‘Renewable energy is not a silver bullet’

Debabrata Das New Delhi | Updated on January 20, 2018 Published on March 21, 2016


Realistically, thermal fuels — coal and gas — will continue to play a key role in energy system

Jeremy Bentham, Vice-President, Global Business Environment at Royal Dutch Shell Plc, is best known for his work in developing forward-looking scenarios which give direction to the oil and gas major’s investments and strategic thinking.

While appreciating Modi government’s efforts to correct the existing policy issues, he said: “We also do hope that ultimately the government does tie up some of the reforms that are still needed to really be able to unleash the capacity for developing the gas market and integrating India into the global system.”

In a conversation with BusinessLine, Bentham and his team of economists predict that by the 2030s India will be a swing player in the energy market. Excerpts

Given the emphasis you have put on gas and India’s importance in the global energy markets, what role do you see for Shell in India?

We don’t rule anything out. We have to look at what the possibilities are and many of those are either facilitated or constrained by existing policies and the way markets are set up. We believe that increasing the capacity to bring LNG into the country and facilities to use it are very important. Doing this requires the ability to access a growing infrastructure and applications in transport as well as opportunities like a hybrid micro-grid of gas and solar power in cities. We are keen to look at all these possibilities.

In the global energy picture, India is important. By the time we get into the 2030s, India will be the biggest component of growth in energy in the world. In other words, it will be swing player in energy markets. Therefore, the capacity to integrate with a global system is very important for India.

What do you make of the Modi government’s efforts to develop the gas market?

Broadly, it is fair to say that we have experienced the current government as being oriented towards action and solutions. That has been refreshing and we hope to be a constructive partner. We also do hope that ultimately the government does tie up some of the reforms that are still needed to really be able to unleash the capacity for developing the gas market and integrating India into the global system.

India has committed to more renewable energy for power generation. But coal will continue to account for much of the base load electricity. Do you think that needs to shift towards gas-based generation?

I think we have to be realistic about how things will develop. Thermal fuels — coal and gas — will play an important role. Whilst there is the availability of coal and it will be used, it needs to be used in a cleaner way. I do believe strongly that global standards on the use of coal need to be applied. It would be a shame to have locked into investments that you later come to regret. I recognise the importance of coal, but there are dangers to it. Certainly, in electricity generation, more solar and more wind is required and you will see it happen. But for base-load electricity, gas has to have an important role. Effectively, for a given amount of electricity generation, the emission from gas is much lower.

Has enough attention has been paid by the government to cleaning up its thermal fuel use?

Renewable energy is going to be very important in the energy system. But it is not a silver bullet. You are effectively creating electricity which addresses one part of the energy system but not addressing those parts of the economy that are hard to electrify. For example, industrial furnaces cannot be electrified and similarly you cannot electrify aircraft. Molecules and thermal fuels have some real premium use. The government has to co-evolve the different parts of the economy to get the best of both worlds. Focussing on one or the other leads you to miss things. Effectively, we see four critical transitions in India — usage of modern fuels, urbanisation, integration with global energy markets and finally decarbonisation.

Do you see the bio-fuels business growing in India for Shell?

I think so. I think that if you look at the very different ways to decarbonise different parts of the economy, then biofuels will play an important role. Also, biomass power generation can play a role. If we look at the long term, towards the end of the century, the kind of energy mix that will be there… perhaps 15 per cent of all energy available globally will be based on biofuels. We certainly think that is an important area.

Published on March 21, 2016
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