The world's lab for energy tech

India has, thus far, failed to leverage the scale of its energy demand and its need for advanced technologies to promote research and development (R&D) geared to the market. If energy security, renewable energy, and Make in India are serious goals, a bold vision is needed: India must become the world’s laboratory for energy technologies. 

The transition in India’s – and the global – energy system depends on a tripod of policies, finance, and technology. There has been a push on the policy front (175 gigawatts target for renewables; 270 million LED bulbs distributed; industrial energy efficiency); and some incremental progress on clean energy finance (a nascent green bond market; consideration of green investment institutions). 

But we are lagging the most in developing, testing, commercialising, and manufacturing new energy technologies. Two years ago, in its submission to the UN Framework Convention on Climate Change, India had stated that it intended to “build capacities, create [the] domestic framework and international architecture for quick diffusion of cutting edge climate technology… and for joint collaborative R&D…” India was right to argue that its low-carbon growth would need technologies to shift “from lab to field” as well as those “still in the realm of imagination”. Its illustrative list of desirable climate-friendly technologies spanned clean coal, nuclear, and renewable energy. But is action in line with ambition?

In 2012 India and the US launched the Joint Clean Energy R&D Centers, to jointly develop technologies, rather than solely transfer innovations from elsewhere. When announced, 50 per cent of the $100-million budget was supposed to come from the two governments (equal instalments over five years). The remainder – $50 million – would come from the research consortia, which included industry partners. By the time three groups – in solar, energy efficiency, and advanced biofuels – had been selected (among hundreds of firms and research laboratories), they had upped their contribution to $75 million. Another track on energy storage has been launched. But just when the R&D phase was to shift to a deployment stage, the programme now risks stalling because the incentives for commercialisation were unclear and because the Trump Administration is backing away from clean energy.

In another example, an Indo-German solar energy partnership focuses on solar rooftops, solar parks connected to renewable energy corridors, and off-grid installations. The Indo-German Energy Forum promotes dialogues on energy security, energy efficiency and renewable energy, investment in energy projects, and collaborative R&D. Yet, there is no major initiative to jointly develop the next generation of energy technologies. 

France and India together launched the International Solar Alliance in late 2015. It is expected to become a formal intergovernmental institution soon. Solar-related R&D is one of its three main pillars. Again, no work programme has been launched on this front, whereas work has begun on affordable finance and scaling existing technologies. 

Why have we not managed to showcase significant achievements in energy technologies? First, there is limited targeted R&D, to develop technologies applicable in India and adhering to specific commercial and efficiency parameters. Secondly, if private investment were not crowded in, research would risk being restricted to laboratories. In many cases, the links to market opportunities – and incentives to commercialise – have not been clearly established. Thirdly, without a robust ecosystem for venture investment in India, many energy innovators struggle to prove concepts at scale to eventually attract private equity and commercial debt. Targeted public investment could bridge the gap. Here are two proposals to overcome these barriers.

Enterprise-driven Energy R&D: A $200-million five-year programme for energy R&D with time-bound goals would focus on: (a) Efficiency of solar cells; (b) low-cost manufacturing of solar modules; (c) renewables-based hydrogen production and use; (d) energy storage; (e) electric public transport.In addition to universities and research laboratories, entities would have to necessarily include commercial enterprises. The programme would be co-financed by partner governments up to 49 per cent. Private enterprises would contribute the remainder, including contributions in kind (laboratory facilities and research personnel). Consortia members would co-own the resulting intellectual property. Advanced market commitments to procure new products meeting specified parameters would give an added incentive for private investment. 

Innovation Fund for Energy Technologies: A $20-million (replenishable) venture investment fund to promote innovative clean energy solutions would offer early-stage grant funding, so that innovators can test their products and business models and achieve sufficient scale to attract commercial investment. Again, participating governments would co-finance the Fund while philanthropic foundations could supplement the resources. The Fund would aid: (a) Technology demonstration; (b) project preparation for commercial investors; and/or (c) underwrite risks to lower cost of finance for innovators. Any company registered in a participating country with pre-established credentials of operating in or primarily targeting the Indian market would be eligible.

Why should these proposals work? One, India could serve as a test-bed for technologies applicable in other developing countries. Moreover, joint development mitigates concerns around intellectual property theft. And, the budgetary outlay would reduce for India the more other countries and firms joined. Since 2009, the US Advanced Research Projects Agency-Energy has funded more than 580 projects with just $1.5 billion; 74 projects have attracted more than $1.8 billion in private funding. If India created multi-country and multi-institutional energy R&D platforms, they too could trigger a wave of research and transformative technologies.
 

The writer is CEO, Council on Energy, Environment and Water (http://ceew.in), co-author of Energizing India (SAGE, 2017), and serves on the World Economic Forum’s Global Future Council for Energy 

Twitter: @GhoshArunabha; @CEEWIndia