capacity because nobody
15:20 everybody knows that over time coal will get phased out >> and as people say say the stone age did not come to an end because of lack of stones it came because new technology showed up >> similarly the the coal age in India is not going to end because we don't have any coal any longer but because something else has overtaken that which is cleaner cheaper easier to install etc etc so that's the direction that we are going to go in now as we do all of this. Um, and as we add this 1, you know, 1.8 trillion at 120 billion units and this 60 70 gawatt, this 550 gaw by 2035 is going to double, >> okay, >> to about 1,100 gawatt in India.
16:07 >> And of that 1,100, >> the capacity or the consumption? >> The capacity. >> Okay. >> The consumption at 6% will double in about 12 years. M >> so in about by 2035 we should assume that the 1.8 will become 3.6 and that includes electric vehicles it includes AI data centers and it in includes more industrial activity it includes everything >> because also keep in mind >> that energy that that appliances that use electricity are also becoming more efficient. >> Cars are becoming more efficient. Right. Light bulbs have become more efficient. So there is efficiency improvement happening at the rate of about 1 and a half to 2% every year as well. Okay. So this electricity growth if there was not efficiency improvement would have actually been 8% a year >> which really is quite a large amount right it's by far the largest of any
16:54 large economy in the world >> so by 2035 electricity demand will grow to double >> the power cap generating capacity will double and of this 1,100 renewables will account for almost 750 gaw >> okay >> up from the 300 right now so there'll be another 450 gaw of capacity added in the next 8 9 years. So it's growing at about 50 to 60 gawatt a year is what we will need to keep growing >> which is by the way the second fastest in the world after China. >> M >> it's actually last year we also crossed the US. >> So India is actually growing pretty fast in this whole area. >> Okay. >> Okay. Now uh just to give you comparative numbers uh the US's power generating capacity today is 1,100 gawatt. So it's almost double that of
17:40 India's. But China is almost I don't even know what the latest number is but it's probably 2 and a half thousand gawatt. So it's almost five times India's capacity. >> It's bigger than US as well. >> Much bigger. Much bigger. >> Why? Because the country needs more because it >> because they're a much bigger manufacturing uh powerhouse now. So all of that requires a lot of energy. So the rest of the world has outsourced a lot of their production to China and therefore also a lot of their carbon emissions to China. So you know the funny thing is China added almost uh 60% of the entire world's capacity addition of renewables last year 60%. >> Wow. >> So they did more than the rest of the world put together. >> So what is happening there is insane right? >> So be that as it may India is doing a
18:26 pretty good job as well. We are still you know we all said and done we number two. We're distant number two but we are number two. Okay. So we should be happy with that. >> Do you think we could run out of power? or electricity? >> No, not at all. You know, an interesting stat I heard the other day was that the world gets every minute from the sun 8,000 times the amount of power that it consumes in that minute, 8,000 times. So even if solar increases by 100 times, right, and meets all of the energy needs, not electricity only, but all of the energy needs of the world, if solar increases by 100 times, we'll still be getting more solar power by almost a factor of 80 times. Okay? Every single minute. So there's
19:14 enough energy that is coming into the world as a whole from the sun. So the sun is just an uh infinite amount of of a source >> but we don't have enough ways to actually store it, use it, distribute it today, right? Sun is there as a source but do we have enough infrastructure? >> Good point. It's a very good point. See, we are trying to create an in a system now which was built for a certain different historical power generating mindset or sort of uh system. What is going to happen is that over time technology is going to come to our rescue and it is
20:00 >> solar when it was started about 18 19 years ago was almost 10 times as expensive as it is right now. It's come down by a factor of you know 10 times in terms of the cost. There's a lot of work happening on technology. Solar costs are going to keep coming down. >> At the same time there's a lot of work going on in batteries as well. battery costs are also going to come down. And as that happens, the cost of solar plus storing that solar and using it in the evenings when the sun is not there or at night when the sun is not there, that cost is coming down and it's almost at a point now where using solar plus storage is going to be cheaper than any other solution. >> Fair. And grids now have to get built
