In this episode I will be speaking with Arunabha Ghosh, the founder and CEO of the Council on Energy Environment and Water (CEEW), which has been anointed as South Asia’s leading energy and environment think-tank. Dr. Ghosh was also instrumental in the formulation of the International Solar Alliance and Clean Energy Access network, and in this episode, Dr. Ghosh discusses his beliefs on how the US can help partner with India for the global development of renewable energy.
Dr. Ghosh also touches upon his belief on how to attract long-term debt financing to the rural energy market and what the future energy landscape looks like. Hope you enjoy my conversation with Dr. Ghosh!
[2:00] How has the book Meditations by Marcus Aurelius helped Dr. Ghosh in his journey? [5:30] What are some of his self-reflection practices? [7:26] What were the objectives of the Clean Energy Access Network? [09:02] How did the process came about to help organize all the companies across rural India? [15:15] The role of the intermediator as an aggregator and how to attract financing into the rural energy sector [21:21] What role can the US play in partnering with India specifically in the renewable energy space?
00:06 Karan Takhar
Hello, everyone. This is Karan Takhar, and welcome to the Zenergy podcast. Over the past decade, India has done an impressive job of integrating renewable energy into its energy mix. For this Fullbright podcast series, I sought to investigate the enabling factors and potential of India's global leadership in renewable energy with the focus on solar. This Fulbright series is broken down into Four Seasons. In this season, through conversations with leaders who have been instrumental in developing the Indian renewable energy sector, we will highlight how India has managed to integrate 35 gigawatts of solar in just a span of 10 years. We will also explore what these leaders believe. The key challenge is To be as this sector further develops.
In this episode, I will be speaking with Arunabha Ghosh, the founder, and CEO of the Council on Energy, Environment, and Water, as well as a founding member of the Clean Energy Access Network. Arunabha Ghosh has been anointed as South Asia's leading energy and environmental think tank, and the Clean Energy Access Network has been instrumental in helping to organize and catalyze India's rural energy access space. In this episode, we will explore Arnab's beliefs on how to attract long-term financing to the rural energy market and also how the US can help partner with India for the global development of renewable energy.
Thank you so much, Dr. Ghosh, for taking the time. I've found sometimes when I'm doing research prior to engaging in interviews, something really strikes me as very interesting and hits me on a personal level, and I was reading an interview you did with live mints, and they asked you about whether there are any books. That you particularly enjoy reading or go to in times of reflection and things like this, and you responded that you loved this book called Meditations By Marcus Aurelius, and I got introduced to both a few years back through listening to a bunch of interviews with a lot of business leaders In the US and a lot of them also refer to this book. So I was just curious to ask you first. I'd love to hear like when you got introduced to this book and How has helped You in your own journey. Professional or personal or whatever?
03:00 Arunabha Ghosh
Alright, thanks for reaching out to Me on meditation. Actually, no one introduced me to it. I stumbled upon it. I'll read very widely, and I came across it. as you're saying, there are a lot of people who read it and talk about It, and I think, what strikes me about the book is that it's written by somebody who's in a position of supreme power and yet is deeply rejected and mindful and meditative, and it suggests to me and resonates with me because, one, it suggests that no one is infallible check-in, but those with responsibility, but those with greater responsibility have to be even more mindful of their actions, their thoughts, their words, and then thirdly it a lot of the issues that and Aurelius is right about our sort of more germane in nature in terms of the kinds of an ethical quandary as we all come across. How do we assess our place in the world? How do we address our responsibility? How do we not react to opponents? We figure out who we should listen to, who we should not listen to. How do we not jump at the first instance of any kind of bad or Good happening buTake your time to reflect on it and hold it and of course, commentators would argue that this is one of the founding principles of Stoicism, and I'm not saying I'm not a story, but it's something that is very important for us to reflect on, even without being up storwick or being categorized or putting one bucket or something One of the most important passages that I always loved in that book is. Not to know what the world is to Be ignorant of where You are not to know why it's here is to be ignorant of Who you are and what it is not to know any of this is to be ignorant or why you're here, but what are we to make of anyone who cares more about the applause, People who don't know where or who they are? So really, depending on, you know that the answer is actually lie within Keep seeking.
05:24 Karan Takhar
What are some practices that you have that help you find who you are? It's probably your broad set, but I just personally curious as to when?
