— Dr. Satish Kumar, Energy Efficiency Ambassador and Vice President, Schneider Electric India
Dr. Satish Kumar
prognosis for the Indian
power sector during the
12th Five-Year Plan is far
from optimistic. He says,
"I would like to note that
given our dependence on
coal for generation
electrical power, one can
expect the demand-supply
gap to exacerbate further,
and also a significant
increase in the cost of
electricity." An exclusive
India's per capita electricity consumption is likely to
increase 2.5 times its current level by 2030. What is your
outlook on the growth of the power sector in the 12th Five-
Historically, the demand for electricity in India has far outpaced
the addition of new generation capacity. In that respect,
we have always been a power-deficit country. Similarly, over
the past several five-year plans, the new electrical capacity
addition has been only about two-thirds of the new electrical
generation capacity that was supposed to come online during
that given five-year plan.
The 11th Five-Year Plan (followed) this trend. Against a target
of 78,000 MW of new capacity, only around 52,000 MW of
new capacity will come online. I do not want to sound too pessimistic,
but if one were to go by the track record so far, I do not
expect that we will be able to meet the planned capacity addition
in the 12th Five-Year Plan.
Speaking of the outlook for this five-year plan, I would like
to note that given our dependence on coal for generation electrical
power, one can expect the demand-supply gap to exacerbate
further, and also a significant increase in the cost of
What will be the generation capacity addition?
The 12th Plan proposes around 75,000 MW of generation
capacity addition. But as mentioned earlier, the achieved generation
capacity addition has been historically around twothirds
of the planned capacity addition. In terms of achieved
generation capacity, one can therefore expect a much lower
What will be contribution of the private sector in the
next five years?
The demand-supply gap in India with respect to electricity
has been increasing over the years. As on date, the electrical
supply meets only around 91 per cent of the demand. While
some states such as Gujarat are power surplus, states such as
Maharashtra are only able to meet about 75 per cent of their
total electrical demand.
With this background, we must look at the capacity addition
from two perspectives. Firstly, how much of the new capacity
addition will plug the existing deficit, and how much will cater
to the new demand? Secondly, how much of this new capacity
will be actually operational, given the issues with the supply
and price of fuel, particularly coal and gas?
In terms of investment, the private sector will continue to
have the larger share of investment in new capacity addition—
both in thermal power generation and renewable areas.
What is the anticipated total investment in generation
segment in the 12th Plan?
Referring to the new generation capacity proposed during the
12th Five-Year Plan, the amount required for investment in
generation segment runs into several billions of rupees.
What steps can the government take to address the concerns
of the investors?
Without commenting on the specific steps that can be taken
by the government to address the concerns of the investors,
we can note that the government should realise that the challenges
faced by the power sector will have a significant impact
on the economy. These challenges lie not just in generation,
but also in transmission, distribution, energy efficiency of
appliances and systems, and also environmental impact. Particularly
with respect to energy efficiency of appliances and
systems, the Star Labelling and Super-efficient Equipment
and Appliance Deployment (SEAD) programmes are positive
steps, which will encourage innovation and development of
new energy efficient products.
Also, the PAT (Perform, Achieve and Trade) mechanism provides
a market mechanism by means of which organisations
which invest in energy efficiency measures and exceed the
specific energy consumption targets set for them, will be
rewarded by means of tradable emissions certificates. We
need similar programmes for other industries that will help
offset the investment risks, and provide market-based incentives
(and not mere subsidies) that will encourage investments.
How far are we from providing access to electricity for
all households by year 2012 as envisaged under the
National Electricity Policy?
The issue of Access to electricity has two aspects to it. First of
these is the availability of electricity for each and every household.
The second is reliability and quality of power. So far, the
focus has been on making sure that electricity network, or
connecting to the grid, is provided for each and every household.
If the data provided by the government were to be
referred, (the Planning Commission notes that over 90 per
cent of Indian villages have been electrified) major headway
has been made on this aspect.
The real challenge lies in ensuring reliability and quality of
power. How useful would electrification be if the village gets
power only for, say, a couple of hours a day? And what if
there is no fixed time when the village will get the electrical
Moreover, what if the electricity is provided at such a low
voltage that most of the equipment, say, a fan or a pump, will
not work at all? In this case, the access to electricity will coninue to remain a very big challenge.
How can this goal be achieve by end of the 12th Plan
One of the steps that the government can take to overcome
this challenge is to develop a network of off-grid rural lighting
solutions, ideally using renewable energy. This will involve
significantly lower capital investment. Several organisations,
including Schneider Electric, have solutions available today
to set up such a network.
What are your thoughts on Low Carbon Growth
Strategy for sustainable development of power sector?
Let us first try to understand what the 2011 report by the Planning
Commission titled 'Interim Report of Expert Group on
Low Carbon Strategies for Inclusive Growth' has to say about
low carbon growth for India. We are among the highest emitters
of greenhouse gases (GHGs) in the world today. India's
electricity sector constitutes about 38 per cent of the total
GHG emissions generated in India. With more and more coalbased
thermal power plants coming on-stream in the future,
this share will most likely increase.
