Commending India for its initiatives to promote adoption of green energy, Executive Director of the International Energy Agency (IEA), Fatih Birol, rued that the country has not been accorded the recognition it deserves by the international community. In an interview to businessline, Birol said the G20 LiFE (Lifestyle for Environment) initiative promoted by Prime Minister Narendra Modi can help reduce inequalities among people and nations. Excerpts:
What are your thoughts on India’s clean energy transition?
India is definitely doing a very good job. If you ask me if all problems are solved , I would say no, but it is doing a good job. But India’s efforts are unfortunately internationally not very well recognised as it deserves. This is a problem and the IEA is making everything possible to get the attention it deserves. But, this is not enough to solve all problems and there is a lot of job for India to do. In my view, India should also be looking at manufacturing of technologies like battery, solar panels and others.
India’s green energy push is being impacted by funding restraints. Your thoughts?
The foreign direct investment (FDI) coming to India is much below the potential India has. To be honest, when I compare India with some countries in Latin America and Asia, India is not performing well in terms of attracting investments. In my view, multilateral development banks like World Bank, should provide concessional funds in order to accelerate clean energy transition because whatever we do in Europe or Japan or the US, this will not change the world’s destiny. But if we are successful in India together with other countries, we can change the world’s destiny in the right direction.
India has assumed the presidency of the G20. How would you rate its performance?
India took presidency of the G20 politically in one of the most difficult times in history. I told the Prime Minister that it could be only India and him presiding over a successful G20. My hope is on concrete outcomes coming from G20 from an energy and climate point of view, one important area is that if the old G20 countries follow the initiative LiFE that the Prime Minister put on the table in terms of changing the choice of consumers and changing their behaviour, it will be a big big big win for everybody. Because we can reduce emissions, put a lot of money in our pockets and also address inequalities in population and among countries. I was very happy that Prime Minister asked me to come up with a report for the G20 leaders so that it can be a source of inspiration for other countries.
You have several times stressed on diversifying manufacturing supply chains in clean energy. Why is it important?
Solar, today is the king of power markets. When I look at solar panel manufacturing, 90 per cent comes from one country depending on that country’s political positioning. Relying on one single country is always risky. If there is no political disruption, there can be a natural disaster. There can be fire or anything. This is the reason that IEA is highlighting this. Now, I’m seeing some countries are moving.
For instance, the US has an Inflation Reduction Act. In Europe, I believe driven by the IEA, President Von Der Leyen came up with a response to clean energy industrial manufacturing. Japan is going to come up with a green transformation providing incentives. But as a big economy, it is time for India to move strongly in clean energy technology manufacturing for two reasons — for diversification and to position India in the pole position in race for the next chapter of global industry. There are already some moves such as the PLI, but the size is rather modest compared to India’s potential.
How do you analyse the current global energy crisis?
The world has seen an energy crisis before, in the 1970s. But I believe the one which we are experiencing now, is much bigger, and this is the reason I nicknamed this crash as the first global energy crisis. The reason is very simple. Russia as of February 24 (2022), when the war started (with Ukraine), was the number one energy exporter of the world. Russia was the number one oil exporter, LNG exporter, a major player in the coal markets and so on. So as a result we are seeing a major turmoil in the global energy markets and I believe it will be with us for some time to come. Now, the question is if this energy crisis will slow down or accelerate the clean energy transition? Second, which countries are affected in which manner?
My answer to first question is that, just one week after the war started, on March 1 (2022), I said I expect global energy crisis to accelerate clean energy transition. And today, I see that argument has been confirmed because in 2022 clean energy technologies have been super charged. For example, we have seen renewable (electricity) last year increase by 25 per cent, which has never been the case in history. In terms of electric cars, in 2019, only 3 per cent of old cars sold were replaced with electric and this is coming to 15 per cent because efficiency improvement has more than doubled.
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