Podcast Details


Gaurav Gupta | Head of Global Energy Practice, Dalberg

2022-07-29
Gaurav Gupta is the Global Head of Dalberg’s Energy practice, which is one of the world's top impact consulting firms. As the founder of Dalberg's Asia practice, Mr. Gupta has been a key contributor for Dalberg's growth and primarily focuses his efforts in the areas of energy access, sustainability, access to education, and poverty alleviation. In this conversations, Mr. Gupta breakdowns decentralized energy applications and provides his perspective on what he believes the future of energy to look like.
Topics covered in this podcast ​
1. A brief introduction of the speaker and their involvement in the energy sector
2. What are the categories of energy Dalberg works on?
3. Is Dalberg's focus on centralized or off-grid?
4. Will there be large scale development in decentralized energy distribution across India?
5. Will India be an established global leader in the renewable sector moving forward?

Transcript


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 Fulbright 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, we will be speaking with Mr. Gaurav Gupta, who's the global head of energy for Dalberg Advisors and is the founder of Dalberg Asia practice Dalberg Advisors is one of the world's leading strategic advisory firms and primarily focuses its attention on global development issues. As the founder of the first Dalberg office in Asia, Mr. Gupta has contributed to the firm's growth from Mumbai to Singapore. In Delhi has been working primarily on renewable energy, energy access, sustainability, access to education, and social justice issues such as poverty. In this interview, Mr. Gupta talks about his background and firms’ contributions to the renewable energy sector in India and analyses the topic of centralized and decentralized energy distribution, as well as the potential of India becoming a renewable energy leader globally. I hope you enjoy this conversation with Mr. Gupta.
Hi Gaurav, it is really nice to have you on, and really appreciate you taking this time. I was reading about your professional journey and found it super fascinating. Especially considering that you founded Dalberg's first Asian office in Mumbai and proceeded to set up Dalberg offices in both Delhi in Singapore, but prior to talking about how that came about. Could you briefly introduce yourself so that listeners can get a bit of an understanding of what you do in the extent of your involvement in the energy sector, you plot a brief introduction.

02:56 Gaurav Gupta
My sweet. Nice speaking with you, Karan, and thanks for sort of reaching out briefly. I wear a few hats. I had Dalberg here in Asia, but I also had energy and environment practice, and one of the things that, in fact, drew me to starting Dalberg in Asia was because I was really keen to work on the Nexus between poverty and energy, and I thought one of the best ways to do that is to develop a platform in which you can bring a whole team together and, you know, management consulting advisory workers. A really good way to both engage with multiple problems and multiple clients, but also, it's a great talent base. It's a good way to bring young people into the fold and have them sort of work on these challenges and bring a team to solve the problem because prior to this, it helped start an NGO focused on climate change. I was working on some social enterprises, but you know, those things were very much with, you know, one or two people, and I thought it would be great to try and develop a really strong talent platform such as Dalberg to bring more people to this kind of issue. Of course, we as a company now, it's its advisory coming up work across multiple challenges, so you probably can hear my daughter in the background. I want a phone to call her favorite thing is to come in and add her voice. It's just, but so I think that's sort of the genesis of it. But I, I guess my, my background is I started as a management consultant, the Boston Consulting Group worked a lot on social issues, had an opportunity to work on social issues with them, then moved to India from Australia because I wanted to focus on working on, I guess it was now broadly known as a social impact space, like working on social justice issues. Where did thought of working on sustainability but also became very interested in other issues, and education, poverty, and so forth? So that's what led me to India, and within a year or two of being India's stunt double. But now my association with them was that, you know, that stage, a very small company, I think 60-70 people around the world, mainly in the US at that stage, and as such, we're almost operating as a franchise of you know, different entrepreneurs starting different offices and I happen to know the CEO of Dalberg at that time because she had worked for an organization I had set up in Australia, and when she heard that I was in India, she sort of called me up and said hey, we don't have anything going on in Asia would you be interested in starting up dalburg in Asia, which is interesting because it's very entrepreneurial opportunity, you know, small organizations, so there isn't really any capital or systems in place. So, it's really, you just get given the right to use the brand name, and then you're left to think about how to form what, what is the appropriate sort of advisory organization for this region and and and this country. So, I had, uh, it was a really interesting Journey, and I think we're now about 120 people, mainly in India and expanding across. Asia at the moment, and yeah, it's been a lot of fun, and energy is one of the areas that I really do a lot of work in, so happy to answer questions on that.
 
