Wires, Transformers and Knights of the Grid | ft. Pratik Agarwal

[Podcast intro]

Welcome to the season five of the India Energy Hour podcast. This podcast explores the most pressing hurdles and promising opportunities of India energy transition through an in depth discussion on policies, financial markets, social movements and science. Your hosts for this episode are Shreya Jai, Delhi based energy and climate journalist and Dr. Sandeep Pai, Washington based energy transition researcher and author. The show is produced by 101 reporters, a pan India network of grassroots reporters that produces original stories from rural India. If you like our podcast, please rate us on Spotify, Apple Podcasts or the platform where you listen to our podcast. Your support will help us reach a larger audience.

Since the dawn of the Electricity Act, 2003, India’s power transmission sector has undergone a transformation during the last two decades. The gates of the sector were open for the private sector, which brought with it investment and innovation. While the private sector continued to face the challenge of competing with an almost monopolistic government organisation, it has been able to grab a sizeable share while also bringing the cost down.

And just like any other part of the electricity supply chain in the country, the power transmission sector also stands at the cusp of another transformation with the advent of large-scale renewable energy and new energy solutions.

To understand the growth of the country’s power transmission sector and what its focus areas are and how it is evolving along with the ever-changing landscape of the power sector, we talked with Pratik Agarwal, managing director of Sterlite Electric and chairman of Resonia. Agarwal has been one of the early movers in the power transmission sector and has a diversified portfolio of businesses in power equipment, manufacturing, renewable energy generation, and allied businesses.

[Podcast interview]

Shreya Jai: Hello and welcome to The India Energy Hour Pratik and I’m very delighted to have you here with us. We have followed your work. We have followed all that you have been doing across the power sector for quite some time and some very exciting things that you have done in the country, outside the country. And we were wondering if you could come and talk about the work that you’ve been doing. So very excited to discuss this space, which we also agree we have not covered much. It’s only recently that we have through a special series. But again, very happy to have you here with us.

Pratik Agarwal: Thank you so much, Shreya. You and I know each other for a long time and it’s my pleasure to be here. And it’s always a delight to talk about the amazing transformation that’s happening around the world, in our country, in our sector. It’s a really exciting time to be in the renewable energy sector and the associated industries. And it’s my pleasure to be here with you.

Shreya Jai: Thank you. We’re meeting at a very opportune time, at least for your group of companies. You recently went through this whole rebranding exercise and you have diversified, divided your different business interests into different companies. Please get into that. But before you do that, can you tell us a bit about yourself? How did you start Sterlite, which is now re-Christian into another company altogether? You know, you come, if I may mention, so you come from a family company, which was mainly into minerals. So for someone to just go into power transmission, which is completely so different. How did that happen? And tell us about your journey, your education, everything.

Pratik Agarwal: Sure, sure, sure, sure. Let me do that. So how did these ideas come about? And, you know, how did I get into power transmission? You know, I wish there was a, you know, a very good story behind this, which talked all about how we conceptualize the strategy and executed on it. But as perhaps you heard from many entrepreneurs, that most such things happen from pure chance and pure luck. And, you know, serendipity is the right word, right? So that’s exactly what happened. To give you the specific story. So even before our family got into mining, minerals, metals, et cetera, the original business that my grandfather and his two of his sons were into, actually in Bihar, was manufacturing power conductors and steel wires. So we have been an associated business back in the day. And that’s actually how we eventually decided to backward integrate into metals and ultimately became a large metal mining giant, which is now called Vedanta Limited. But the power conductor business stayed with us. And the government of India decided that they want to bring this new concept of tariff-based competitive bidding, where private players can build on and operate transmission lines, something that had never been done in India before. And frankly, hadn’t been done in 90% of the world before India tried it. So at that point in time, the government came out with a few of these RFPs. And there was such little interest in this idea that, you know, they almost called us and almost requested us that please at least buy the RFP because, you know, even if you don’t want to bid, because we can’t go back to the central government and say that nobody has bought a single RFP, right? So we had no option but to spend the few lakh rupees and to buy the RFP in 2008. And from there is the beginning of this power transmission company that was born. You know, tell you a bit about my story. So, of course, I’ll tell you in brief, but it was very challenging. We won our first project in 2010. We knew absolutely nothing about how to build these complex transmission systems. It’s one thing to manufacture a conductor in a factory. It’s another thing to build a complex line in a very difficult part of the country. Our first project was in the northeast connecting different places in Jharkhand and West Bengal and Assam all together in the chicken neck area. And we faced every single challenge that one could imagine. So before I go further into the story of the business, let me tell you a little bit about myself and, you know, my own life. So I grew up in Pune, actually, most of my childhood. I went to a subsidized school. And then somewhere for high school, I had a chance to go abroad and study in a boarding school and in an international school. So I finished my 12th in an international school in Singapore, where I learned how to live with multicultural environment and really, really live in an international environment and understood different cultures and how they work. So that was really a transformational year of my life and perhaps made the most impact on my on my life. Those four years in international school. After that, I got admission into Wharton Business School, which at that time and perhaps still is the world’s number one business school. And the funny story is that I never wanted to do business. I wanted to be an engineer. But because I got into the Wharton Business School, I had no option but to say yes and go there. And then I spent three years there. Again, incredible opportunity and, you know, learning from the best. I remember learning about finance and corporate finance and options and futures from people who had literally invented options and futures. So to get that firsthand was an amazing experience. But it’s also incredibly competitive and, you know, something that I didn’t find as good about the cutthroat American university culture. But nevertheless, I learned a lot from that. Post that, I came back and I worked in a hedge fund in London. And then I worked in the Vedanta group in different businesses for a year or two. And after that, I went back to London, got an MBA for two years. And since then, in 2008, I decided to start this infrastructure vertical. So that’s my story leading up to, you know, 2008. And since 2008, 2010, until today, 2025, I’ve had the incredible pleasure of building three businesses. The one that I’ve, you know, some that I built from zero, which is the power transmission business. And I’ll talk more about that, you know, perhaps in your next few questions. I got a chance to take over our cable and conductor business and then grow that. Now grown to about four times the size. And recently, I got a chance to build Syrentica Renewables, which is our newest business, but also perhaps very, very exciting. It’s not the most exciting, where we are building round-the-clock renewable assets to decarbonize, hard-to-abate fossil fuel intensive industries in India. All of my businesses have a common theme, which is supporting the decarbonization mission that the world is on, that India is on. And my personal, my life dream is to be able to make a measurable impact on stopping climate change and on reversing climate change. And to play my small, tiny part in limiting global warming to two degrees. So I get a, you know, I’m very, very excited and very proud and very grateful that I get to work on this noble cause on a daily basis. And at the same time, make money for shareholders. Both are very important.

