Energy Transition – Where do we stand?

<p>Energy Transition has been the watch word across the world for the last few weeks since the COP 27 at Cairo, Egypt.</p><p>Our Prime Minister and Power Minister have also been saying that we are in the Transition phase. India Energy Week in Bangalore was held in the second week of Feb 2023, where again, most people spoke about Energy Transition.</p><p>From most of the discussions, people seem to think Energy Transition implies shifting from brown power to green power.</p><p>Well, though that might be the one that is visible from outside, there are multiple parameters that are changing the very equation of political and economic powers across the world.</p><p>Let us look at what this paradigm shift in energy really means!</p><p>We can look at the impact of this Energy Transition from three perspectives.</p><p>Energy was, possibly, the root cause of most wars in the last century.</p><p>Impact of Oil prices, that determines the energy prices, on world economy and politics does not need highlighting.</p><p>The same can be said about coal. It was called in the earlier days as Black Gold. Governments across the world levy taxes on all these energy forms and are totally dependent on their sale. They lease out coal mines for exorbitant rates to mining companies and make billions of rupees! Fuel taxes are one of the largest sources of funds for any government exchequer.</p><p>So, when the energy transition happens from the traditional energy sources to green sources, almost all governments across the world will lose money! No wonder that governments quickly try to impose any or all types of taxes on green energy sources!</p><p>But really speaking, they do not have many options since these are not like coal or petrol which is a consumable energy source. None of the energy sources that come under green are ‘consumable’.</p><p>Imagine taxing the sunlight or the wind versus coal or petrol! That is the difference I am talking about.</p><p>Last year, after nearly a decade, growth in conventional energy sources such as coal and gas rebounded and grew to new heights. Reason: Ukraine war. Recall, what I wrote first. Most of the wars in the last century had energy as an underlying current.</p><p>Let us move on to the second major impact!</p><p>This is also something that the current economically powerful, find difficult to accept. Unlike the energy sources of the earlier generation which were concentrated in certain geographical locations, this source generation of energy that we are moving to, are universally available. This is not going to lie with anyone specific. Everyone can make use of the power source and generate power for themselves and for others!</p><p>So, what do you do?</p><p>They try to set entry barriers making life difficult for common people to get into it. Look at what is being done by the Electricity Regulatory Commissions. They are but a reflection of what is happening across the world.</p><p>One of the latest orders from a state regulatory commission says that even if you generate power yourself, you will have to pay Rs.1/- to the distribution company. Of course, they have a convincing logic to push it through!</p><p>In other words, from being a select few, for power generation, the new era will have a distributed generation of power. Every one of us can produce power from a freely available source of power which cannot be claimed by neither the government nor any owner!</p><p>Again, compare coal and sunlight while one was auctioned and owned by few, the other is universal.</p><p>Finally, the third paradigm change that is being ushered in by the Energy Transition is what is called the ‘irrelevance of Governance’. Though Governance is part of the Environmental, Social and Governance (ESG), Governance is being slowly but definitely, sidelined.</p><p>Internet was one of the first steps in rendering governance irrelevant, melting away national boundaries, expanding cities and homes to encompass the entire world. The change is still on, with government fighting close battles for currency control, media control, etc.,</p><p>Energy transition is the energy industry’s version of internet!</p><p>It is only a matter of time before every house will generate and meet its own power requirement. So will industries! They will plan for their energy needs and consume out of that. Guys who ‘buy’ energy will become uncompetitive! ‘Have your own power source’, will become the mantra.</p><p>Energy Transition is path breaking; a paradigm shift in human evolution.</p><p>We are unable to see the changes creeping in because it is happening slowly but steadily. It will be all over us, even before we realize it!</p>