20:46 out very rapidly because as electricity grows, we need that grid to really be able to take power from wherever it's getting generated to wherever it's going to get used. So we need this whole lattice type of interconnecting grid system all across the country and we don't have that really fully at this point. So grid buildout is going to be very critical. >> But that's the tricky part, right? That's where >> that is a trick that you're absolutely right. It has >> that's what the challenge is. It is a challenge but I think it's a challenge that is addressable with proper planning and proper execution the government and I think everybody realizes that this is a problem that we need to solve. So there's a lot of work going on in this area and I think you know because renewables suddenly grew quite rapidly
21:32 over the last year or two um and that leads to grid management issues because there's a lot of surplus uh energy in the middle of the day and not enough in the evening >> and that problem has hit us but now we're trying to find solutions and we will find solutions over the next couple of years time and uh and a lot of that side of the solutioning is going to get ramped up. Um and I I'm pretty confident that we'll be able to 2 three years later be able to go both at pace the generation side as well as the transmission and distribution side. And then another very interesting thing is going to be happening Raj and that is that you know people are going to start putting solar more and more on their rooftops and using it directly into their homes >> and you know uh as solar technology evolves I will not be surprised if you
22:19 get to a point where you'll start having see-through windows with solar on them. Car roofs will start having solar on them. You know it'll become ubiquitous. it'll be everywhere and so everybody is going to be using power or generating electricity and using it in a very different way than we are doing right now. So there is going to be a big I think massive shift in our relationship with electricity that is going to happen as a result of technology evolution. But do you think that if technology the way it is growing right now and the AI consumption and data centers and all of the things that are coming in our life right if it happens faster than our capacity to build an infrastructure then do you think the governments will start
23:05 choosing where to provide electricity should should they give it to citizens should they give it to industries should they give it to AI data centers or what should they do because I don't think I don't Yeah, I don't think Raj you need to worry about that. There are people like us and our company which are going to make sure that we add capacity at the rate that is required to meet the country's requirement. >> Um and I'm pretty I'm almost 100% confident that we will not get to this scenario that you're describing. If anything, we will have too much power over a period of time and um >> we'll have too much power. we'll have too much power to a point where um you know we may have to start because you see the industry is now ramping up and uh everybody is getting into the
23:52 generating space >> all the large conglomerates of India are now in the space >> top 1 to 10 everyone >> everybody right then there are people like us fortunately we're still the second largest in the country right now um then there are lots of small guys as well there are lots of private equity funded folks folks as well. So now I would say compared to when I started and even from 5 years ago, you know, I I would say the number of players has really increased dramatically. So the amount of capital going into it, the amount of people, the amount of hands, the amount of management bandwidth that is going into the sector is now at a much higher level than it was just a few years ago. And all of these people are out there looking for land trying to get connectivity to the grid to build
24:38 projects at sites to get PPAs to find buyers of their power. So all of that is happening at a much much higher pace than it was happening earlier. So I don't think that shortage of power is going to be a problem at all. >> So why why is there a UN cry between all AI founders and they talk about it in US specifically >> in the US? Yeah. Because the US, India is not the US and the US is not India. The US has certain deficiencies, structural problems that India has addressed. What are those? Very quickly is that the US has a grid constraint. >> Um the US has seven different grids in the US. >> Uh India has a single national grid. >> That's a big difference. We can move power from any part of India to any other part of India
25:23 >> without any hitchkahhat or problems or obstructions. >> Interesting. US the US you can't you can't generate power let's say in the windrich state of Texas or the Midwest anywhere and transfer it to California or to New York because they don't have a grid that interconnects all the way through they have seven as I said seven different grids and planning the interconnections between those is uh is very difficult to do and it's even harder to build the lines because some states are democratic states states, some are Republican states. So it's a bit messed up uh yeah uh to do that. And that's why what's happening in the US is and see the US electricity demand was not growing for many many years.