Shreya Jai:  Absolutely. But I wanted to ask, why choose cable conductors and transmission? You know, there were so many verticals that would have been available otherwise in the family company. And also given that, given your educational pedigree, you could have gone into any other business that those were the years of startups and dot-com and whatnot. So why this?

Pratik Agarwal: Very, very good question. In fact, I have faced the same dilemma when I just come back from business school in 2008. Most of my friends were doing banking, consulting. Some were doing tech startups. You know, many of the large startups were born around that time, you know, and many of them are my friends right now. You know, I grew up, of course, in the family which, you know, which built between 1980 and 2000, India’s largest metal and mining conglomerate and among the top 15 in the world. So I experienced firsthand what it takes to build these hard assets, right? Whether it is copper smelters, aluminum smelters, zinc smelters, power plants. I experienced that firsthand. When I was studying in London Business School, I got a chance to do an internship at Deutsche Bank. And that time, Deutsche Bank, like many other banks on the street, were doing all kinds of exotic trading activities, right? And which ultimately led to some of their demise. But one of those exotic trading activities I got exposure to at my internship was companies that were buying yield assets in emerging markets. In fact, Deutsche Bank itself was buying yielding assets like ports in emerging markets like Turkey and India. And then repackaging them into REITs and Inuits and making a huge margin doing that. And that’s when I learned, I was all of 26 years old, but I learned this incredible large opportunity in the world where if you can build projects that generate double-digit yield, then you can repackage and sell those yields to European and American investors at a very low-digit return for them. And that spread that you make can be in the hundreds of millions of dollars, right? So I got really attracted to the idea of building infrastructure for India because there was something nationalistic and patriotic about that. And I fundamentally like projects. But also then marry that with financial engineering and then create shareholder value by repackaging them into these financial products. When I thought about this, nobody in India was doing this, right? People who are building, you know, all large infrastructure developers were building assets. And they were amassing assets and getting bigger and bigger. And nobody had thought about recycling assets into financial products. So this is the innovation that I thought I could bring to the sector. And, you know, of course, a lot of it is luck. I don’t want to take credit for it. But we’re able to get into transmission. Transmission turns out to be the best asset when it comes to quality of annuity cash flows, right? Compared even better than roads, even better than ports. And therefore, transmission did turn out to be the best asset class to play that game. And, of course, later in 2016, I got a chance to do India’s first power sector in it, which allowed me to then repackage those assets into those financial instruments. Exactly what I’d seen back in 2007 at the Deutsche Bank trading floor. So about nine years later, I got to do exactly that, which was simply an idea and a dream that I saw in four weeks in the Deutsche Bank trading floor. So I think this is the journey. Like I said, in life, a lot of things happen by chance. You think of something and then, you know, ideas come in front of you and opportunities come. And, you know, in my case, I had, of course, a very strong education that was, you know, thanks to, you know, the vision my parents had for me. But I also had this large platform because of that, that the group already gave me and that allowed me to pursue all my ideas and eventually, you know, convert many of them to reality. So that’s in a nutshell, you know, to answer your question, you know, I wanted to do something big to help the infrastructure of the country. And I wanted to marry large infrastructure with financial engineering to create shareholder value. And somehow this small idea I had during my MBA days, I was able to see through fruition through the power transmission sector.

