In a world where sustainability and environmental concerns are taking center stage, renewable energy has emerged as a game-changer. India, with its ambitious renewable energy goals, has seen a remarkable transformation in the sector over the last few years. To delve into the nuances of this evolution, we had the privilege of sitting down with Vivek Subramanian, an industry veteran and the co-founder of Fourth Partner Energy. In this enlightening conversation, Vivek shares insights into the changing landscape of renewable energy in India from the perspective of a company deeply rooted in the sector.
Investment in Renewable Energy
Vivek Subramanian starts the conversation by emphasizing the significance of thinking like an investor when it comes to renewable energy. Unlike traditional industries, renewable energy requires a unique approach. Companies must consider the creditworthiness of the industry they’re investing in and evaluate its future growth potential. This approach reflects a shift towards treating solar and renewable energy as viable investments rather than mere energy sources.
ESG Goals and the Corporate Shift
The discussion then shifts towards the impact of corporate sustainability and ESG (environmental, social, and governance) goals on the renewable energy sector. Vivek acknowledges that today’s corporate landscape is vastly different from what it was a few years ago. Corporations, both large and small, are increasingly looking to invest in green energy to meet emission standards and ESG targets. This shift in corporate mindset has significantly benefited businesses like Fourth Partner Energy.
Changing Dynamics and Competition
As the conversation progresses, Vivek discusses how the dynamics of the renewable energy market have evolved over the years. He highlights the growing competition in the industry, with more players entering the market, including big corporations. This change reflects a broader trend of organizations recognizing the long-term sustainability of renewable energy. The corporate sector, in particular, has become more educated and sophisticated in its approach to renewable energy procurement.
Vivek emphasizes the importance of delivering value to customers in the renewable energy sector. As corporate clients become more demanding, suppliers must focus on providing high-quality services and ensuring the uninterrupted generation of renewable power. This shift has resulted in healthier, more aligned contracts where both parties are invested in maximizing the plant’s efficiency.
The Changing Face of the Utility Scale
Shreya Jai, the interviewer, raises the question of how the utility scale and decentralized solar sectors have evolved. Vivek explains that policy limitations have hindered the growth of on-site renewable energy. However, open access, allowing off-site renewable energy supply, has provided a pathway for utility-scale players to enter the corporate market. Utility-scale solar is not disappearing but is now complemented by a growing corporate and industrial (C&I) sector.
Democratizing Renewable Energy
Shreya inquires about the availability of renewable energy solutions for retail customers and smaller establishments. Vivek envisions a future where renewable energy becomes more democratized, reaching homes and smaller businesses. Policy changes have allowed for open access for smaller consumers, making it more accessible to a broader range of customers.
The Role of Finance in Renewable Energy
Discussing the financing aspect of renewable energy, Vivek reveals that Fourth Partner Energy primarily operates as a financing vehicle. Securing capital, including equity, project finance, construction finance, working capital, and receivable financing, is crucial for the company. The shift towards ESG mandates among financial institutions has made renewable energy projects more attractive. The availability of domestic capital for renewable energy projects has increased significantly, reducing the reliance on international financing.
India as a Renewable Energy Beacon
Vivek also highlights India’s growing importance as a manufacturing hub for various industries. Many global corporations are setting up manufacturing facilities in India, and they are making renewable energy a prerequisite for their investments. This strategic shift in the market bodes well for renewable energy, with financiers recognizing India’s potential to become a significant renewable energy player on the global stage.
The conversation with Vivek Subramanian sheds light on the remarkable evolution of renewable energy in India. The sector has transitioned from being a niche market to a mainstream investment opportunity. Corporations are increasingly recognizing the value of renewable energy in achieving their sustainability goals. As India continues to transform its energy landscape, the future holds promise for a more sustainable and greener nation. The renewable energy sector is not just an energy source; it’s a dynamic, customer-centric, and finance-driven industry poised for further growth and innovation.
(Access the complete interview by tuning in to the TIEH podcast available on our website and other major podcast platforms.)