05:34 Arunabha Ghosh
I've always been someone who sky to be mindful of what I do at the end of the calendar. The year I reflect on what has been, not what's been achieved whatever I attempted, and you know, how have I grown? I do the same around my birthday, which actually happens in the middle of the year in June, so it almost every, you know, Every six months, I'm doing a reflective Thing, and I write down I write down what's working, what's not working I do meditation every day I do, that's a shorter exercise, about 10 to 20 minutes, But yeah, these are just specific exercises that you do, and, of course, then I try to keep fit together to exercise workout, Or it is yoga every day of the week. So again, a healthy body helps with, you know, active mine. So yeah, my biggest tool for me is actually the ability to or the attempt to keep connecting dots, which I believe a lot of things are connected to one thing or the other, so we only begin to spot the patterns and begin to understand different nuances Simple check will give you a better sense Where you're standing.
06:57 Karan Takhar
That was really interesting and now just moving towards deferral, energy access space, which this series is largely based on, And of course, you found it CW. But also, I know that you were a founding member of Clean Energy access network I want to ask what were the objectives behind setting up this network. I think it was six years ago, and like how did that process that's actually setting it up on Hold? Did you have to convince a lot of people to like stakeholders, or what did that look like?
07:37 Arunabha Ghosh
So in, the type of work for the clean Energy Active Network began eight years ago, at that time, GW was only was actually just about two years old as an organization, and one of our objectives, of course, Was to increase access to energy and action to clean energy and use our analytics and our understanding or our analysis of policy and policy development as a way to much progress in the right direction, at the same time, we kept feeling, but as I kept reading that, we still did not understand ground reality very much because if you looked at Government of India documents, there were very much supply side there was about by 2030, we are going to have 100,000 megawatts of power supply, and this will be the makes, and all of that is important. But I could never see what is the perspective of the household here Who are we serving? Whose problem are we solving, and that need to connect up with people in the field who are trying to deliver energy services, particularly in rural areas where the great degree of electricity and cooking energy is needed? Deprivation, so one colleague of mine and I headed out into rural India, and we started going and visiting these terms, and when I say from here to understand or at least know that understand, we're talking about very, very small enterprise codes with maybe four or five employees. But we are trying to capture opportunity and a few villages. Some of them were larger, some of them had Been around for 10-15 years who had a footprint in more than one province in the country, and we try to understand what are the problems that they're solving and what are the problems they themselves faced as enterprises is a large utility-scale. Grid is not coming and reaching the households. What are the other alternatives that are coming up? Are there microgrids? Are they so their home systems? Are they small wind turbines or their micro hydro project? Are their biomass to energy projects, and we went around understanding that Ground reality, and it struck me as I was doing this that There was a lot of narratives around what they were doing, but there was very little analytics around what would happen in which and that. Obviously, when you're working in the field, we are able to tell many stories about the life you have impacted, But when you think about lives impacted or the opportunities to impact livelihoods. You have to have a better understanding of the sector of a whole, and when we did the Analytics, we realized that there are some common problems these enterprises were facing. Of course, the policy was not in their favor. Policy favored large-scale utility-scale projects, and the grid being the only way to deliver electricity. They had severe problems with finance. In terms of access to working capital that would help them maintain an inventory, provide the energy curvatures practice to China is also necessary. You know to understand the demand side of credit-poor households who might not have had the Capital to pay. Off of our solar homes, that had one goal, but we're willing to take it on in three installments. So then your bank financials will support that. Then there were problems on the skewed side in terms of have These are small startups which had an engineer who is also the entrepreneur is also the Finance guy, who clearly has one partner who's trying to do the marketing so you know they're running a business is actually a lot Of other things, and we can't just rely on one person, so building filling the skills gaps and then there was the technology gap in terms of how do you take very high-end high-tech products in the team and the space, but make them robust enough and cheap enough cost-effective enough to be deployed in very rustic conditions in rural India or small town India where you know there's hiding it. Heat dust, bumpy roads, and, you know, not always the best maintenance. So how do you make your Shut up major product in a way that it is able to withstand the harsh conditions of the field rather than voluntarily, and finally, the gap was that these guys were working in their niches and their villages, but there was a lack of a sense of that We are part of a larger network of terms. Trying to solve the same problem, and when we did this, we discovered that there were about 250 such firms in India operating and that I'm talking about 2012. Thirteen, so that gave us the idea to come up with a business plan. Or an industry platform for these entrepreneurs that would serve as a common voice to speak for these common concerns that they had on policy and financing skills on technology around being gorger computer network. So in 2013, we published the business plan, and then We went into the sort of evangelical mode, going around trying to Coach company to becoming members of this to look. We started looking at Human Tropic foundations. Father, not chocolate institutions, think tanks NGOs who could become the sort of fathers and grandfathers and grandmothers of his entity to Co-create it and build it up, so that took another 8-9 months of complaining, you know, standing on stools in restaurants. A group of entrepreneurs gathered in downtown, so, like, would you like to become part of this, and then, finally, as you said, it was formally created in 2014. So even though the idea at the business plan etc., was generated as a result of the research we were doing at TW. Because that as an industry, platform, industry, body it may. It should have its own independent identity, and that's how clean give. Up that makes.
