Post Pandemic Scenario for Utilities
- Jun 5, 2020 10:15 pm GMT
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The total installed capacity in India as on March 2020 (CEA) is 3,70,106 MW of which 2,30,600 is accounted by thermal (Coal, Lignite, Gas-10.8% and Diesel). Hydro’s contribution being 45,699 MW, Nuclear 6,780 MW and Renewables 87,028 MW. Electric power is the backbone of economy and sustainability and more importantly for India as it aims to achieve 175 GW of clean energy by 2022.
Saubhagya Yojana aiming electricity across 30 million consumers to the network and billing will perhaps have an impact. There is also a proposal to involve private entrepreneurs in distribution and retail supply in the hope to enhance customer experience, revenue increase, and curtail loss. The distribution network may undergo structural reforms in providing customers a choice to select their retailers.
It is also conscious of its commitment on emission norms and investments on modern equipment like FGD seems on course as well. In addition, smart appliances and demand response through grid interactive equipment are opportunities among industries, buildings and municipal sectors. Energy efficient cooling technologies in industrial, commercial and space cooling application will gain more importance. Implementation of building codes and digital integration will be the focus in the building sector.
The post pandemic scenario is likely to be entirely different from the one already envisaged either in late 2019 or early 2020. Digital technology (cyber security, cloud computing, robotics) is emerging world over that may transform power industry in the decades ahead.
Energy sector seems to be seriously weighing the options of Hybrid generation rather than stand alone. The statistics show that about 4.6 GW of wind, gas, oil and photovoltaic with another 14.7 GW of immediate development and another 69 GW long term is proposed. In fact, some of the countries had totally turned to renewables and become independent and solar seems to have contributed to 20% in 2019. Although wind has not gained so much initially in 2020, it is likely to progress well if projections are to be believed. Locating generators and batteries at one place seems to benefit interconnection and permitting costs, capture clipped energy and also take tax credits. Contrarily, there is an opposite view on putting them together as well. The success of hybrid plants which are economically attractive seems to be location dependent and future wholesale pricing.
When we look back to 2019, it was the year of peak greenhouse gas emission and couldn’t have curtailed to this level despite our best efforts – 1% forecast for 2020 has outgrown to almost 8%. If this trend continues for the next 10 years, we will probably reduce 1.5 degree warming limit globally. In view of millions working from home (deserted roads) and fall in industrial output, air and noise pollution reduction could not have been more encouraging.
Cyber security assumes a greater dimension to protect grids and ensure uninterrupted power supply. Data analytics for load forecasting, generation planning, managing peaks and increasing customer energy efficiency awareness would be extremely important for the power sector in planning proper network. The global focus has shifted from the original schedule in view of the pandemic impact to Electric vehicles, Digitalization, Grid-scale battery storage, micro grids and corporate PPAs.
This will burden the power sector for an uninterrupted power supply and environmentally benign power generation. Electric vehicles would attract charging station infrastructure and therefore the collaboration between them is vital. Similarly, there is a greater digital participation than seen a couple of months back as many sectors – Corporates, Small and Medium Entrepreneurs, Hospitals, Airlines etc. intend adopting this technology more profoundly to avoid delays and quick revenue recovery. Similarly, smart gird has been contemplated in view of the storage installation among renewable generators, grid operators and distributed generation.
Battery energy storage through Lithium-ion would save the current predicament on finances and failure - this would be identical for electric vehicles. Power storage is providing a greater confidence across many sectors. Many countries have taken lead in this regard and even India has published energy storage mission and hopes to become market leader in battery manufacturing.
Remote area electrification demands micro grids and have been extended to projects of even 100 MW which may soon become the trend. Corporates who need assured power supply are signing up Power Purchase Agreements (PPAs) and surprisingly, they are with renewable energy generators. In a way this is to ensure proper data storage uninterrupted. This arrangement provides a great opportunity to sell power profitably.
The progress on solar films for windowpane will facilitate residents not only to generate the power required by them but perhaps share it with grid as well. Low carbon sources are likely to account for 40% global electricity generation this year. It solely depends on the government to maintain this trend in future.
If we take appropriate corrective measures NOW, there is a guarantee that we could be better prepared for these climate/nature or pandemic related encounters? World Business Council for Sustainable Development (WBCSD) may have to revisit their original report of 2010 and revise the report in order to arrest a question – Am I prepared now to shocks? Environmental, Social and Governance (ESG) integrated with investment analysis would provide long term performance advantages. UN Global Compact (UNGC) in this regard seems to have core principles (companies of all sizes) and a tool to develop business strategies and practices linked to Sustainable Development Goals (SDGs).
While considering the basics of social foundation which is surrounded immediately by ‘safe and just space’ and capped with ecological ceiling (land conversion, freshwater withdrawals, biodiversity loss, climate change, ozone layer and other interrelated aspects) it is prudent to act smartly and sensibly.
If we have to embrace this uncertainty and discomfort, we need to think hard experimenting new economic and political models; identify opportunities and find appropriate solutions and orient ourselves to the true definition of sustainable development.
The blue print of the new design preferably should address Governance, Integrity, Risk intelligence, holistic strategy, equilibrium in performance, crisis preparedness clubbed with innovations for the future.
In addition to the specifics related to power sector, the following statistics provides some insight into the kind of post pandemic business boom that is likely:
EDUCATION (about 993 universities; 10,725 standalone Institutions and 39,931 colleges)
BANKING (18 public sector banks, 22 private sector banks, 46 Foreign banks, 53 regional rural banks, 1,542 urban cooperative banks and 94,384 rural cooperative banks)
HEALTHCARE (about 16,000 hospitals are empanelled under the scheme of which around 50 per cent are private sector hospitals. Under Ayushman Bharat, the government had also initiated a programme to set up 1,50,000 health and wellness centres (HWCs) by 2022.)
HOTEL (SELECT: 8034 hotels in Goa; 7692 in Delhi & NCR; 3391 in Mumbai; 3979 in Bengaluru; 2447 in Chennai; 2080 in Kolkota; 1135 in Pondicherry; 2292 in Jaipur)
CORPORATES (Out of the total number of 17.79 lakh registered companies in India, 5.43 lakh were closed as on 30 June and 1,390 were classified as dormant.)
The above outline provides just a tentative outline of the scenario during the post pandemic period but, could be more complicated in reality.
Digital life could be interesting for the current generation and to some extent even the age group between 45-80 years, BUT, definitely it will be difficult for those who are past 60 and the children are not around
In view of the paradigm shift (physical to digital) in the customer demands, utilities need to re-orient themselves to meet them exceptionally well in order to stay competitive. The range is very wide – mobile, desktop, iPad/tablets. Digital alone provides almost three times advantage over traditional services.
The major shift has been from physical interaction to texting, chats, responding multiple phone lines and many more. Internet marketing funnel (an upside down pyramid) as it is popular today tells you the true customer retained by you after screening through the hierarchy of the pyramid and also provides the weaknesses of the elements that has gone into the pyramid hierarchy (Landing page; Front-end offer; upsell offer; downsize option and keep it going). There is no need to get disappointed as the initial response may not be that exciting but, over a period of time and fine tuning you would be convinced that this gave you a better business than the traditional system