Sandeep Pai: Amazing. I think I have one more kind of more reflective, deeper question, which is around, you know, building anything is hard and building anything in global south is so hard. Ideas are great. Yeah. You know, anyone can throw ideas, but just as an observer in this field for so long, I just like find it that building things from regulations to environmental concerns to policy changes. And what is your strategy? If some, any junior prateek is starting now and they want to build stuff, what is like your top three kind of advice? One, I guess, is patience, but I would love to hear what would be your top three.

Pratik Agarwal: So you’re absolutely right sandeep, on the building hard assets, whether it is energy, electricity, renewables or roads, bridges, highways, airports. In the global south, exactly the way you put it in emerging markets is incredibly hard. If you ask me hand on heart, if I knew how hard it is, would I do it? It’s questionable. Now that I’ve learned it, I may as well do it because, you know, very few people have the 15 years of experience that I have. To your question on what would I advise a younger prateek, you know, who’s starting with a similar dream. Firstly, it’s a deep pockets game, you know. People who want to enter this business thinking that they will bootstrap their way to success, in my mind, is a bad idea. I’m not saying that people who don’t have the capital shouldn’t do it. I’m saying people who don’t have the capital should go and find the capital before they do it. And don’t make the mistake that they’ll figure it out along the way because building is already very hard. Building with a scarcity of capital where you’re struggling to pay your contractors, you know, the week ahead or the two weeks ahead, that is something that is incredibly hard and I wouldn’t recommend that to anybody. So this is a, you know, infrastructure and energy is a deep pockets business. If you can get, you know, so first is get the capital fully in place, equity capital in place to see through two, three, four, five years of your equity builder, of your project build out before you actually put the first brick in the ground. The second one is team and talent. Building things on the ground requires a very different DNA and capability. Like I came from finance, right? I’d never built anything in my life. I had to learn some of these things the hard way. My journey would have been substantially easier if I was able to attract high quality talent that had built difficult things. It can be anything. You could have built roads. You could have built cement plants. You could have built, you know, as long as it is large and it is, you know, linear in nature and not confined to four walls, right? Like a power plant or something. I think that was a second very important skill, you know, capital and talent. And, you know, fundamentally, policy and regulation are a very, very significant part of this business. So you can’t really be successful in this kind of industry unless you have a very strong grip on today’s policy and how it affects your P&L and your RR and also some capability of shaping policy. I don’t think without that, again, you know, it’s very difficult to really be able to because your returns are very, very dependent on policy. And you need a systematic way using associations, using all the different tools because policy shaping is only possible if you’re suggesting policy which is fundamentally good for the sector. You can never shape policy which is one-sided, which is in your interest. So you have to really be a policy advocate. You have to have a think tank type of capability in your company. And lastly, one thing that worked for me is adoption of technology. This is an area, you know, if you think of 30, 35 sectors in the world, including telecom, financials, all the big sectors, probably power, infrastructure and agriculture are the three sectors which have the least penetration of technology compared to the other 25 sectors. So if you have an idea to build, you have to bring technology very early to the game and there will be a lot of resistance. Your contractors will not like it. Your team won’t like it. And you have to build a team that is willing to embrace change and to do things in your way. So those have been sort of my three, four big learnings on how to build. But I will close with what I started and what you started. It is incredibly hard. And the last thing I’ll say is that unless you’re getting paid very, very well, you shouldn’t be doing this business.

Shreya Jai: Good. Yes, money is important. Now, I like to dwell into the topic and start with something that a lot of people have been curious about for several years. And I think several people still are, especially our audience, which is mostly students and who want to enter into power sector. Power transmission has been synonymous with power grid for several years and rightly so because they were the first company that, you know, broke when it was broken out of NTPC, a dedicated company which was there for several years. And it was only in 2008, 2010 that the private sector started entering into this segment. So I’ll first ask you to give a brief overview of how this private sector entry happened and what does the landscape looks like right now. Are you challenging power grid yet?

