India’s ambitious plan to rapidly transition its economy to renewable energy will have huge environmental, economic, political and social benefits − not just for Asia but for the entire world.

India’s government has set a target of 175 GW of installed renewable energy capacity by 2022, which includes 100 GW of solar, 60 GW of wind, with the remaining 15 GW coming from biomass and small hydro projects.

Meeting these renewable energy targets will make India – home to more than 1.3 billion people – the world’s third largest producer of clean energy, behind the US and China.

The shift to renewables generation will help India, a signatory of the Paris agreement on climate change, lower its greenhouse gas emissions, diversify its economy and its reduce its reliance on imported oil.

But what does Indian’s energy plan mean for the rest of the world?

Cheaper wind and solar power

India’s surge of investment in renewable energy has played a role in the global fall in the cost of solar power, making the technology cheaper than coal.

Market analysis firm GTM Research found that India’s system of tenders has produced extremely competitive bidding and, as a result, pushed the cost of solar to extreme lows, with PV system pricing across the country now in the region of 65 cents per watt. In comparison, China is around 11 cents per watt higher.

The falling cost of solar hasn’t been restricted to India, but is part of an ongoing global trend. As supply has increased, costs have come down. Over the last decade manufacturers, developers and engineers have all become more efficient in their delivery of solar panels and projects. As India moves along the path to a larger penetration of renewables, it will further drive down the global cost of both solar and wind technologies.

Investment and business opportunities

In May 2017, India overtook the US to take the second spot on a list of the world’s most attractive renewable energy markets for investors. In its annual ranking of the world’s top markets for investing into renewable energy, Ernst & Young named China the world’s most attractive market, followed by India.

As the country upgrades its energy systems, transportation, city and industrial infrastructure, India is presenting a trillion-dollar opportunity for domestic and international investors and businesses. 

The cost of delivering India’s energy transition could reach $1 trillion by 2030, India’s power minister told the World Future Energy Summit at Abu Dhabi Sustainability Week in January 2017.

Job creation

Investment in India’s renewable energy is expected to create more than 330,000 jobs in construction, project commissioning and design, business development, and operations and maintenance, the World Resources Institute has estimated.

Delivering major renewable energy projects across the country will result in India becoming a major hub for industry leadership and expertise. This could lead to the delivery of international projects, enabling India to become a leading international clean energy developer.

Joint projects and knowledge sharing

Undertaking joint energy and infrastructure projects can reduce economic risks associated with delivering major projects, while knowledge sharing can drive technological advances and improve efficiencies.

For example, countries like Russia are entering the initial stages of developing a renewable energy market. Through its nuclear programmes, India and Russia have a strong relationship in place, which could allow knowledge transfer to support Russian companies and regulatory bodies to further understand how to organise auctions for the selection of production capacities and advise how these may be integrated into the energy network.

Partnerships like these will be another key element for helping to drive down the cost of renewable energy and further support the adoption of cleaner forms of generation. 

During the past 30 years, companies have sought to improve operational efficiencies and cut costs in all manner of ways, but one of the potentially biggest savings and “quick wins” for businesses – energy efficiency – has yet to be fully exploited.

Energy is one the largest operating expenses for business of all sizes and in all industries. Reducing its cost can help a company’s bottom line and reduce the strain on electricity networks.

Technologies such as the Internet of Things, artificial intelligence (AI) and energy storage are helping companies improve their energy efficiency and save money.

Energy efficiency is becoming a high priority for business, particularly heavy energy users. In 2016, in the US alone, 190 of America’s largest “Fortune 500” companies saved a total of about US $3.7 billion through energy efficiency and renewable energy projects.

Internet of Things and “Demand Side Response”

Demand side technologies are transforming how businesses use and deliver energy. The technology works by automatically adjusting the power consumption of equipment on a second-by-second basis to help manage fluctuations in electricity supply and demand. These adjustments have zero impact on a company’s operations but help to build a smarter, more responsive system which supports renewables and the wider energy transition.

Businesses on a Demand Side Response (DSR) scheme commit to reducing or shifting their energy consumption when electricity demand from the Grid threatens to exceed supply. Businesses which can be flexible with their consumption are rewarded for shifting or reducing demand, or by making capacity available through onsite generation, when needed.

United Utilities, one of the UK’s main water companies, is using a “smart box” from Open Energi, a DSR technology company, which allows its equipment to ‘talk’ to the UK’s electricity grid, National Grid.

The company’s motors and pumps automatically adjust their energy consumption in seconds, in response to variations in power frequency. By 2020 United Utilities aims to provide the National Grid with 50MW of energy capacity − allowing the company to reduce its energy consumption while getting additional revenue from the grid.