13:54 Karan Takhar
that makes a lot of sense.
14:02 Arunabha Ghosh
It is the first Star Trek movie in the world, actually. Yeah, a lot of other, you know, in sub-Saharan Africa is that a lot of similar challenges were being phased, etc. But there was no single industry platform that represented here.
14:13 Karan Takhar
One entity, yeah, super interesting, and as I was listening to a talk, you gave at the Overseas Development Institute. You mentioned how that, in order to pertaining to the topic of attracting large-scale financing to the rural energy space, A potential channel to do so would be to expand the role of intermediaries beyond their traditional role meaning like as opposed to simply connecting. The money to maybe a company having the intermediary be an aggregator of sorts and combining a bunch of these smaller projects going into the field to do so, and then taking this portfolio of projects to the larger financial institutes. I'd love to hear your thoughts. Could you expand on this concept of an intermediary as an aggregator interview on how to attract larger-scale financing into the rural energy access space?
15:18 Arunabha Ghosh
Currently, the basic principle of aggregation is a twofold one. You are able to get scale by reaching a much larger number of beneficiaries. You could get scaled by giving money to one big project that will be sort of the ethical needle tilts more towards impacting a lot more households etc., or beneficiaries than one goal. That's one principle. The other is the principle of spreading risks. When you're not concentrating, you're resting only one of an entity that which borrows money from you or in whom you invest. These two principles stand against the criticism of small projects, which is that the transaction cost of evaluating them, doing due diligence, giving the money, giving the investment, and then or taking the loan repayment and all of that makes it very, very. Transaction costs heavy, which is why big investors. Kind of. We're away from smaller and smaller projects. Not bridging these two, the potential to impact a lot of entities with one goal and spreading this as and on the other hand, the transaction costs challenge is the goal of the aggregate, right? It's the aggregate. On one hand, is able to give a diversified portfolio that reduces the risk to the investor. Or to the creditor, and is also able to, on the other hand, impact a large number of households and do it in a way that the transaction cost comes down because it takes on upon itself the ability to do that, made a little. Then you actually potentially have a win-win. Now goes on paper that found or intuitively that sounds right, but in practice, that still is difficult because financial systems are not always geared towards helping out those in need. Money clothes are not where the sun shines. The most money flows or circulates within capital-rich regions. Your ECON 101 because your money should flow from Capital, reached Capital Region to get a higher return. But actually, money keeps circulating in couple retreats, and you have to break that. Cycle, and that's where we call the aggregation, warehousing, etc comes in the next big issue here is what kind of projects are we aggregated Are we aggregating only distributed energy projects in urban areas Are we also looking at rural areas Are we aggregating projects and use only one type of technology Or are we looking at a diversification of technology so it took solar micro hydro biomass And so forth And now we are aggregating only in one country or one problems Or are we aggregating across Country bills answer These are variables and variables would vary depending on the type of aggregator That's taking ability of the aggregate of the capital base for the aggregator, and so forth, and these are strategic decisions that aggregators would have cake, but regardless, he chose one technology, one region You know, I'm just rule areas There is still a potential speed impact, large number of beneficiaries, and really a service profile, and I wish if we begin to now square this logic with What I believe Is going to be an Increasingly distributed energy system in the world, because technology will make the users the demand side much more in control of energy use energy sources and the appliances that use this energy, there are We are actually going to enter a world where Distributed energy providers and consumers are going to be gradually coming into the majority and therefore the role of such aggregators will become even greater. I think the period of large entities in certain countries is one energy utility is now kind of coming to a close Then it's maybe a macro one or two decades before the energy system is going to look very different, but it's better to prepare yourself for it so you have the energy technology people you have the chain tech people to mine will have to develop platforms that can facilitate these transactions. You have the regulators who have to become much more nimble, and you have the consumers will also become true. You know consumers, so I think there's going to be a lot of disruption at different parts of the cycle, but it also opens up a whole new opportunity for new jobs, additional jobs, distributed routes. Top creates seven times more jobs in India than you killed solar, and you can sort of create more jobs than cold. So whether we're looking at jobs, so they're looking at growth, or whether you're looking at sustainability, I think there will be a big role in the district managers.