Pratik Agarwal: Thank you. So let’s just zoom out for two minutes and look at the world scenario. Probably. 80 to 90 percent of the world’s grids are owned by some kind of a monopolistic company. It can need not be government owned. It could be investor owned, but it is definitely monopolistic, which means that there is no competition within the transmission sector. Those countries may have competition in distribution or in generation, but likely not in transmission. Except for some parts of Latin America, India has perhaps been an absolute pioneer in this area of bringing competition to transmission. And in my view, when we will look back at the success of the Indian electricity story, let’s say 10, 20, 30 years from now, and the success of the Indian story in terms of integrating renewables and still keeping power prices at, you know, amongst the lowest in the world. If India succeeds and all that, which I believe it will, I would say privatization or transmission will deserve credit, at least in the top three of what deserves credit. Right. I think this is one of the most pathbreaking moves India has done, because if you read any newspaper today, you talk to any renewable CEO in the whole world today, and you ask them that what is your number one challenge to scaling your renewables business or your generation business is very high likelihood. They will say that their challenges lack of a transmission grid. And the fact that there isn’t enough transmission capacity available at a time that I need that transmission capacity. Now, if you go back to any shortages in India or around the world, be it lack of airlines, be it lack of mobile data, broadband, if you think of how the shortages were reduced or eliminated, actually privatization and competition has been an answer to most of those. Look at the airline days 20 years ago, look at where India is today. Look at mobile 20 years ago, see where India is today. Look at data. Look at airports, right? All of the answer has really been bring in competition and the monopoly. And then the works of competition will do what they need to do to create high quality customer experience at a low cost. So why shouldn’t transmission go the exact same way? If the lack of transmission capacity is a single biggest challenge facing the penetration of renewables in the world, then transmission should be privatized. It should be opened up. May the fittest win and may the best survive. So I think for the Indian government to take this decision back in 2008, you know, before any of the developed countries in the world were doing this, I think it’s a pathbreaking move and something that will go in the history books as one of the best things India could have done to create a vibrant power sector. Like anything, change is slow. So it has taken almost close to, I would say, 10 years before the transmission sector has been fully open to competition. For the first 10 years, majority of the projects were still awarded on nomination basis to the state-owned incumbent company, the CTU company. And over time, the number of projects that were given to them were reduced and the balance projects were brought on the tariff-based competitive model. Today, I would say 90% of projects are awarded on tariff-based competitive bidding. And there are at least 10 companies in the country, including the large government-owned company, which are participating in these auctions. There is healthy tension. Companies are, the way that some parts of the document are designed, that companies are constantly innovating on how they can build cheaper, faster, better. And because of this, the country will perhaps have, already has today, I think, one of the best transmission national grids in the world, where you can inject power in any part of the country and draw on any other part of the country. And the cost of that transmission is very, very small compared to most parts of the world. So I believe this is a result of opening up a very difficult sector to open up. So that’s in a nutshell how the sector is doing. I think, specifically talking on PGC-IL, PGC-IL is one of India’s best-run PSUs. It is one of the world’s best national transmission companies in terms of how innovative they are, despite being a public company or a government-owned company and the amount of transmission they’re executing. At the same time, one company cannot deliver on the grid needs of the world’s largest democracy. It’s simply not possible. And that’s where companies like Rizonia and many of our other colleagues and competitors come into the question. And we all have our part to play. You know, we have our own skill set. There are certain types of projects where we do better than our competitors and vice versa. And I think there’s a lot of, you know, the story has just started. The next five, seven years, India will be awarding more transmission and building more transmission than perhaps any country in the world, with an exception of China. And I think the private sector has a very strong role to play. And I believe the private sector will build at least half of all new transmission builds that will be built in India. So, yeah, overall, a great start, a very good transformation. And the results are, you know, will be seen in the coming years.

Sandeep Pai: Great. Just a quick follow-up. If you can just kind of describe the role and share and USP of Sterlite in this market, I think it’ll be really helpful for our audience.

Pratik Agarwal: Sure, Sandeep. So, like I said, Sterlite has been in this business since 2010, ever since the first project was awarded on the tariff-based competitive bidding model. Since then, Sterlite has won somewhere around 15 to 20 percent of all projects that have been awarded to date. We, and by Sterlite, I mean Resonia. So, sorry, the name has now changed to Resonia. So, Resonia, the core skill set of Resonia is going after complex projects. India is a diverse country. The challenges you see in Kashmir, in the north of India, or in the Himalayan ranges, or in the northeast of India, versus challenges you see in Gujarat or Maharashtra or in the south are all very, very different. Some parts of India are slightly easier to build. And some parts of India are very difficult to build because of terrain challenges, population, and, you know, various things. Over time, Resonia has built a core capability in doing complex projects. For example, in 2016-17, we completed India’s largest transmission project in Jammu and Kashmir. We did this using heli cranes imported from the U.S., which were able to do a complex mountain extension of that project, which was virtually impossible to do any other way. Similarly, we’ve been introducing drones extensively in the way we execute projects so that we reduce the amount of damage caused to crops, and we can increase it throughput three or four times. Many more technologies that we’re going to unleash in the next few years. So where there is a time constraint, where there is a terrain constraint, where there is a technology constraint is where Resonia tends to do well. And in return, Resonia also, I believe, makes a higher return on capital compared to competition because of the unique value proposition it brings to the table compared to what competition can bring. So that’s, in a nutshell, the core competency and the USP of Resonia.

Shreya Jai: Yeah, thanks for explaining that, Prateek. But I also wanted to understand, you know, you take up challenging projects, but that means that the existing challenges that infrastructure projects face in India are multifold in your case, be it right of way, be it the Telegraph Act and things like that. Something that you have been trying to change by asking the government for policy changes, but things have been moving slow. What about these challenges? Has it improved in all these years that you have been operating? And if not, then what needs to change?