06:05 Karan Takhar
That's amazing. Yeah. So, during my time in Delhi, and also just traveling across India, I met a few people who worked at Dalbergh and were definitely all super Smart, and yeah, I was just curious as to, so in terms of what the Energy Group focuses on, could you talk a little bit about the different areas within the energy that Dalberg works, works on Catholic areas?

06:32 Gaurav Gupta
Yeah, I think there's a bit of as a bit of background. You know, as a management consulting firm where we have our practice areas, you know, all the big management firms like practice areas, you know they will, they will have agri, consume, mining, petroleum, whatever, right? We are practice areas are organized around challenges that we want to solve.
Because we're a social impact, we only focus on helping our clients optimize for social impact. So for us, energy is about access to energy, and it's about sustained sustainable energy. So, the areas that we work on energy either a mix of these two or, you know, these things individually. All our projects will either be about saying how do I get access to people who don't have access or how do I ensure that the energy is more sustainable because these are the two big social, you know, overarching social challenges of energy, right? And so that's it's it's in that spirit.
That we engaged in, and then the first area that we really focused on was off-grid energy because it was a Nexus of, you know, a billion people at that time. Even more back in 2009, we sure started engaging with this issue. Well, people who just had access to zero electricity and so, you know, some very poor development outcomes as a result of that, and at the same time the fastest way to get energy to them, and arguably the cheapest and definitely the cheapest now was through renewable land. So, you could really attack both problem sets of how do you, how do you deliver sustainable energy and how do you also increase access to energy. So we really became interested in this whole space of off-grid energy, which is, you know all these people who miss out on the grid or even if the grid's there, there's no electricity coming through it. How do you set up solar home systems, solar lanterns, mini-grids, and so forth to serve that sector, and we had a real, I think, client started this a little breakthrough mode, and suddenly there was a sense that, you know, a solar panel combined with an LED was actually a pretty robust technology for delivering at least basic lighting in a cost-effective way, right? And people like the IFC, World Bank Group, several organizations tried to look at this and say, OK, is there an opportunity to be transformative with this change in technology? Gee, in at least providing basic lighting because you're talking about a situation where over a billion people, we're not even getting basic lighting in a cost-effective, healthy manner right there about burning kerosene maps, even in my early days growing up in India, my hometown would have at least 6-7 hours of kerosene use each day because electricity would come for four hours. It's not even that much in our past, right? And even today, there's still a lot large or unfairly large amount of the population that still relies on kerosene. So even something as basic as lighting could be potentially solvable with this, with this idea of leads. So, they came to us in 2009. The IFC was talking about, you know, doing a big conference in Africa, and it's, you know, they asked Dalberg if we would be willing to write a report for that conference to talk about how the value on this new technology and this approach for poor people and I think what they're really afterward this ability to describe what the social benefit of providing electrification and we actually had it's a great team that they had continued to have, and we had to chat with them, and you know, really try to understand what's the actual strategic objective which ultimately from an IFC perspective was look, can we get the private sector involved. This used to be a space of, you know, providing electricity to the, or used to be a space for NGOs and government, right? And can we get the private sector involved? And so, we thought a bit about it. So, like, what's the point of writing a report that says electricity is good everyone knows. Instead, we brought a very different report, and in fact, I saw at that time were very stunned. They were like, this is not what we were expecting. We're expecting some 6 Page, you know, simple report that can be shared around in the in this conference, and at that point, the conference was very small, but we wrote this like a large report that talked about, you know, there's $20 billion being spent by the poor in substandard solutions for their lighting needs. And there's electrification needs, you know, batteries, wax candles, kerosene, right like that, that that actually adds up to a lot of money, and that this could be displaced by a lot of these new technologies which are cheaper healthier and higher quality, and we wrote a report about how much money could be made in this sector, you know that within the next ten years you could see. You know, a few billion dollars of revenue, and you know, we predicted 95% year-on-year growth of solar Lantern manufacturers for the next ten years, and so our report, So presents some pretty glowing numbers which, you know, which you know initially was taken with a grain of salt, but actually, those numbers were beaten in the end we are numbers could be argued as being slightly conservative, but that was like the start of the journey because it was one of the first reports out there in the market, that treated this as a sector that gave shape to it by saying, look, there's this much money to be made, these are the players out there, these are the technologies, these are the products today, but these could be the products in the future, and in fact, it allowed people to, you know, entrepreneurs around the world to say, look, here's a report that says this is, you know, two $3 billion market or a future $20 billion market. Give me funding, and I think that, really, I think, firstly very impactful, but also gave us a lot of tailwinds to really make our mark in the space of off-grid energy, which is a space we continue to a significant amount of work, so there's a little bit of a story of some of the things that got us really started.

