ET EDGE Podcast | India’s Transition to an equitable Net Zero Economy

Title: India's Transition to an equitable Net Zero Economy

Duration: 14.06 minutes

Description: May 12, 2022, In Conversation with Nitin Prasad, Chairman, Shell Companies in India, and Dr. Vibha Dhawan, Director General, The Energy and Resources Institute (TERI)

Transcript

0:00

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0:14
we are talking quite a bit about energy

0:16
security going net zero and so on

0:20
and i just wanted to ask you what does

0:23
achieving net zero mean to you

0:26
and especially when we talk of shell it

0:28
is accelerating the transition to a low

0:31
carbon sustainable and equitable future

0:34
john thank you thank you dr ellen and i

0:36
think uh it has many different aspects

0:39
so firstly

0:40
you know being a net zero company is

0:42
core to our power and progress strategy

0:45
uh that shell has has laid out it's one

0:47
of the the pillars that are dead and we

0:49
have always uh you know aspired to be a

0:52
leader in the energy transition and and

0:54
we believe that you know putting

0:55
ourselves forward and putting a clear

0:57
target in terms of

0:59
being a net zero company by 2050 um and

1:02
also addressing not just scope 1 and

1:05
scope 2 emissions but also focusing on

1:08
scope 3 emissions which can be over 85

1:11
to 88 percent of our emissions uh is is

1:15
an important part of the role that we

1:16
have to come back and play uh moving

1:18
forward now for us this is is is about a

1:22
transformational change in in many

1:24
different aspects of how we do business

1:27
and and the starting point is is the

1:29
governance side so this is about you

1:32
know going to our shareholders once in

1:34
three years and asking for you know an

1:36
approval for our our sustainability in

1:39
our energy transition plan this is

1:41
linking emission targets on an annual

1:44
basis to executive pay

1:46
this is making the the wholesale

1:48
governance changes and how we run the

1:50
company which is an important sort of

1:52
first step in terms of what we get there

1:55
the second step is of course is taking

1:57
forward our products portfolio in terms

1:59
of how we do business um and and that

2:02
has a lot to do in terms of how we

2:04
approach the market and work with

2:06
sectors and customers to to

2:09
work to decarbonize them uh

2:12
and the products and solutions that we

2:14
developed that will enable them to come

2:16
back and do this so for example we have

2:18
come back and and suggested by 2030 we

2:21
will have two and a half million

2:22
charging points uh but it's not just

2:24
then providing electricity to cars uh

2:27

but it is also about providing

2:29

electricity into their home and to then

2:31

back that up with a hundred percent

2:34

renewable electricity

2:36

that we will make through offshore wind

2:38

projects or other solar or wind

2:40

renewable projects that are there and

2:41

that is just the electricity space we

2:44

equally have projects in carbon capture

2:46

and storage and hydrogen in nature

2:48

offsets natural offsets and other sort

2:50

of spaces that we come and take forward

2:53

effectively we have to create a a

2:55

product portfolio that that provides

2:58

options and flexibility to customers and

3:00

consumers going forward

3:03

a third piece to this one which is also

3:04

quite important and and these are

3:06

largely we call them enablers but but

3:08

there's also about how do we get the

3:10

right talent uh the right sort of

3:12

leadership the right behaviors the

3:14

organizational culture uh you know in

3:17

terms of taking a look at every

3:19

opportunity that exists for us to take

3:21

look at circularity and other and

3:23

sustainability aspects so sustainability

3:26

is not a chief sustainability offer that

3:28

sits or a team of five or ten people

3:31

that sits there but it is we are all

3:33

chief sustainability officers uh that

3:35

must take a look at opportunity and we

3:37

take a look at digitalization and the

3:38

implications and how do we accelerate

3:40

that

3:41

but let me let me come back and ask you

3:43

because you teed up the prime minister

3:44

and and the commitments and india uh you

3:47

know what what you said so as the

3:49

president of terry you know what are

3:51

your thoughts on how india could

3:52

decarbonize its energy system by 2050 uh

3:56

while continuing to make economic

3:57

progress well i'll say the very first

4:00

step for adopting any technology is

4:03

commitment from the government side

4:05

so when we say the uh

4:08

kind of promises or the announcements

4:10

that the prime minister made at cop and

4:12

one of them being that by 2050 it will

4:15

be

4:15

energy production will be largely

4:17

decarbonized

4:19

so it shows that there is commitment on

4:21

part of the government

4:23