Pratik Agarwal: Yeah, great question. So, by definition, transmission execution is perhaps the most challenging sector of all infrastructure sectors when you compare them to renewables or distribution or roads or any other sector that I can think of. And the core reason is when you are, when a company like us has given a project to build a transmission line from point A to point B, the entire procurement of the corridor and what we call the right of way, which is typically land ownership by hundreds, if not thousands of landowners. Many of them are farmers, many of them are farmers, some are urban dwellers, as well as government-owned land or forest demarcated land or crossing of other utilities like roads and highways, bridges, tunnels, etc. All of those permissions and land consent is in our scope. Right. You can imagine how challenging that is in a democracy, even though the laws are very clear that, you know, the landowners have to give their consent. But there is no limit to how much time they can take. And that’s an extremely difficult challenge to solve. So, these right of way challenges remain the core, core challenge and the core capability as well of any successful developer in transmission, not only in India, but around the world. So, now to your question on how difficult has it been and has it improved, has it been improving or has it been getting worse? So, think of this as a race. Think of it as a race between two runners, right? One runner is a developer who is constantly trying to, you know, improve his own capabilities, such as how he deals with communities, stakeholder management, how he brings in mechanized tools to reduce the amount of labor, so on and so forth. And think of the second runner as challenges such as, you know, the awareness levels, the real estate prices. You know, all of these things are constantly increasing in the country, which means that right of the challenges are only increasing but never reducing. So, we have a constant race between the two that can our capabilities grow faster than the growth of the challenges themselves. And there is this constant tussle that continues. I would like to say that a lot of things have improved and a lot of things have gotten even harder. So, for example, the compensation that the government mandates us to pay for procuring the right of way has improved drastically. It may have gone up 5x to 10x just in the last two years and brought it to a level of parity where a farm owner who may be losing his or her, you know, who may be giving up the rights to his land for the transmission utility is now going to get paid very adequately, in my view. Something that would ideally compensate him fairly because he or she still gets to sow crops below the transmission line. And if he’s getting paid adequately, then he should be happy to allow a transmission developer to build on his property. So, I think that’s one thing that’s improved. I think the amount of mechanization and automation, you know, that is possible now in these transmission projects has gone up drastically. We are now using drones, like I mentioned, as well as cranes and many more digital tools to reduce the amount of labor required to execute these projects. So, the big challenges like right of way, like skilled labor availability is getting improved. Capital has never been a big challenge for this sector because it’s fundamentally an annuity business and there are large government NBFCs willing to fund the under construction period. And then there is a large bond market willing to fund the operational period. So, I think that’s largely in control. The challenges that have increased is, like in any democracy, the awareness levels and the amount of litigation that we see at the project, as well as the amount of opposition that we see, despite the fact that we’re paying very good compensation, has only grown exponentially year on year. Which means that the amount of risk for a developer, which means that the amount of risk for a developer like us. Because remember, we don’t get paid for a 90% constructed project, right? We could have spent 99% of a project cost, but till the last 1% is not commissioned, our risk is that we get paid nothing. And therefore, it’s a very high risk proposition. And I think the general risk profile of the sector continues to go up and to become more and more difficult to execute. And to compensate this, companies like us are constantly investing in ourselves and our capabilities on how do we do risk management? How do we isolate the risks in any project and remove the risks before they become a complete deterrent to the project? Those are some types of things that we focus on.

Sandeep Pai: Very interesting. I just want to move the conversation a little bit back to PGCL. So obviously, PGCL continues to be a central transmission utility, which I think private sector has long said is kind of a conflict of interest. Can you explain that? What do you think about that? And how does it impact the private sector?

Pratik Agarwal: I think rather than talking from a private sector standpoint, I like to talk about this from the country standpoint. Like I said in the beginning, grid capacity and timely creation of grid capacity is the single biggest parameter which will determine whether countries are able to change their energy mix to green energy in time and able to provide enough power to citizens, given the growing need of electricity, such as AI, data centers, heating, cooling, etc. Now, when if creation of grid capacity is so important, then every country in the world and India, let’s say, should want a thriving industry, which has multiple players, where each player is able to constantly, you know, do well and reinvest in its capabilities and grow. So that in time to come, India has not only three, but five, seven, 10 very capable large companies who can meet India’s requirement on grid capacity creation. Now, this kind of a thriving ecosystem is only possible when there is some kind of a level playing field between parties. If you have one company which is, you know, close to 50 years old and has a four lakh crore legacy balance sheet, and then they’re able to, you know, use that balance sheet and their cloud with the suppliers, you know, to then claim a disproportionate share of the market. Then it becomes difficult for some of the smaller players to survive and to grow. And in my personal view, you know, this is not good for the country. The country has to have a level playing field in a way that encourages more and more people to enter the sector. For example, today in transmission, we don’t have a single multinational player that is present in the country. Whereas if I look at the Brazil market, there are many Portuguese, Spanish, European players and British players who are present in the Brazil market. So why don’t we have a, why don’t we create a system which allows all of these global players to come and build in our country and improve the grade of our country, as well as bring their know-how, their capabilities and their capital, right? So this requires a general feeling that the country is fair, that one large dominant player, you know, is not able to corner the market and get, you know, a lion’s share of that market, leaving only leftovers for everybody else to, you know, to sort of enjoy. So I think that’s the general push the industry has had, that let’s keep the, that the government of India has done a phenomenal job in privatizing the sector. Now let’s make sure the private sector can actually survive by ensuring a level playing field. That’s not, I think that’s been the plea from the private sector.

Shreya Jai: Right. Thanks. Thanks for explaining that. And I’d like to change the gear a bit and come back to something that is very hot topic these days, which is the emerging mismatch between renewable energy generation and transmission. You know, we see such variety of numbers coming in about so many transmission projects languishing because their corresponding generation projects has not come or vice versa. And then there is some mismatch in the planning as well. So if you can explain the situation on ground, you know, how and why did this challenge emerge? Because we thought this was something synonymous to the thermal sector, something that happened eight to 10 years back. But the same story, deja vu seems to be happening in renewable energy sector. So can you explain that?