26:09 >> So any renewed renewable capacity that was coming up was replacing uh existing other capacity that was going out of um you know that was getting decommissioned. Now suddenly they're having to because this AI demand has suddenly come in. Mhm. >> It's actually leading to to electricity demand growth of about 2 or 3%. Which they were not expecting and therefore you know there's a sudden ramp up happening in generating sources which was not the case earlier. And the second thing is the grid is just not geared to transmitting more power. And so a lot of these data centers that are coming up are trying to find solutions that are called behind the meter solutions where you don't go to the grid at all. You have your generating station right next to you, right? Which is why there's a
26:56 lot of focus on things like nuclear or geothermal or gas, which is something that you can put next to your data center or somewhere close by. And there's less of a reliance on the grid because you just can't wield the power or move the power from one part of the country to another. We don't have that problem in India. Number two, in our case, our uh electricity demand is already growing at five or 6% a year. AI may add another 1% growth to it which is not at all difficult for us to meet >> with as I said is you know so many people now entering the sector so I think structurally is very different what we now have to do as a country and this is sort of the next challenge for us um and I must say that you know we are standing at multiple inflection points in our energy transition journey
27:43 as a country those really are number one uh renewable energy needs much faster grid buildout which you and I talked about earlier. So that's the first thing that needs to happen. >> The second thing is that this whole conversation of energy security has now entered our mindset in a much bigger way that wasn't there earlier as a result of the Middle Eastern wars and so on that are happening. Now India realizes that look we can't just be dependent on uh importing our energy requirements whether it is importing oil from the Middle East or elsewhere >> or importing clean techch equipment from China for example because China actually has a lock on the clean techch supply chain
28:28 >> and to come back to the question that you asked earlier will energy systems in countries be dependent on oil or will they be dependent on thought really was your question. I would say that 25 years ago, China saw this issue and they realized that they didn't want to be dependent on the countries that export oil >> and so they started working on electrifying their economy as fast as possible and within that also developing the supply chain. M >> so and over time they moved the majority of the world's clean tech supply chain into their own country either in terms of critical minerals or refining of the critical minerals or manufacturing of the um u solar let's say uh polysilicon
29:14 or wafers or cells that are required to make solar panels or batteries or now electric vehicles. So they've now got a lock on this whole thing. Now for a country like India that's not a great situation right because at least in oil you can import oil from 10 different countries you can't import all your solar equipment from just one country that to >> you know >> we all know the geopolitical issues there >> not so friendly country >> yeah so therefore that's a real problem for India so we have to develop a supply chain in the country that's the second inflection point and the third inflection point is that we talked about the fact that electricity is is a small part of energy. >> Mhm. >> Right. Only 20%. What do you do about the balance 80%. You have to address
30:01 those areas as well. And we now have solutions becoming available that you can start addressing those areas. But you also need to address the user industries like electric cars for example. How do you address those? So you need massive changes on the downstream side of industries that actually use energy. So a lot of changes have to happen there. So these three four inflection points that we are now sort of at a at we've got to as a country. So I would say phase one of our growth of renewable energy is done. >> We are now entering phase two which requires a much broader >> growth in our entire energy system uh across multiple areas >> and it also requires very different governance mindset on the part of our
30:46 policy makers. So that's really where we are. So it's very interesting where we are at this point and I frankly I haven't in my 15 years of actually now if I add Suzan you know 17 18 years of journey or time in this sector I have not seen us stand on the brink of so much change uh as I'm seeing that we are at right now >> and it's an interesting imagine like an emerging market >> and a country is not able to produce cheap electricity what happens to them in next 20 years >> very tough I think we going to see a shakeout happening in the world. Um, countries that continue to be energy dependent and countries that somehow find a way of becoming energy independent and those that are energy
31:33 dependent are always going to be at a slightly inferior position. So, it's incredibly important for India as a country to get to that point of having full control over our energy supply chain. I think it's going to be one of the most important things that we as a country have to achieve over the next several years. You know, because everything else depends on that your AI data centers, your ability to export energy in the form of green hydrogen or green ammonia um ability to also expand comput I mean export compute capacity. Your ability to export any product is based on cheap electricity. >> True. >> Right. So many products are so we have to get to that point. We can't always be dependent on the rest of the world. And for the longest time, it has been the
32:18 aches heel of India's economy that we've had to import 150 to 200 billion worth of fossil fuels every year. And every time oil prices go up, the rupee goes down, inflation goes up. I mean, it's it's just not a very highly energy dependent. Yeah. Yeah. It's not a good situation. So we have to find a way of escaping from that um from that um situation which I think this government is doing their best uh on finding solutions and that's why we made the progress that we already have >> but are we close will we be able forget actually will we be able to do it or not we will be right what's the biggest challenge that you see today what is stopping us to reach a point where we are fully independent or probably slightly more independent the way China is today.
