AVP, Corporate Planning
VP, Business Development
Transitioning to low-carbon technologies can create healthier working conditions, increase the number of jobs available, and protect against the destructive impacts of a warming world. At the same time, the jobs created from these transitions will vary across skill levels and geographies, and may not necessarily cater to the communities that are currently engaged in high-emissions sectors. Climate policy in India has been built on the pillar of ‘co-benefits’ which uses climate action as a pathway, rather than an impediment, to socio-economic development. A just transition is an important part of the co-benefits approach due to its focus on employment and communities; in addition, unjust transitions can slowdown or even derail climate movements through labour rights protests and long- drawn legal battles.
The global energy sector is undergoing fundamental change – sweeping away entrenched business models while creating new opportunities. While predicting the outcome of this ongoing disruption is notoriously difficult, it’s a safe bet that intelligent energy storage will be a key building block of Grid 2.0. It is relatively easy to identify three trends driving the ongoing global reshaping of the energy landscape: decarbonization, decentralization, and digitization. As the landscape evolves, charting a safe course requires understanding each of these three Ds - while embracing storage early will help energy users and producers buffer any potential shocks in the future.
The decarbonization efforts across the globe have intensified in recent times. It is driven by a powerful combination of policy, technology and market forces. The Paris Climate Agreement with new global climate architecture, spreading the mitigation commitment deeper and wider, will disrupt the economic landscape across the sectors in all regions. Further to Paris Climate Agreement, the Race-To-Zero efforts by the businesses, cities and governments is also driving the demand for deep decarbonization. As it is well known, the world community has committed to keeping global warming below 2 degrees Celsius, and going beyond 1.5. Even the 2-degree goal implies a massive ramping up of clean energy technologies and limiting global warming to 1.5 degrees would require to reach Net Zero much before 2050.
The demand for deep decarbonization in energy, industry and transport sectors is complemented with decentralization. More distributed resources make for a more resilient system and enable small and large power consumers alike to produce much of the electricity they need locally.
Digitalization opens up multiple possibilities and makes the transition to Net Zero future feasible and flexible. Advanced energy management software and control algorithms will keep grids in balance and optimize the deployment of various generation and storage resources according to market (and thus, if the market design is done correctly) needs. Such software will also allow customers to lower their energy costs by becoming partially self-sufficient. It will also enable completely new business models, even helping generate revenues that offset at least part of their deployment cost.
In India, Greenko’s next-generation energy utility promotes energy security and independence by substituting imports of oil & gas and long-term financial stability by offering no-escalation-of-electricity prices. There is a growing preference amongst B2B customers for renewable energy, combined with energy storage as the companies are committing to deeper cuts in GHGs to reach Net Zero Emissions by 2050. The sub optimal coal based captive power plants now can be replaced by firm and flexible energy from next-generation electricity utilities of Greenko.
Increased share of RE is pushing greater intra-day variations for baseload coal, demanding more flexibility from RE generators. Around 40 GW of generation capacity based on coal in India is generating power at a cost of more than Rs.4.20/kWh and Greenko’s firm RE i.e RE assets combined with pumped hydro storage and intelligent energy platform can potentially compete with such capacity. Greenko is harnessing the potential of the Green Hydrogen market by using the low-cost RE power for green hydrogen production. The produced green hydrogen is then planned to be transported to the consumer market in the form of Zero carbon molecules.
The electric grid of the future would be following the five principles:
Empowering the consumer while maintaining universal access to safe, reliable electricity at a reasonable cost;
Demarcating and protecting the commons;
Aligning risks and rewards across the industry;
Creating a transparent, level playing field; and
Fostering open access to the grid
These principles would help future-proof the grid with the flexibility, resilience, and scalability to meet future needs. Further, the attributes for the future distribution edge platform will be:
Network efficiency, resilience, and reliability;
Level playing field for all resources;
Transparent incentives to promote technologies that result in social benefits;
Support the harmonization of business models.
Due to new business models that involve IRESP, Green Hydrogen production, and Zero carbon molecules synthesis, the new value pools in different segments of the value chain will be;
Greenko’s new generation energy utility is designed to harness vital value pools proactively by developing state-of-the-art multi GW scale Integrated Renewable Energy Storage Projects ‘IRESP’. The group has already initiated the development of Integrated Renewable Energy projects with a total capacity of 48.98 GWh across 4 states of India. The IRESPs are in the pre-construction phase with a total capacity of 15.82 GW and are located in the states of Andhra Pradesh, Karnataka, Rajasthan, and Madhya Pradesh. The IRESPs are expected to harness the power of solar and wind resources with digitally connected storage infrastructure to provide scheduled and flexible power to the grid. Please refer to chapter 4.4, for more details concerning the specifications of all the IRESPs.
The IRESPs are combined with Intelligent Energy Platforms to offer flexible renewable energy that can harness many value pools in the electricity system. The business model is a ‘sharing platform of renewable energy storage combined with green hydrogen production and transportation of the same in the form of green ammonia or synthetic natural gas. This offers multiple services to RE generators, grids, distribution companies, refineries, fertilizer companies, traders, gas companies, and various consumers throughout the business model.
Converting hydrogen into other energy carriers, such as ammonia or synthetic hydrocarbon fuels, involves higher costs but in the case of fuels it also allows easy transportation and storage of hydrogen, and it is compatible with existing infrastructure or end-use technologies (as in the case of ammonia for shipping or synthetic kerosene for aviation).
The unique pumped hydro storage systems would enable dispatch of the lowest cost RE power for Green Hydrogen Production and it could be further synthesized into Zero carbon molecules and transported to the market in the form of green ammonia or synthetic natural gas. The overview of the four major stages involved in the business model is presented below:
Green H2 and Energy Carrier Architecture
The proposed business model aims at developing sustainable revenue-generating assets in the long-term from which Greenko has estimated to achieve 50% EBITDA from clean energy services and technology business solutions combined.
The business model will majorly help in targeting three markets:
1. Other industries include – Edible oils, electronics, diamond cutting, power plants, glass industry 2. A 5% H2 blend (by energy) with natural gas for city gas distribution 3. HT – hydrotreatment, HC—Hydrocracking