Pratik Agarwal: Sure, sure. I think this has, firstly, let’s talk about the ground situation. Yes, you’re right to say that there is a lot of renewable capacity that is chasing transmission capacity and there is a mismatch between the two. But compared to many other parts of the world, India is not doing so badly. There are parts of the world where today for a generating company and you apply for transmission, you may not get it even in five years time or seven years time. Whereas in India, there’s a good chance that you could get it in two to four years time if you apply today. Right. So that’s the starting point. Having said that, are there, you know, thousands or tens of thousands of megawatts which are waiting and likely to be delayed because of unavailability of transmission? Answer is yes. So let’s understand why. Let’s break into three parts. The first part is the planning itself. You talked about thermal. Now, a thermal power plant or a hydro used to traditionally take three to four years to build. It used to take about a year or two for land acquisition, coal linkage, financing, and then about two years for construction. Renewable plants, on the other hand, take about half the time. After you’re able to secure the land, you can build a solar plant in anywhere between eight months to 12 months. Similarly, if you secure the land for the wind, you can probably build the wind asset in about six to 12 months. Which means that if you start building the generation and the transmission at the same time, that’s too late. Transmission has been used to a three to four year cycle. Right. Most transmission companies and the sheer amount of efforts needed to build a transmission project really cannot be done in less than three years. And depending on the terrain, it can take more time than that. So I think the country has taken time to adjust to this new reality where it is not enough to build, to start building transmission on time. They actually have to start building transmission one or two years ahead before a generation request even comes. Now, this is something why the GNA was, you know, created and many good ideas were there. But I think many of them haven’t seen the full fruition of those ideas. And till today, transmission is still lagging generation. The second point is that the actual construction of a transmission line is significantly more challenging than the construction of a generation project. Because of the right of the challenges I mentioned earlier, which have resulted in multiple delays in transmission projects. Today, if you go to the CA website, you will find that 90% of projects are delayed. The delay is between six months to two years, somehow even more than two years. And without any exception, the delay will be somehow linked to a right of the challenge or a project-related approval. Right? So these are external to them. And now I’ll come to the most live and the most current problem. So let’s say, hypothetically, you have solved the planning problem and you have solved this mismatch problem. You’re still left with a new problem, which is that because transmission, the renewable generation projects are situated so far from the consumption. For example, most of the renewable generation is coming up in Western Rajasthan, Western Gujarat. And most of the consumption is scattered across the country, north, south and east. Because of this, the grid planner and because of the intermittency of those renewables, the grid planners can no longer build AC lines. They have to build HVDC lines to manage the grid in a smooth way. Now, HVDC as a technology is fundamentally not available in India. It is controlled by two or three Western companies and by a bunch of Chinese companies. The lead time of HVDC is as much as 48 to 60 months today, which means that if I’m an HVDC transmission project, even if I build my line on time, the terminals will only get supplied in four years. And if I’m a generation project whose connectivity is linked to an HVDC project, then my connectivity is only going to be given to me in four to five years time. Which is, by the way, what every generation company today is facing. If you’re a generating company and you want more than 500 to 1,000 megawatts of connectivity, there’s a very high likelihood that you’ll be given that connectivity in 2031 or 2032. And the biggest reason for this is the lack of an HVDC supply chain ecosystem in India. So, the whole renewable story of the country is not dependent on how quickly can we solve the HVDC supply chain problem. For that, we need to create the ecosystem in India. We need to incentivize Indian companies, give them PLI schemes, give them capital subsidy schemes. But temporarily, we also need to partner with some of our neighboring countries who actually have the technology and are able to supply in only two years time and not in the four or five years time that some of the Western countries are currently seeking. So, this has become a very nuanced issue, but it’s the crux of the issue. That long-distance transmission needs HVDC and HVDC today has a five-year lead time. Solving that is the most important thing that the countries with planners can do to make sure that the mismatch reduces.

Sandeep Pai: Fascinating. So, I mean, now that we are talking about something that has a global supply chain, I’m curious if you have thoughts about the current geopolitics of tariffs and, you know, like the whole situation of tariffs that U.S. has imposed and the dealings with China and whether that will have even more implications on this in terms of procuring. Not just HVDC, but overall portfolio of, you know, renewables, generation, transmission, etc.

Pratik Agarwal: Yes, yes. So, as far as the power sector, see, the tariffs are definitely painful for any export-driven sector, especially textiles, jewelry, etc. I think there are people in the power sector who have focused on U.S. exports, but that number is far and few in between. In general, my personal view is that in some ways the tariffs are either neutral or mildly positive for the Indian power sector. Because a lot of people who can no longer export to the U.S., including Indian companies, now have no option but to perhaps head to a large market like India. And this could benefit Indian pricing and could it benefit Indian supply chain, including places like China, right? So, actually, I think it is mildly positive only for this sector. I’m not saying for the country. It is definitely negative for the country. But for this sector, it is mildly positive. Unless, of course, you’re a plant whose focus is to export to the U.S., in which case you’re definitely hit quite hard. So, that’s my overall view on tariffs. Now, of course, if you’re going to ask me what will happen to tariffs and what will Mr. Trump do, I absolutely have no idea. And that’s a whole other podcast perhaps for another day. But we are watching every day. We hope that this is a, you know, mild fight between a few grown-up boys and they will fix it eventually, right? That’s really our hope and desire as an industry.