33:05 >> You know, let's let's talk about China for a second, okay? And I can't claim that I know their story that well, but I've seen them as an outside observer in the space. I think about 25 years ago, maybe perhaps even longer, they realized that they have this dependence and they wanted to get away from that, right? So, what do they do? Um you know on the oil side for example they built a massive strategic uh buffer >> which uh you know they're drawing down right now which is helping them which is actually helping stabilize global oil prices also which is very good. >> But I think beyond that what they've also done is >> they've really as I said built this clean techch industry and really been able to indigenize it and you know over time what they see what happened is
33:51 technology in the beginning was developed in the western world. Mhm. >> Uh they tried to use or they decided to use China as a manufacturing location for the end product. >> China said fine please welcome come in we'll give you some subsidy we'll give you you know ways to set up your business whatever whatever right. >> So the all these western countries you know in their naivity a little bit I would say you know thought oh wow this is great. So they all went and made big investments there. I think what happened is that there was a technology transfer that happened willingly or unwillingly. >> Um and then over time I think what China was able to do was not just set up the uh the downstream side of the business but they also started looking at uh manufacturing the capital equipment
34:37 which is used to make that downstream equipment. For example, you know, take the case of a solar panel >> or a solar cell, right? Now, to make the solar cell, so you can either buy the solar cell from China, >> right? But you have to get equipment that is used to make the solar cell. Now, who makes that equipment? >> China. >> Now, China. But in the beginning, it was the developed countries. >> So over time, China took that industry also and indigenized that. Then the question was who upgrades these this equipment this capital equipment and who figures out what is the next generation of it that was happening all that research was being done in the western world that also has now moved to China. >> So you see there are three four different layers of it. >> First thing is you start manufacturing the end product. Then you start making the equipment to make the end product.
35:24 Then you start make doing the research to make the equipment to make the end product. >> Okay. There's a lot of work that you have to do >> and then you econom economically colonize countries which actually give you raw materials. >> Exactly. That's the next step and exactly and then then you realize that you know if I need if I'm making batteries for example and I need lithium to make the batteries where is the lithium found or where's the cobalt found if it's found in the Congo then let me go and start investing in the Congo in Congo right make them part of my bricks of my belt and road initiative right give them money to start extracting and then don't build a refining plant there build the refining plant at home >> so that all that comes here and then slowly slowly because of all the subsidies that I give and because of
36:11 manufacturing capability that I have I'll start making sure that all of my industries are so low cost that whatever little capacity that existed in the rest of the world goes out of business okay so anything that existed in the western world in terms of refining capacities or elsewhere is gone >> out >> so even now if I as a country let's say as India decides to go into some of these places to get that that that mineral capacity. We don't have the refining capacity. >> So we have to get the minerals, build the refining capacity and then build the research R&D base, then build the capital equipment manufacturing setup and then start building the downstream uh set you know equipment. We are starting right now only from the
36:57 downstream side. M >> and to to again give you an example today in solar the solar pan to make a solar panel there's a fourpart value chain you start from polysilicon where you take quartz which is fortunately found abundantly in India >> convert that into polysilicon which is like a a material from that polyil which is like a hard material from that you then make wafers which is just the the blank slate kind of a small thing that you see inside a panel Then from that wafer you make the cell which has a lot of these striations to capture the sunlight better. A lot of ridges and so on. Lot of chemical layering on that surface. And then you put in place the wiring that sort of takes the energy out.
37:43 >> And that is still a small small sort of square. And then you go into the last part which is making the module where you essentially take a number of these cells, arrange them on a panel and then put a glass cover on it, put an aluminum frame around it, put some wires and that becomes a solar panel. Okay, that's how the whole thing is made in India today. Uh we started with making panels in India. We opened up the whole sector. I mean not opened up anybody could make it but we stopped imports of the equipment from China. So that allowed domestic manufacturing to get into modules. Now we're doing the same thing for cells. So we're working backwards from the absolute end of the supply chain, right? Of the end product. And we're working backwards,
38:29 >> right? But it's not just a question of then making wafers and ingots and then making polysilicon, but also the equipment to make all of these things, then the R&D to support all of that and then the raw material that perhaps goes into all of this. So there's an enormous amount of work that we have to do ecosystem. Yeah, and you know this is just one product in the clean tech supply chain. Admittedly, perhaps the most important one, but only one product. We need to replicate this across industries, batteries, automobiles, you know, so many other areas. So, it's an enormous enormous task that we face as a country and we need to get cracking on it frankly. But tell me what did China figure out 20 25 years ago to make this kind of infrastructure this kind of ecosystem