12:22 Karan Takhar
On this, do you also now work on the on the good side of things as well and get more of the centralized level, or is most of the focus still largely on the off-grid side? Just curious.

12:36 Gaurav Gupta
Yeah, no, it's a good question as we as we've grown, and as you know, as I mentioned, sustainability is a really important aspect of what we do, a lot of sustainability. It's also, you know, we work on economic growth in poor countries like you have to address the energy challenge at multiple levels, including the large infra level. So, we do work on grid as well. I mean, with less technical folks on grid, I think the questions around on grid will be around. How can you find? Good, financing for them is also on the grid from the perspective of a renewable, right? And we've been doing a lot of work on energy trading. So how do you set up good systems and legal frameworks so that countries can actually trade energy, import, and export energy? Because if you want renewable energy to really flourish, and you may have seen, you know, India's been talking about this once-on-one grid as an example. But, you know, because renewable energy is not evenly distributed, you want to be able to have grids that can cross countries, and people can wield them, you know, solar energy that they're generating from their desert across to our country next door. Australia is a great example. There, there's so much wide open space in such great sunlight and the ability for them to actually export a lot of solar energy through, you know, a connected grid. It might go up to Southeast Asia. And so we're working on a few of that kinds of issues as well. So, yeah, on the grid is, and we've helped our clients think about renewable energy investments, which summer Off-grid, Smart grid, and so forth. So yeah, it's definitely a growth area for us.

14:08 Karan Takhar
Yeah, so one of the values that I believe us to be like the very key value in renewable energy is the decentralized nature of it, and like, just for my understanding of like, do the conversations I've had. I feel like India has largely focused, at least, like on the communications side of things, on these solar parks, and there's been a lot of focus on like centralized solar parks, which have been super successful just over the last ten years, or so, but I'm curious as to like to hear your thoughts on whether you like well, do you think there needs to be more of a focus like on the decentralized ownership us like the renewable energy technologies, we'd love to hear your thoughts around this. Like do you see there to be a transition away from like the traditional model of generation to transmission to distribution? Do you think that will continue to be the dominant model, or what are your thoughts around this?

15:16 Gaurav Gupta
Yeah, look, I think starting at the sort of 30,000-foot level, there is a version of the world in which, you know, there's, you know, millions of decentralized points of generation that are then connected up with a smart grid. Right? And that means that you know it's, it's a bit like how the Internet will work where you take down a load here doesn't matter, and it just starts coming from other places, and so far because I think the version of the world we're in right now is that there's a centralized it and then there are pockets, and in some countries, those pockets are very large, where there's no centralized grid, and if you know, given today's infrastructure costs, it doesn't make sense to put that out there. You're better off just creating localized, and so you create these island-type approaches, you know, grid and then lots of little islands. And that's just because there are huge sunk costs in the grid. Today and then, you know you've got this wherever this like fresh investment. It makes sense to go decentralized. Now the question is whether that, you know, if you project that forward ten years, 15 years, if that's going to sustain, right,
It may actually be more cost-effective, more robust for us to move completely to a decentralized system, but still linked up so that you can take care of redundancy, so there's a smart grid that's, you know, managing power loads here and there I don't know if I have an answer to that like I kind of say that I. Cannibal town thinks one is better, but what can I think, I do think that infrastructure is a lot more robust, and I do think that technology is heading in a direction where the minimum efficient scale is coming down so significantly that the only advantage that centralized really had was scale, right? Like you, you came up with these things because it made sense to build a 400 MW coal-fired power plant. You didn't build A1 MW coal-fired power plant, but renewable energy has very different scale economics. They're still there. Yeah, but then you also have these economies of scale because, in terms of the kind of, you know, sending power long distances, it's itself. A lot of it is very expensive. There are transmission losses and so forth. At the same time, renewable energy is a lot less predictable because you do have, you know, days, and there's no wind and, you know, sunny days and non-sunny days and so forth. So you need to sort of create if you are going to make decentralized work. You do need to create an interconnected grid with multiple points of generation so that it can be so it can. You know we'll power to where it's most needed and where power is being generated at this moment. So I think that to me feels like a much more robust system. It's it feels like a much more sustainable system, but whether that will naturally happen over the next 10-15 years. Accounts ensure a lot of modeling that needs to be done, and there's a lot of incumbents, right, and sunk costs in the system today that make it hard to know. What will be the right answer? It's, I mean, if your project, you know, 30-40 years forward, it's very clear that unless there's some big technological shift that, you know, large scale is not going to be such a huge issue, there's not going to be huge scale advantages in terms of generation, in which case decentralization makes a makes a lot of sense, yeah. Thank you for extending.