Shreya Jai: But what about the supply chain problems that have emerged because there were trade business restrictions with China? Has that eased off? And what is the outlook looking at right now?

Pratik Agarwal: No. So, that’s a great question. I think as per the government directives, any project which is a public procurement project, which includes transmission, cannot have components sourced from China. And that has led to, and is leading to increasing supply chain bottlenecks in items like transformers, perhaps insulators, reactors, inverters. And the biggest challenge will come from the fact that we are unable to execute HVDC projects on time, which, by the way, 50% of all new transmission projects are HVDC projects. It’s not a small number. And if that 50% is going to take four or five years to execute, then I think we are in for quite an issue in our country.

Shreya Jai: Right. Coming back to, again, grid-related issues, and you can choose to respond the way, whatever way you want to, because there seems to be an emerging problem. And stakeholders across the aisle are mentioning this. There’s too much RE in the system. The grid is still grappling how to handle with it without storage. We keep relying back on coal. The lack of battery, the lack of transmission connectivity in regions, RE-rich regions to non-RE-rich keeps coming up. And some people may call it concessions. Some people can call it mismatch. But there is clearly a problem of too much renewables that is coming in. So, technology-wise, policy-wise, how do you think that this problem can be best approached?

Pratik Agarwal:  Yeah. So, a couple of things here. It’s a very technical issue. I think, first and foremost, the sheer percentage of intermittent renewables in the end of grid is still not that large a number for us to be alarmed. If you compare it to Europe or, you know, other parts of UK or some parts of the US, right? I believe the number is less than 20%. It’s intermittent renewables, not all renewables. And therefore, it is not an alarming number yet. I think the good thing is that the technocrats and the team that plans the Indian grid is actually a very capable group of people who are forecasting and are installing power quality devices and fax devices like sync-ons, synchronous condensation, static compensation. And there’s devices that go into the AC grid to ensure that this kind of intermittency is something that the grid can handle. I think the biggest revolution that we have seen happening in front of us is a rapid decline in battery prices, something that no analyst could have forecasted. You know, how quickly batteries have declined and the numbers that were expected to happen only in 31, 32 are already happening in 26, 27. And what this means is that large installation of batteries at a very reasonable cost is now possible. And this is the reason why the central government and multiple state governments have floated very large standalone battery procurement orders, which are being, you know, which are being fiercely fought over. And I believe tens of thousands of megawatt hours of battery are going to get installed in India in the next two years, which will allow India to really reduce the intermittency of renewables and effectively make renewables look like any other source of power. I think India is very fortunate that it is growing its renewables at a time when storage is cheap, abundant and modular, right? We have the good fortune of having this perfect synchronization of our inflection point in growth of renewables and timing of this cheap, modular and scalable battery storage. A lot of that has got to do, of course, with the scale that has been built in China. So, I’m very positive, you know, I think between the way the Indian planners work, the focus on power quality management, FATs, HVDC, batteries. And I hope that with some work on demand side management, which is can consumers actually, rather than expecting power whenever they feel like it, can consumers be incentivized to actually use power when the sun is shining the most or when the wind is blowing the best? Right. As opposed to using it whenever they want to use it. And I’m sure, you know, with smart technologies and things like that, that’s definitely going to be possible. And with some amount of privatization of DISCOMS, I hope that that will also happen very soon. So, I’m bullish. I think that I don’t, I’m not as worried about grid disturbances owing to renewables as we perhaps saw in Spain recently. I think that India is, you know, well positioned to manage it. Having said that, I want to make a very important point. You know, some countries have taken the resiliency thing too far. And in order to guarantee a 99.999 availability for their people, they have spent so much money that the price of power has tripled in those economies. You know, UAE is one such example where the cost of power is so high that, you know, manufacturing is no longer viable in some of those places. So, we don’t want India to be in that bucket, right? You know, maybe it’s okay if one day out of five, seven years, there’s a blackout, right? Maybe we have to live with that rather than paying so much for resiliency that we actually make the price of power go up by 30, 40 percent. And then our manufacturing is no longer competitive. So, I think balancing between, you know, perfect availability and cost is a very important decision we need to make.

Sandeep Pai: Yeah, great. I want to end with like one kind of tech question, which is like, you know, what is the role of upcoming tech solutions like renewable energy management centers and India Energy Stock? And what role can they play for growth of transmission sector?