39:16 and countries like India, America or in countries in Europe we all failed to understand this you know I don't want to be too critical of anybody here I would say that the Chinese were just very precient very foresighted about the whole thing uh and full marks of them for that >> but there has to is something they must have figured out which we failed to understand. >> You know I I think look in 20 25 years ago we weren't even thinking about clean energy. Uh it wasn't anywhere in our mindset. We weren't even thinking of these materials and minerals and you know solar and wind. It was nowhere. I mean as I told you in 2008 when I got into Slon at that time you know Suzan was so far ahead of its time in making
40:03 wind turbines. Um solar modules or solar was just starting at that time >> but these guys figured it out 10 years ahead of all of that and you know came up with this whole game plan and then they implemented it. Why did other countries not do it? I I think it's you know it's a good question. I mean I don't have a clear answer to it. I think that as Indians we tend to be very inwardlooking. Uh you know we're such a giant country. We are so argumentative. We are so focused on what's happening within our borders that I think perhaps we often don't see what's happening in the world outside of us and how to best deal with the world outside of us and how to take some of these kinds of decisions in a manner which is uh
40:49 foresighted beyond what other countries are thinking. I think we're doing some of that now uh under the current government and I give them full credit for that to try to address some of these areas now. But yeah, we should have done it 15 years earlier than that. But you know, time gone is time gone. Other countries, I think, look, you know, taking a step back today, there are two kinds of countries in this world. >> There's one set of countries that have fossil fuels, one set of countries that don't have. >> If you divide those two two types of countries by population, there's only 11% of the world's population sitting in countries that have more fossil fuels than others. And there's 89% of the world's population sitting in the bucket that don't have access to fossil fuels that they have to import it. It includes China and India. It includes Europe. It
41:36 includes the Far East. It includes a lot of Africa. >> Right? So many countries around the world don't have fossil fuels. Now, um the countries that do have fossil fuels are happy to export it and continue to uh persist with an economic system that is based on fossil fuels because it's in their interest >> uh to have a market for their product. Um but now I think these other countries are realizing that this dependence is now very dangerous because of all the uncertainties in the world as a whole where energy supply chains are getting weaponized. Um and so therefore these other countries are realizing that they got to do something about it. India fortunately has made progress and we have the tools at our disposal in the
42:23 context of a largesized economy uh an energy market that is already pretty large and growing substantially. We have therefore the economies of scale. We have I would say relatively enlightened leadership which understands some of these issues. We've already made a lot of good progress over the last you know 12 years in some of these areas. And so we have a lot of elements um at our you know within the country right now which gives us a good platform to be at least the second country that starts making the transition from being an energy fossil fuel importer to becoming an electro state. Okay, that's the journey that we have to do very very fast now >> because there is you know when China did it there wasn't really a gun to their head. Yeah. Now there is a gun to every
43:10 country's head. So we just have to move very fast but as I said we have some of the ingredients that allow us to make that transition quickly. >> So I have two questions on this. Okay. Probably India was always focusing on our problem. We were inward-looking country. We are still inwardlooking. We're focusing on our problem there. What was the problem of like let's say Europe and America? Why were they unable to see this? Because they're developed, they're rich, they understood this game much better. They've been economic superpowers of the world. So they also understand that creating an ecosystem gives you some kind of edge. >> Why did they do it? >> I I think there is a difference in the approach of both Europe and the US. uh the US really has a lot of fossil
43:56 fuels >> and today it's the largest fossil fuel exporting country in the world >> which is you know an eye opener for most people who think that maybe it's Saudi Arabia or Iran or you know Russia or something like that but the US has really invested in developing its oil and gas and today >> US exports more than Saudi Arabia. >> Yes. uh and um and and that is why uh and and under the current administration, the US has taken a very strong turn or a very definite turn towards doubling down on fossil fuels >> where they're saying that all this renewable energy is hogwash. I don't really care for it. I don't even care about climate change, which is why they've pulled out of the COP agreements. and um and uh they are saying you know
44:42 what fossil fuel is the is the story of the future and that is why we want to invest in developing more and more fossil fuels and we want to export more and more of it and um and so a lot of this disruption that is happening globally and oil prices are going up and down is actually creating export markets for them. So they are actually able to export their gas production to Europe and other parts of the world in a very big way. Mhm. >> So I would say the US is actually quite comfortable in with fossil fuels. It is quite economically uh it it'll benefit from fossil fuel prices going up. Consumers within the US may not because you know the price that they pay at the pump is linked to global prices. So