and therefore what companies like yours

4:25

were doing in the past more voluntarily

4:28

it sends a message across that what is

4:31

voluntary today may become mandatory

4:33

tomorrow

4:34

and there is government support

4:36

but you know it is not just commitment

4:39

or rather promises it is also that

4:42

government will have to move many steps

4:45

forward

4:46

and first of all

4:48

when we talk of production of green

4:50

energy today

4:52

it requires capex there is lot of

4:54

investment that is required

4:56

what you just listed about having the

4:59

power uh generating energy through

5:02

doodle uh through renewable needs and so

5:04

on it's going to cost money

5:06

so it is companies like yours which are

5:09

perhaps able to invest in topics

5:12

but not all and also in a way you cannot

5:15

be doing charity no company can do

5:18

charity it is that

5:19

there should be buyer for that energy as

5:22

well

5:23

and maybe at a higher rate to begin with

5:25

because as there will be economies of

5:27

scale and production and even

5:29

indigenization of

5:31

the

5:32

infrastructure itself the prices will

5:34

come down but initially they require

5:36

that kind of support

5:39

you rightly mentioned that india is a

5:41

country we need to develop which is

5:42

essentially means that our energy

5:44

requirements are also going to increase

5:46

in the near future

5:48

and indirectly that also shows that

5:51

while on one end we are promising by

5:53

2050

5:54

uh it will all be renewable but to begin

5:58

with even our carbon footprint may

6:01

increase if we continue on the same path

6:03

because of the development we have to

6:05

grow

6:07

and

6:08

therefore it is very important for the

6:10

governments that they invest in the

6:13

infrastructure as well

6:16

and most of the equipment that perhaps

6:19

if and made in india the

6:21

this concept perhaps it is far more

6:23

important today than yesterday

6:26

because we have also learned that

6:29

disturbance in one part of the world how

6:31

it influences

6:33

every part of the world this the present

6:35

war

6:36

there is so much of uncertainty

6:38

for europe there is so much of

6:40

uncertainty for india for meeting its

6:42

energy requirements

6:44

and therefore we need to go local as

6:47

much as possible we need to produce

6:49

stuff indigenously

6:51

and small and medium enterprises will

6:54

also have to play an important role in

6:56

it

6:57

another thing because see policy side we

7:00

are all right but are we doing enough r

7:02

d

7:04

and there i feel that if we look at

7:06

statistics

7:08

india's investment in r d sector is

7:11

negligible we only spend about 0.7 of

7:14

our gdp on r d and private sector

7:18

contributes about 37 percent of this 0.7

7:22

percent

7:23

so which is really really small if we

7:26

compare ourselves

7:27

to countries like china and u.s japan

7:31

germany

7:32

where it's more than 70 so therefore

7:34

that r d expenditure has to go up

7:37

especially when we say made in india

7:40

the other important point which you just

7:42

listed and that is the capacity building

7:46

technology new technology first of all

7:49

all stakeholders they should be willing

7:51

to adopt this

7:53

that willingness will also come that

7:56

any technology even old especially the

7:59

new one there are going to be feeding

8:00

problems

8:02

so that needs to be sorted out then and

8:04

there rather than saying that okay wait

8:06

for ten days and our engineer will come

8:09

so we need to invest in r d and that is

8:12

where

8:12

i personally feel that

8:15

our teaching especially in our

8:17

engineering colleges or otherwise skill

8:20

india program

8:21

that should also be aimed towards

8:24

new technologies so how do we overcome

8:27

that and perhaps public private

8:29

partnership also becomes extremely

8:32

important

8:33

when we look at uh other concepts the

8:36

new technologies such as green hydrogen

8:38

and so on i would like to ask you

8:41

another question

8:43

and that is

8:45

as i

8:46

told you about the role that a private

8:49

sector will have to play now

8:51

and

8:53

energy companies perhaps we have a much

8:56

much greater role to play

8:58

when we are talking about

9:00

net zero world

9:02

and really speaking it's not a luxury

9:04

net zero is not a word

9:06

it is if we want to

9:08

save ourselves the human race on this

9:11

planet we have no other option

9:13

and therefore all of us are looking

9:15

towards not just the governments

9:18

also to large energy companies so what

9:20

are your views on this

9:22

i think actually i i'll uh you know

9:25

build on the frame that you laid out on

9:27

you know the kind of change that we need

9:29

um and and the different aspects of the

9:31

change from r t to to startups to

