Goyal “most important individual for the future of energy”
A very interesting blurb from “Energy Source”, the weekly newsletter from Financial Times US Industry and Energy Editor Ed Crooks, in which he suggests that MNRE minister Piyush Goyal is playing a central role in the global clean energy transition. He writes:
At the FT’s Energy Transition Strategies conference in London last week, one of the most arresting lines came from Kingsmill Bond of TS Lombard, the investment research group. Asked to name the most important individual for the future of energy, most people would probably name Elon Musk, he said, but in reality it was Piyush Goyal, India’s minister of state for power, coal, energy and mines. The argument is compelling. Mr Musk’s Tesla, while undeniably exciting, is still a niche player in the global car industry. Mr Goyal is shaping the energy future for an economy of 1.3bn people.
India’s population is expected to overtake China’s soon, if it has not already done so, and its economy is forecast to be the world’s third-largest by 2030. But while China is already the world’s largest investor in renewable energy, India has lagged behind. The International Energy Agency has forecast that over the next five years, India will raise its coal consumption by more than any other country, and its oil consumption by more than any other country but China. Over the longer term, it is expected to become a bigger contributor to oil demand growth than China.
Mr Goyal’s policies, including support for renewable energy and an ambitious plan for all car sales to be electric vehicles by 2030, appear to be changing that outlook, with potentially disruptive consequences for fossil fuel industries worldwide. In an interview with the FT last week, he set out his vision of the industrial opportunity for India in batteries and electric vehicles, while defending its continued investment in coal power, on the grounds that “every country needs a baseload.”
His support for coal plants, albeit ones using modern lower-emitting technologies, is a sign of the continuing uncertainty in India about the pace of the shift from renewables to fossil fuels. A week ago, the government published plans to tax parts for solar power systems more than twice as heavily as coal. That plan was swiftly abandoned, but concerns remain that the Indian solar market has become overheated. Another potential obstacle emerged last week, when Mr Goyal set out new restrictions on foreign companies investing in India’s power grid, which are expected to affect Chinese businesses in particular. In a letter to the FT, Sebastian Nokes of Aldersgate Partners, which has been investing in the Indian energy industry in recent years, warned that corruption was a problem that had “caused a huge misallocation of resources”.
For all its challenges, however, India has compelling reasons to curb its reliance on fossil fuels, including its dependence on imported oil. Dharmendra Pradhan, Mr Goyal’s ministerial colleague with responsibility for petroleum and natural gas, went to Opec’s home in Vienna last week before the cartel’s ministerial meeting, to deliver a message about India’s growing influence as an oil consumer. He also gave an interview to the FT, and said India was looking at buying oil from non-traditional but “very competitive” suppliers including the US and Canada, as well as embracing the “disruptive technology” of renewable energy.