45:28 consumers individually may be impacted but companies within the US will benefit substantially and as a country the you know on a net basis the country the US will end up gaining so they are very happy and they've really doubled down on becoming a fossil fuel country right now >> but also that changes from administration to administration under the Biden administration it is all about renewable energy and let's you know they came up with this massive uh uh you know incentive uh plan for renewables. So it's a little confused you know they sort of go from one extreme to the other depending on whether there's a Democratic administration or a Republican administration. So it's hard to say what is the US's
46:14 consistent view. Okay. Today it's fossil fuels. That's the path that they've gone down. Um Europe on the other hand I think was a little bit naive in the way they approached the whole situation. First of all as I said they exported a lot of their manufacturing base to China and now China is really eating their lunch as far as manufacturing is concerned. So that's really not good for Europe. Number two they let themselves be dependent on cheap Russian gas for the longest time. And then when the Russia Ukraine war happened and Russia showed up on Europe's doorstep uh from a security standpoint suddenly Europe woke up to that danger and said oh this is really not good for us and they try to cut off
47:01 Russian gas but then the question was what you know where else would they get their gas supplies from. So then they turned to the US um which was obviously their NATO ally but under the current administration their relationship is going up and down. So suddenly Europe is very exposed right now on energy supplies. They really don't know what to do. Meanwhile they um their energy prices are very high and therefore their manufacturing industries are becoming uncomparitative. >> But one credit to Europe is that they are sticking to their views on the whole issue of climate change. And that's why they are saying that you know what anything that now enters Europe we want to assess how much carbon there is in that product and we want to price that and if you have too much carbon in it
47:46 you have to you'll have to pay what is called this carbon border adjustment mechanism tax. So their whole economy is going to be a little bit isolated from the rest from the rest of the world and it's going to be a higher cost economy >> and what that is leading to in the long run is a widening um or a diverging economic gap between them and the US. So if you look at per capita incomes in Europe and the US which 20 years ago was more or less the same, the US is now 30% 40% higher on a per capita income basis than Europe is. So I don't know how Europe is going to find their solutions but they have to you know think through this very very carefully. >> Is it going to be worse for Europe as an economy if they
48:33 >> so I think so I think so and um um I don't think that they found a good solution to this whole problem >> and especially in an era of leaders like Trump and Xi Jinping who are very economically driven. Yeah, look, I won't say that European leaders are not economically driven. But the problem is that Europe is very fragmented as a as an as a block, right? Every country has their own leader. It's 28 countries or however many countries they have in the European Union. Decision-m within the European Union is very difficult as as a block. >> So, they have some of these issues and problems that they have to sort through. But again, I'm not an expert on Europe. I, you know, I just see what I see from the outside. Um but I I can see that you
49:20 know energy is going to be tough going for them >> and you know they unlike India which where we can aspire to become a manufacturing power in clean techch they can't because the costs of manufacturing are a lot higher >> so that's you know labor costs are higher energy costs are higher so >> it's going to be tough for them >> US it's surprising not many people know this that the world is US is the largest exporter of fossil fuel in fact recently Recently I was reading that post the Iran conflict the most amount of LPG that we get is from US. Earlier we used to get it from Qatar and the West Asia >> but now we get it from US and post Iran war we have been dependent on US for our gas needs. >> Yeah. So I'm not surprised because we can't you know a lot of the gas that we
50:05 used to get from there is not coming out any longer. So where's the choice? There are some industries that are entirely based on gas whether it's LPG or whether it's now the um fertilizer industries. So you need the you know you need gas to operate those areas. Do you believe in this that some countries are incentivized to do wars because then they make other countries dependent on them? Like post Russia, >> Europe got dependent on US. Post Iran, a lot of Asian countries got dependent on US including India for energy needs. >> Yeah. I look I think maybe that is true in the short run because then you know if there is only if a lot of the world supply which is coming from the Middle
50:50 East gets curtailed because of the crisis that is happening in the state of Hormuz and then the US emerges as the alternative supplier. Of course that's where people are going to go to get their supplies from but long-term people are also thinking that you know this this disruption is not good for me. I'm paying a higher cost. It's showing to me that supply chains are inherently fragile >> and therefore the longer my supply chain uh and the more dependent I am on it the more I'm exposed and the best supply chain I can get is one that uh is within my borders which I can control and so that's what everybody then starts working on and in the long run you know this dependence people are going to work towards ending it
51:35 >> yeah but how will they work towards ending it >> by going uh uh you know by electrifying their economies and then trying to have a domestic electric supply chain by moving the user industries as much as possible towards electrification. So a lot of that is going to happen. So you know the so you know as when I started in this industry it was all about climate change. >> That is what drove the industry to get started. Somewhere in the middle it became affordability because it became cheaper. So that is what drove renewable energy. Today it's energy security and you know while climate change was a little bit ephemeral you know high level big picture something futuristic >> hard to understand this 1.5° what impact