9:34

innovation to policy and advocacy

9:36

and i think that that starts to give us

9:38

you know the the indication of how even

9:40

an energy company needs to change as we

9:42

go forward and i think it is it is about

9:45

an evolution of the role that we play uh

9:48

in in society we were enablers of

9:52

development and progress by providing

9:54

energy for many many decades uh but now

9:57

we need to evolve to to transformative

10:00

collaboration to facilitation uh to come

10:03

back and and see how do we create the

10:06

partnerships uh with the different parts

10:09

of of uh society uh and to to be able to

10:13

come back and accelerate uh not just the

10:16

development of these new technologies

10:18

but the adoption and pace and

10:19

commercialization of the new

10:22

technologies going forward and for so

10:24

what does that mean for us i mean that

10:25

means for example that we we need to

10:27

become much more adept at coalition

10:30

building so how do we bring you know

10:32

different voices into the room to talk

10:34

about what do we come back and do so for

10:36

example uh you know working with the

10:38

energy transition committees as you know

10:40

globally um in in terms of coming and

10:43

bringing a much more informed debate and

10:45

dialogue about what this starts to look

10:47

like

10:48

we must be able to facilitate the

10:50

development of new industries and

10:52

sectors so you know some of the sectors

10:55

that need to transition require the

10:58

whole value chain all the different

10:59

players to come together uh if in

11:02

construction for example how do we

11:03

create a space where not only are the

11:06

builders uh there but but also the the

11:09

you know the real estate developers and

11:11

and then you know eventually the occupy

11:13

occupiers of those buildings but equally

11:15

then you have cement and steel and then

11:16

you have the energy privilege providers

11:18

to them and all of us have to sit

11:20

together

11:20

uh to be able to come back and identify

11:23

uh how do we work together in and

11:26

restructure the whole value chain

11:28

in a manner that is both sustainable

11:30

circular and and but equally doesn't

11:33

create a effective break in the chain by

11:37

uh by not sharing the economic uh needs

11:40

across across the entire chain

11:43

um we have to take a look at supporting

11:45

innovation uh and you know for example

11:47

we we do incubation in of startups in

11:51

india through our shell e4 program

11:54

and this is about how do we bring the

11:56

next generation of capability uh and

11:59

accelerate that development going

12:01

forward uh and and really come back and

12:03

and take that forward

12:05

so there is a number of different

12:06

aspects in terms of what we'd come back

12:08

and do one of the things i think is is i

12:11

you know i think it's really sort of

12:13

important is um uh you know that we've

12:16

been working on is how do you in the

12:17

sense of partnership you know we've been

12:19

working with uh a number of the heavy

12:21

process industries which are you know i

12:24

think you know where you would agree

12:25

that uh was you know what fifteen twenty

12:27

percent of uh emissions in india's what

12:29

industrial emissions

12:31

and so we took on the challenges how do

12:33

you work uh with some of these the

12:35

leading companies in india

12:38

and developed decarbonization pathways

12:41

with them and i think i thought that was

12:43

a very indication of how we need to

12:45

change and work because what we were

12:47

doing was to effectively you know create

12:50

system models to take a look at what the

12:52

implications of those system models are

12:54

identify the interdependencies between

12:56

the new technologies what does this mean

12:59

from

13:00

their customers their products their

13:02

their solutions for our perspective how

13:05

do we accelerate you know what has been

13:07

generations of efficiency and bring all

13:09

of that you know in an accelerated

13:11

manner through digital tools um as we

13:14

deploy these new technologies in them

13:17

and to really co-create with the

13:18

customer you know credible pathways in

13:21

heavy process industries how we go

13:23

forward and i thought that was really

13:25

indicative of of how you know what was

13:28

typically a buy sell transactional

13:30

relationship has now evolved to a

13:34

two development teams and organizations

13:37

sitting together talking through the

13:39

system and its implications

13:41

and co-creating and and so therefore the

13:44

nature of of that relationship has

13:47

significantly maybe not even evolved

13:50

it's been a revolution

13:51

in terms of how that looks like

14:02

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