In the United Arab Emirates, Dubai is considering demand side management technology to support its goal of reducing its energy consumption by 30% by 2030.

Artificial Intelligence and automation

AI is poised to revolutionize the way we produce, transmit and consume energy, by becoming the brain of this future smart grid. 

The technology could continuously collect and synthesize data from millions of sensors across a city or country to make decisions on how to best allocate energy resources. As AI is more widely adopted, it will become even smarter by spotting patterns and anomalies in large data sets, which further revolutionise both the demand and supply side of the energy economy.

DeepMind, the world leading AI research company, has been working with Google to improve the energy efficiencies of its data centres. By applying its machine learning technology, DeepMind has been able to achieve a 40 percent reduction in the amount of energy used for cooling.  

At present data centres consume around 3 per cent of the global electricity supply – with this figure expected to treble in the next decade, putting an enormous strain on energy supplies. By applying AI to data centres alone to make them more efficient could have a major impact on our electricity networks.  

Energy Storage

Business are using new energy storage systems to improve energy security and generate new revenue streams. They do this by storing low cost energy when demand is low and selling it back to the grid at peak times, when costs are higher.

Alternatively, a business can use its stored energy at its own peak times or to cope with changes in seasonal demand.

When storage is combined with renewable generation, such as solar and wind, business and industry have the potential to be self-sufficient and work off the grid.

At a grid level, energy storage has a number of applications beyond time-shifting energy, which are key for making the grid smarter and more efficient.

Improving energy efficiency is a quick win for business. It allows them to reduce costs, improve energy security and potentially generate new revenue streams. To stay ahead of the curve, businesses and industrial players must begin to invest in technologies and processes for managing energy − a resource which is now a key factor in business success.

Water scarcity is a global challenge. A growing population, which is expected to increase from around 7.5 billion today to nearly 10 billion by 2050, according to a forecast by the United Nations (UN), is putting growing pressure on a finite supply of water. Global demand for water is expected to increase by 55% by 2050. Within the next decade, two thirds of the world’s population could be living in “water stressed” countries.

Regions affected won’t be limited to arid regions, such as Sub-Saharan Africa and the Gulf States in the Middle East. The strain on the water supply will be particularly acute in cities. The number of people living in cities is expected to rise from about 55% in 2016 to 66% by 2050, according to the UN. This population increase could cause major disruption to cities if suitable water technologies are not in place to serve demand. In the United Arab Emirates (UAE) − one of the most arid parts of the world with little rainfall − groundwater levels are low and in steady decline. What groundwater there is, is typically very salty (saline). For the UAE and about 150 other countries on or near the coastline, with minimal rainfall and little freshwater, there is currently little choice but to rely on desalination technology. Desalination involves pumping and processing sea water to remove excess salt and other minerals to obtain fresh water suitable for human consumption or irrigation. The technology is already widely used, with more than 300 million people relying on desalinated water for some or all their daily needs, according to the International Desalination Association.

Desalination has been vital for the UAE’s rapid growth and development. The country gets 96% of its domestic water through desalination. Two of the big disadvantages of desalination technology are closely linked to each other – firstly, desalination is energy intensive, and secondly these energy needs have historically been met by fossil fuels. In the UAE, seawater desalination needs about 10 times more energy than surface, freshwater production. In the Gulf region alone, desalination plants account for 0.2% of the entire world’s electricity consumption. However, these challenges are now being addressed and desalination technology is expected to play a key role in serving growing demand for fresh water. Energy accounts for around 70% of the cost of desalination and is typically derived from fossil fuels. By reducing energy intensity and running desalination plants on renewable energy, operators could both reduce their operating costs and minimise their carbon footprint.

In the UAE, Abu Dhabi Future Energy Company (Masdar) has piloted five energy-efficient seawater desalination projects at a testing facility on the Ghantoot coast. The long-term goal is to implement renewable energy-powered desalination plants in the United Arab Emirates, as well as the wider region, and to have a commercial scale facility operating by 2020. Once rolled out, this project is likely to have implications well beyond the Middle East. Elsewhere, island countries including Japan, Taiwan and South Korea have been using variations of desalination technology, which involve sucking up seawater through long pipes running hundreds of metres out to sea so that they gather water from deep under the ocean’s surface. Water from more than 300 metres deep is purer and has more nutrients, making desalination simpler and cheaper because less energy is required to process the seawater.

Desalination technology has played a key role in helping the UAE and other countries in water scarce regions grow their cities and industries. Over the next decades, desalination will also be vital in helping emerging economies develop, although how these countries power their plants will be different. Desalination, when combined with renewable energy and potentially energy storage, will significantly improve the economic viability of processing sea water and make it more environmentally sustainable. This will play a critical role in responding to the growing global challenge of water scarcity.