52:21 would it cause me is it really caused by temperature change or is it caused by some other factors who knows right but scientifically I understand it >> but energy security is something people understand from the gut because it hits their wallet immediately it hits their dependence on other countries immediately. It weakens your geopolitical position immediately. >> So this is now becoming the biggest driver >> of a country trying to and especially India saying you know what why the hell should I be dependent on other countries I'm going to be masters of my own fate and my own destiny and therefore let me make sure that I address this problem on a war footing. So that's what's going to happen and that is what is going to drive our sector forward now in a much >> but how far are we from becoming truly independent or let's say largely
53:07 independent >> I would say 10 years because I think in >> just in 10 years you think we can be majority of energy will come from in-house like from just within the country >> see energy will start coming from inhouse even faster than that because all of our generation is now hap electricity first of fall is within you know it's already now everything is coming from inhouse right electricity is now fully domesticated >> the supply chain for electricity is going to be fully domesticated in the next 5 to seven seven years let's say including batteries uh and all the other stuff >> electricity >> energy we will I think um get rid of most of our gas imports through things
53:52 like green ammonia and green hydrogen uh and by electrifying sectors most likely in 10 years. Um and what else is there? Uh other than that, it's just a question of then taking the supply chain further back uh into minerals and so on. That may take a little longer, but I would say in 10 years a bulk of that will get done. So here let let me ask you a wider question in comparison between countries. So in next 20 years who who will be the leader like will it be China because they control the supply chain of the entire ecosystem. Will it be America because they are highly focused on fossil fuel and then actually
54:39 capturing sort of the countries nearby who which generates fossil fuel or will it be India India where there's growing demand growing appetite and fast innovation. So I think that and by the way this is an excellent question and this goes to the heart of what's happening in our sector right now. My feeling is China see China is sitting with an enormous lead right now in the whole electricity area including the entire supply chain including going all the way back to minerals right >> and they've got a lock on certain things like rare earths which are used to make permanent magnets which go into a lot of other things motors whether they're you know based on fossil fuels or not. they've really expanded their footprint. >> That lead is going to be impossible to remove.
55:24 >> So they'll definitely be sitting right at the top. >> Okay. >> Okay. Of the whole energy value chain. Okay. >> And their size and scale is so much larger than anybody else's that whatever they do uh is going to drive the rest of the world to a large extent. >> So it looks like China has won the race. >> China certainly is uh at a point where they are far away ahead. So I would say that there are so so let's let's put them here right >> now what's happening is and as I talked about earlier there are going to be two broad buckets of countries right there's this fossil fuel countries and there are electric countries okay in the electric countries China is far away ahead and is going to definitely be sitting at the top >> on the fossil fuel side you have the US which is definitely far away ahead of other people uh but it's not like
56:10 countries like Saudi Arabia and the other oil rich countries are not also close behind they also are close behind. Um but I think the US is certainly sitting at the top on top and are going and moving rapidly in that direction. Um the question is what is going to be the interplay between these two buckets. I think over the next 5 to 10 years a lot of countries are going to try to remove their dependence on the fossil fuel side and are going to try to migrate towards the electricity side. So I think in that sense China which is sitting on top of the mountain on this side is going to have an advantage as more and more countries >> try to get into that into that space. Okay. >> So I think longer term therefore the the
56:55 I think the the focus is going to be a little bit more on going the growing the electricity side and in that sense China is going to eventually end up winning out. The big thing that they have going for them is technology because on the one hand you're digging things out of the ground in fossil fuels. On the other hand, you have a lot of technology moving in your direction and long term I trust in the ingenuity of the human mind and humanity is going to find cheaper ways of doing things is going to be smarter in the ways of doing things and that is going to drive this whole technology bandwagon towards the electricity side. So I think between the two it's going to be that of the electricity side. Okay, it may take 10 years to play out, 15 years to play out, but I think therefore eventually China is going to
57:40 end up being in better shape. So all these wars, these geopolitical things that are happening where in some ways the fossil fuel world is trying to control fossil fuel supplies, I think is going to at some level boomerang on them because other countries are going to say, you know what, if there's so much volatility in this area, then do I really want to be dependent on this in this area? >> Screw you. I'm going to fix myself in a different way. >> Exactly. Right. That's what's going to happen. Now, where does India stand in all of this? I think India is going to go down the China path or we going to go rapidly in that direction. Uh a lot depends on how rapidly we indigenize the supply chain. Uh at this point, all the actions of the government seem to indicate that that is an important important priority for the government.