Pratik Agarwal: So, I’ll comment on that and I’ll comment on tech in general. You know, I think technology has pervaded every sector and there isn’t a single sector in the world that hasn’t benefited from the use of technology. I think you talked about what are largely digital technologies and those are very important. In my own view, again, if I go back to transmission, today, the number one challenge in transmission is construction technology. Today, in India, I’ll give you some numbers. In India, we use 1,600 man days to build one kilometer of transmission line. To build the exact same kilometer of transmission line, Thailand and Brazil use only 600 man days. And parts of Europe use only 150 man days. And there’s an acute shortage of skilled labor in our country, which is quite paradoxical given the amount of people we have. But that acute shortage has led to a standstill of many projects in the country today. And our ability to embrace technology and go from this 1,600 man days to 200 man days by bringing in automation in every part of the transmission build out is something that is very, very essential for us to be able to actually even build enough transmission on time. And that’s something that, of course, Resonia does incredible focus on. And I personally lead those initiatives in our company. So, whether it is digital technology like the ones you named, whether it’s construction technologies like drones, et cetera, or whether it is material science technologies, like which is the next conductive element, which can actually reduce the cost of power transmission and can reduce the corridor requirement. Like, why do we need a two-meter corridor to transmit gigawatts of power? Why can’t we do it in one-tenth of the requirement, right, which will then, you know, make construction much faster? So, I think all of these areas is something that we as a country should invest in in a much significantly larger way than we’re doing right now. There should be much larger R&D expenditures. There should be a lot more industry and university collaboration exactly in these areas. And I see, you know, because India, remember, is the world’s largest or second largest transmission market. So, for a country with such a large market, we have a chance to create our own innovation, to fund our own innovation, to own our own IPs, rather than depending on other countries and their IP. And I think this is an incredible opportunity that India shouldn’t lose. Thank you.

Shreya Jai: Great. And I think I can quickly ask what’s next for you as you’ve created now three companies. You also launched an Invit. What is next? Are you planning to enter into a new segment like you entered into RE? I think I failed to mention, and this is something that very few people know, you’re a trained pilot. Are you looking to enter into the aviation sector now that it has also opened up completely? So, what’s next?

Pratik Agarwal: Thanks, Shreya. I have many hobbies which I try and do on the weekends and keeps my mind busy, whether it is piloting planes or recently learned how to become a DJ. And that also keeps you quite sharp on your toes. So, I do that as well. I put some tracks up on SoundCloud. Anybody wants to, any of your listeners would like to find it. But what is next business-wise? You know, to be very honest with you, I get this question a lot in all my internal town halls. And it’s a very difficult answer, an answer that nobody likes to hear. But what I tell them is that the three sectors we are in is going to see 30 to 100% Kager growth in the next five to 10 years. And, you know, and we have a leadership position in all those sectors, right? We are number two, number three in SoundCloud, we are number seven, number eight. But these are all leadership positions. And it’s very difficult for me to justify why we should allocate capital or manpower anywhere else when there is such a sheer dearth and demand for transmission capacity, renewables capacity, cable manufacturing. And there is so much to do in allied spaces within these sectors. In transmission, of course, we are hopefully getting into HVDC very soon. In renewables, we started bidding on government contracts. And we now have about seven gigawatts of PPAs in hand. Four gigawatts will be operational by end of next year. And we are now offering true 100% around-the-clock renewables at a cost that nobody in the world can beat. So, you know, we have thousands and thousands of customers who are looking to switch to private supply, just like in 2000 when, you know, private operators were offering broadband. Many people switched from a government supply to a private supply, right? And, you know, all of us were part of that journey. That’s exactly what has happened in the power sector in the next 10 years. A lot of industrial and commercial customers will move away from a government supply and will seek better pricing and quality of service. And they’ll find that in a private supplier like Syrentica. And then when it comes to our products business called Sterlite Electric, that is a place where we look to allow product innovation. Today, we are making cables. We look to get into high-voltage cables, HVDC cables, submarine cables. But we also look to get into various other parts of the T&D component ecosystem. I’ll not name any because we’re evaluating all parts of it. But we will always try and remain core to our purpose, which is that, you know, we don’t just want to build another product which somebody else is doing and make a little bit more money. We really want to find which are those products which will be the biggest bottleneck for growing the power sector, growing renewable penetration in the whole world in the next 20 years. And how can we be a master in that product? So, you know, really going for audacious goals and going after new areas. So those are some things that I’m spending my time. And I have a great team in my company that helps me with some of these things. But at the same time, there is kilometers of transmission to be built every day. There are megawatts of renewables to be installed every day. And that keeps us busy. And I’m just very happy and proud to be able to serve the sector and serve my country by doing everything that our companies do. So very happy with that.

Shreya Jai: That’s absolutely great. And apart from witnessing next big mega transmission project, looking forward to be invited to a DJ party by you. Certainly. But thank you so much. It was a fascinating conversation. We learned a lot and I thoroughly enjoyed. So thanks again for being here at The India Energy Hour.

Sandeep Pai: Thank you, Prateek. Thank you. Great to meet you. And thank you so much for everything. It was great.

Pratik Agarwal: Thank you. Always fun to talk about this and to talk to like-minded people. So good luck with your podcast. And I hope I’m sure you’ll do really well. This is a topic that everybody is excited about. Finally. Thank you. And I’m glad that all of us are taking the time to do this. So well done. Thank you.    

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