18:36 Karan Takhar
On that, yeah, that made a lot. Of sense, and I'm just curious as to whether you see renewable energy as playing an important vehicle in India. Like to kind of leverage to like build partnerships on the world stage. Do you think India could be a leader in renewable energy?

18:54 Gaurav Gupta
Yeah, so, it's a great question, and I think it's it's at several levels, right? So, there's one level of leadership, which is at the innovation level. Right. You know, do we have the most cutting-edge innovation in renewable energy? Right? The answer to that is not we might get that, but at this stage where it feels like it's heading is a little bit similar to, you know, with pharmaceutical generics is, which is maybe we can get to a cutting edge approach to building things that others are also building, but building them cheaper, right, so production, innovation, perhaps, perhaps, but I'm not seeing a technological innovation coming out of here because we, you know, our R&D spend here and the labs that we have here are no match for what's going on on the world stage, and if you want to achieve leadership from a technical perspective, then I'm not saying it's not possible, but I haven't as of yet seen some major investment that people are talking about, that's. So now, if you're not going to achieve technological leadership, perhaps you can achieve manufacturing leadership, right? So, China is a good example of that that and China is actually now moving into technological leadership as well, but it had manufacturing leadership, right? It has been the bread basket of the world in terms of creating solar at a price that is incredibly cheap now.
I wouldn't say India can be a leader in that manufacturing space. And there's a lot of talk about people taking over from China in terms of manufacturing as costs are rising there. Hard to say, and certainly solar is. That's a broader question. So, there's just one example of a broader manufacturing capability that we need to have in this country that needs to also look at the ease of doing business and availability of cheap capital, et cetera, et cetera, right, like and human capital, so again to me, that's a macro question right now. I don't think anyone could claim that we've got some manufacturing edge that can be seen what we do have. I think it is at least momentum, and what seems to be strong bipartisan government will to be very forward-leaning on at least certain technologies like solar, right? So, the government had previously announced a whole bunch of policies and purchasing and so forth that has created a very strong sector in India that has strong growth potential. They've outlined some major targets, and that that marketplace creates dynamism because it allows a lot of companies that which you are you're talking to sort of entering to bed on the market for them to sort of set up scale manufacturing and so forth. I think the question, really, from a leadership perspective, is, will that translate into global leadership, but we will be exporting that out, and you know, I think, at a company level. You see some highlights when you're starting to see a few companies emerged that could potentially play regional roles or more, but I think the jury is out of the place where there may be an opportunity for leadership is at the political level. You know, I think the Modi government has spoken pretty strongly on solar. Yeah, the International Solar Alliance, which, you know, really started as a strong bilateral push from France and India, but it is a global body that is trying to think about the expansion of solar across the world, and it's got a lot of push from the Indian government. You know, it's one of the first international bodies, UN-style bodies, that is actually headquartered in India. So that itself is a signal, but it's early days for that institution, and you know, if the government gives it the right push, the right set of resources, and it's able to also generate lots of buying from many other countries, but then that can create a really great leadership platform, and even though that's an international body, I think people will just recognize is that a lot of its heritage was in India. So, there is a sort of a global political layer at which India can be seen to be a strong advocate or a leader in solar. What I would love is for them to do that but to also, you know, the fundamentals also to be strong, like, you know, can we be a strong manufacturing base? Can we be a technological base and not just for solar, right, so I think the on manufacturing based on technology, and technology base I don't think there are. There's enough there today to say we're going to be playing a leading role, but we can, and because the marketplace is here, it's a big, large marketplace. So that's an opportunity that we should be looking at.

23:42 Karan Takhar
Thank you. That was amazing.

23:43 Gaurav Gupta
Good luck with everything.

23:45 Karan Takhar
Thank you. I hope you enjoyed that episode and do check out the show notes For more information on my guest. See you next time.


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