58:27 Uh and I'm glad that it is. So I feel that we're going to develop a domestic supply chain on the manufacturing side relatively soon and that's why I said within 10 years we will have a lot of that set up in India. Uh I I think um you know this government is moving very very fast in that direction and you know I talk to everybody in the government um you know from chief ministers to people in the central government uh across ministries bureaucrats ministers and I hear a very consistent messaging from all of them and that messaging is very clear that we want to be self-reliant >> that atmander bha is not just a buzzword it is something that has to be delivered especially in our sector >> and that vixit bharat comes along with energy at Bharas as
59:12 well and that means a full supply chain and if you look at the prime minister's latest 15th August speech where he talked about the STAR one of those was developing the green economy and making sure that we are energy self-reliant. >> So that's the direction clearly of travel and that's I must say I'm very I'm glad that that is the case. But isn't it for us wouldn't be a double-edged sword like today we are dependent on the fossil fuel which is the America side we are we are focused on making ourselves more electricity dependent and then electricity we are focused more on renewable energy okay but that gets us closer and more dependent on China because the supply chain they own as of now so as more and
59:59 more we get more electrified trade, we'll be more dependent on China. >> No, but this is where we have to play a very delicate balancing act. >> Today we're already dependent on the fossil fuel countries. >> Yeah. >> Right. Uh but as I said, at least there are many of them and many of them are our close allies. Here there's a dependence on one country. So while we move in that direction at the same time, we have to develop the supply chain. The two have to go hand in hand. >> Okay? >> You cannot just do one or the other. They have to go together. Otherwise it's not going to have to build our own capa capacity and capabilities 100% of >> the entire supply chain that we spoke about absolutely >> from research from rare earth% yes we have to there's no other choice and >> is it happening
1:00:45 >> as I said it's it's it's >> happening in the equipment and research as well that's the question >> not to the extent that it needs to happen but I am 100% convinced that it that it it uh it will happen. Uh I think the government deeply understands that as well. And look, this is not a government effort. This is not a company by itself going and doing something. This is a collaborative national effort >> that government and the corporate sector and in fact even ordinary consumers all of us have to work on it together because you know the consumer has to buy the electric vehicle. >> Yeah. and they have to say I'm going to put up my own solar rooftop and I'm
1:01:31 going to have my own batteries and I'm going to go in that direction because apart from energy self-sufficiency and everything else is also pollution in northern India which as we know is a endemic problem. So consumers have to make intelligent choices that take us in that direction. Corporates have to do the hard work of creating supply chains going out there investing a part of their profits on R&D which Indian corporates notoriously are not good at doing okay because of the reason why we are very here and now people okay >> you invest in R&D >> we try to and I've just told my people we got to do much more of it okay but I don't know that capital markets reward R&D investing uh because necessarily it's
1:02:16 >> a problem Right. That's the that's the problem. >> The whole problem of every corporate and conglomerate including you. Now >> we don't have a culture and we need to have a much better culture of R&D investments of getting into capital equipment manufacturing. We need young entrepreneurs to get into ancillary industries, service industries around the whole glean techch. >> Why don't you do it? You you understand the need for We are doing as much as we can. We are investing almost uh Renew is investing almost $2 to3 billion of capital every single year >> in research. >> Not in research. No, I'm talking capital. >> No, not infrastructure investment. I'm talking about research. >> No, no. So as I said now look 15 years
1:03:03 you know we first went through as renew as a phase was phase of in the first three four years of survival to prove that we had you know we could do what we could do. Then we had to go through a competitive phase where we had to demonstrate that we could execute better than others and we became number one in 2017 till about 2023 24 we were number one now we're number two. Um it's a very competitive market out there boss we got to fight every second and every step of the way. It doesn't leave a lot of time
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