India stands at the precipice of experiencing substantial economic growth riding on the back of strong policy measures and commitment towards creating macroeconomic resilience. In tandem with India’s economic growth, is India’s demand for energy. Urbanization along with surging middle-class disposable income and other factors is expected to take India’s share in global energy consumption to 11% in 2040 from 5% in 2016. At the same time, India is committed to reduce the emission intensity of its GDP by 33-35% by 2030 from the 2005 level as part of its nationally determined contribution in Paris COP21. Renewables is the leading force behind this commitment. The Indian government has set for itself the ambitious target of creating 175 GW of renewable energy capacity by 2022 and 275 GW by 2027. Globally, there is a positive investment sentiment in Indian renewable sector evident in the ventures of Softbank, Foxconn, Chinese solar component manufacturer Longi Solar or Goldman Sachs backed ReNew power, the Indian unit of Singapore-listed Sembcorp Industries. This is the result of India’s renewable energy ambitions and subsequent policy creation. For instance, the state electricity regulatory commissions (SERCs) were obligated to promote renewable energy by the Electricity Act 2003 through Renewable Purchase Obligations (RPO) targets, which mandated states to meet their electricity demand through clean sources. Beside tariff revision through the transition from Feed-in-Tariff to competitive bidding, the Indian government is easing conditions for renewable energy project development through its solar park scheme—facilitating land acquisition, infrastructure development or by providing capital subsidy through Viability Gap Funding (VGF).
India has shown extraordinary ambition in revolutionizing the energy sector while it dreams of exploiting the depth of digital disruption. There is a scope of chalking out synergy from these aspirations. Digital tools and technologies can disrupt the renewables sector in three ways—smarter generation, effective incentivization, and efficient consumption. The blockchain is one such digital enabler of a renewable energy revolution. Blockchain leverages distributed database and peer-to-peer communication. Every individual part of a blockchain database can access and update the database while the communication in a blockchain environment is peer-to-peer instead of through a central node. While blockchain creates a transparent database, any entry in it is irreversible, i.e., no historical records can be altered. As a result of which, using blockchain technology enables elimination of intermediaries in energy transactions. Lower transactional cost due to the absence of intermediaries would reduce the energy prices. The blockchain is also the answer to create a distributed hybrid system of large renewable energy parks, small homes and industries generating excess or unused tradable renewable energy. Smart generation is not limited to the blockchain. The collaboration of big data and artificial intelligence is making energy parks more agile. Wind power generation, for instance, is plagued by generation volatility. To hedge against the loss of wind, discoms look to traditional backup plants which use dirty fuel. To cut use of these dirty plants, facilities need to forecast generation and plan reserve. In comes big data and AI. Hundreds of smart wind turbines can record wind speed and power generation every second and send it to a central repository. Crunching this data along with data from weather stations, weather satellites and historical trends using AI can create unparalleled forecasts. Xcel energy—a major power supplier of Colorado has benefited through such smart forecasting by National Centre for Atmospheric Research (NCAR). Using accurate forecast enabled Xcel to save as much money in a year as three previous years combined. Forecasts can not only make power generation in energy parks efficient, but they can also create an array of energy supply mechanisms of solar and wind plants to switch between windless and cloudy periods. Blockchain can also be used for infrastructure maintenance. Grid Singularity, an Austrian startup, is enabling smart grid management using comprehensive blockchain platform that host application ranging from validating electricity trades to monitoring grid equipment.
Renewable energy adoption relies on government incentives to develop. The Indian government is currently formulating the Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI) scheme. Under SRISTI, $3.7 billion would be disbursed as a financial incentive to institutional, commercial and residential consumers for installation of solar panels. However, administering the disbursement is a challenge in terms of tracking, verification, and distribution of the incentive. Blockchain can be the solution to this. SWYTCH, a blockchain based clean energy incentive, along with energy trading aggregator Energy2market GmbH (e2m) is leveraging blockchain and smart meters to verify renewables adoption by an entity. Through AI and machine learning, the amount of carbon displacement by a project is calculated and the equivalent Swytch token is awarded. Like direct benefit transfer replacing PDS blockchain based projects like Swytch can accurately verify and micro-target the right incentivisable renewables asset.
Efficient energy consumption should be a priority for any country, especially for India where energy scarcity is prevalent. When combined with the vexing issues of renewable sources, like fall in wind velocity or periods of cloudy weather, the efficiency of consumption becomes imperative. IoT and cloud-based technologies are increasingly solving such issues. Verizon backed Verdigris is a cloud-based platform that is assisting large buildings and enterprises optimize energy consumption. By using AI, Verdigris identifies the electrical footprint of each appliance while smart meters read their energy consumption. After processing of the collected data in the cloud, the client receives a 24*7 accessible dashboard. Residential consumption is experiencing similar management. Green Running has created an AI-powered home assistant, Verv, that is helping homeowners reduce their carbon footprint. Blockchain can empower consumers by easing switching between power suppliers. British startup Electron is enabling this by reducing switch time to a single day.
Some technologies are still in the nascent stages and are yet to demonstrate the adequate potential for scaling up. Since, in blockchain networks, each node communicates to all other nodes in the network, computational power requirement surges in proportion with the increase in the number of nodes. However, the nascent digital tools should not be a deterrent. Though India is enjoying positive investment sentiment in renewables, digitization, in the long term, can lower the investment demand. For instance, the International Energy Agency predicts a deferment of $1.3 trillion of cumulative investment globally over 2016-2040 if an operational lifetime of power assets is increased by five years through predictive maintenance by increased digitization. The next level of digital disruption has arrived, and it is time for India to leverage this to realize its goals in the field of renewable energy.