Investment in renewable energy and energy efficiency are
the logical paths to be followed for sustainable development of
the power sector. The Planning Commission has noted that
with a determined effort, there can be at least 11 per cent
reduction in CO2 emissions resulting from the power sector
by the end of the 12th Five-Year Plan. This includes investment
in R&D, energy efficiency, reduction in transmission
and distribution losses etc.
One of the challenges with projections is that a change in
fuel mix in power generation can disrupt the emissions reductions
targets significantly. For example, a recent article from
the Associated Press noted that in 2012, Japan would have
emitted 15 per cent more GHG gases than it did in 1990. It has
been well documented that Japan is a leader in adopting
energy efficiency and emissions reductions measures.
So what exactly happened in 2012? The answer lies in the
March 2011 tsunami and earthquake. Following the Fukushima
disaster, Japan has stopped generating electricity from
nuclear plants. Nuclear power used to generate around onethird
of the total electricity produced in that country. With the
shutdown of nuclear plants, a large portion of the electricity
will now be generated from coal. One major event in 2011 now
threatens Japan's emissions reductions programme that was
running so well for the past couple of decades.
What kind of government initiatives will help companies
adopt sustainability in their systems?
The government has a very important role to play in helping
more and more companies to adopt sustainability in their system.
The government is a stakeholder in sustainability in a
variety of incarnations, be it as a regulator, a facilitator, an
investor, and very often as a customer. The government has
programmes in place to encourage businesses owned by
women and the underprivileged sections of the society. The
PAT (Perform, Achieve and Trade) mechanism will bring
about a significant shift in the energy efficiency market in
The government also has policies to encourage SMEs to
invest in energy efficiency measures, via financial institutions
such as SIDBI. When it comes to reducing the use of water in
manufacturing, recycling programmes, tree plantations etc.,
the government has programmes, rules, and policies in place.
The new Companies Bill also makes it mandatory to invest a
part of the profits into Corporate Social Responsibility programmes.
When it comes to incorporating sustainability in the business
process, and then reporting it, we do have voluntary sustainable
reporting programmes such as the Carbon Disclosure
Project (CDP) and Global Reporting Initiative (GRI).
Both the CDP and GRI have found acceptance from and participation
by many leading Indian corporations. However,
these organisations form a very small share of the listed and
unlisted companies in India. For a larger impact, a mandatory
sustainability reporting programme for all organisations
beyond a particular size would really help companies adopt
sustainability into their systems. The downside is that some
might consider this as excessive regulation.
What are the various sustainable initiatives implemented
by Schneider Electric?
Following environmentally sustainable practices and giving
back to the society are both a part of Schneider Electric's DNA.
Be it our own manufacturing facilities or offices, dealing with
our suppliers, or our BIP BOP (Corporate Social Responsibility)
programme, we have established measurable, quantifiable
metrics that help us evaluate the impact of our efforts. A
testimony to our efforts is the fact that Schneider Electric India
won the Golden Peacock Award for Corporate Social Responsibility
Speaking of efforts at an individual factory or office level, let
me give you the example of our plant in Hyderabad for example.
Since it became operational in 2006, this plant has seen a
continuous reduction in its specific energy consumption
(energy consumed per unit produced). This plant has also
adopted several green manufacturing practices, such as recycling
of water, reduction in water use, recycling of waste, capture
and reuse of SF6 gas etc.
Not only that, the team at this plant is working with the local
villagers to declare a 5 km radius around the plant as a 'plastic
free zone'. They have also engaged with the community in the
form of awareness campaign, participation in tree plantation
drive and distribution notebooks to school children.
No wonder then that this plant won two major awards over
the past couple of years, namely the Frost & Sullivan Green
Manufacturing Award and the National Energy Conservation
Award (instituted by the Bureau of Energy Efficiency).
What are Schneider Electric's investment plans in
As one of the largest players in the markets that we operate in,
we look at investments in India as an important aspect of our
long-term plans here. And at Schneider Electric, we consider
investment in people and the society as very important components
of our overall investment plans. I am happy to inform
that on the people front, we have invested in mentoring, training
and skills development programmes for our employees.
In the area of gender diversity, Schneider Electric has made
significant progress—women constituted about 9 per cent of
the total workforce in 2009; today, 20 per cent of our employees
are women. This figure achieves greater significance
when we consider that in the last three years, our workforce
has doubled to 15,000.
We certainly have made significant investments in our
employees. Schneider Electric has the highest number of
trained professionals in the energy efficiency area in India.
We have the highest number of CMVP (Certified Measurement
and Verification Professionals), and BEE Certified Energy
Auditors and Managers compared to our peer group.
Similarly, we believe in walking the talk—we are rolling out
measures to reduce the energy consumption of our own facilities
and getting ISO 50001 certification for our employees.