20:42 Karan Takhar
And just wrapping it up now 'cause I know we don't have much time, but I really want to ask you this as I know. You were on the India US Taskforce with the Center for American Progress, and I actually worked or interned there a few years back. But as the Fulbright Scholar from the US to India? It is really getting engaged in energy issues in India and is looking to kind Of bridge it further partnership between the US and India. I would really appreciate hearing your views On what role you think. The US can play in terms of Partnering with India, specifically in the renewable Energy space. Could you talk a little bit about this?
21:31 Arunabha Ghosh
Show I've been part of the in the US Stack 2 dialogue on climate change and energy. Since it began in 2010, and now it's been exactly ten years, just short of 10 years, that we've been having this dialogue that we had a lot of calls just a couple of weeks ago. But to answer your question. Karen, I mean, I would have Had many types of answers. During the course of this past decade, but To answer your question now, I would say that what the US can do for India in energy isn't on climate change and energy access is entirely dependent on what the US wants to do for itself and let me just expand on that. Ten years ago, India was just about getting started and on its national Solar Mission. At that time, they had less than 20 megawatts of solar power. Now India has more than 87,000 megawatts of solar and wind deployed, right? This is the story of 1 decade. Also, ten years ago, the US was in the middle of what was called the Sunshot program, where technology developers the innovators were being encouraged to bring down the cost of solar from more than $4 or what to less than a dollar a Watt. This was The period of. Focus on technology. But here, the country where which has a lot of energy deprivation can rejoin hearts. Over the course of this decade, many other changes happen 1I significantly ramped up its targets for renewable in 2015 and announced will aim for 175,000 megawatts of renewables by 2022 last year in New York. At the Climate Action Summit. The Prime Minister announced earlier. Aiming for 450,000 megawatts, which is making the other largest renewable energy market in the world. So in the past, about five or six years, it's become more a story about finance, not just technology. It's become Where will the large institutional investors, the pension funds of in the United States, or in Europe Insurance for the large capital investors. Where are they going to get big markets where they're gonna get short returns, and it's only merging economies? Emerging economies like India, where energy demand Is still on the upside? Not like the US, where the energy Demand it slapped. But if that money could be invested in clean energy infrastructure, you actually service that growing energy demand. We feel the energy access gap, but you also create a cleaner infrastructure, and you get higher returns. So that brings us to the present. Like it was technology in the early part of this decade, But we lost. I never did speaking about finance and the cost of finance in the second half of the last spectrum. What will the decade of the 20-20s drink? That really depends on how much the US remained invested in its own energy transition in its own shift towards unions because that's where we will now look at not just technology and not just finance but business. Because as I was answering this earlier, the business models of energy will change, but nature of the enterprise in energy will change the scale of the enterprise, and energy will change the distribution of energy production, and consumption will change Darkness that is needed will come from innovation in financial technology In energy technology, in behavioral science. In being able t tap, larger volumes of Capital and then putting it into very small projects and the unit is not gonna keep or shifting with its own energy transition. It will miss out on this next phase. the shape of enterprise and energy that will change in emerging markets like yeah, so it's no longer really how great your module and your panel or the wind turbine, and it's no longer just about how much Capital you have, it's really what are you looking over the horizon. T spark the business opportunity in servicing the energy demand of highly aspirational but still energy that drives people. We begin to crack that, then the US and India can work together in Southeast Asia, can work together in sub-Saharan Africa, can work together even in Europe or North America, where this combination of High tech But small bits of finance with innovative, nimble business models can actually begin to service. A lot of small businesses in the United States. W recently launched a program, a T, that we called powering livelihoods, which is basically about it's a $3 million program announced to invest in Companies in rural India. Like news, distributed energy cannot light up a home, but to power up, we will enterprise. A d our estimation is that this mark. I charm and nonfarm applications, between energy in rural India and rural economy in India alone. It's upwards of $50 billion. S this market will not get serviced by the energy architecture of the 20th century. So really, what the US can do with India? It happened in the market at the so-called bottom of the pyramid. B t, which nearly opens up a whole new set of opportunities for all sorts of innovation. As it stands, right?
27:46 Karan Takhar
Thank you so much, Doctor Ghosh, for your time that was.
27:49 Arunabha Ghosh
Thank You So much, Karan
27:52 Karan Takhar
I hope you enjoyed that episode, and do check out the show notes For more information on my guest. S e you next time.