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Powering Progress: Corporate India’s Pivotal Role In Renewable Energy Transition

“A mix of direct renewable energy consumption from the grid, on-site generation and strategic use of energy attribute certificates can significantly green their energy profile,” writes Rohit Bhagwat, office managing principal, ZS and member of the global ESG steering committee of ZS.

India stands at a critical juncture on its path to a renewable energy-powered future. With targets to reduce carbon intensity by 45 per cent and achieve 50 per cent renewable electric power by 2030, the nation urgently needs to revolutionise its energy landscape. While the government has laid the groundwork with policies, the sheer magnitude of this green transformation demands a powerful partner, that is, the corporate sector.

With over 1.7 million active companies registered in India as of May 2024, businesses have the collective power to turn the tide. These corporations can serve as catalysts, propelling India’s renewable energy revolution from ambition to reality by influencing a vast network of stakeholders, from customers to suppliers.

Corporate strategies for renewable energy adoption

As India strives to achieve its target of 500 GW of renewable energy capacity by 2030, the role of corporations in driving this shift cannot be overstated. Businesses should focus on their energy-intensive operations, including office spaces. A mix of direct renewable energy consumption from the grid, on-site generation and strategic use of energy attribute certificates can significantly green their energy profile. Businesses must set the pace by committing to 100 per cent renewable energy for their offices within a clear timeframe. This move will not only reduce their carbon footprint but also send a powerful message to the entire corporate ecosystem.

Moreover, companies should leverage their influence to advocate for supportive policies by engaging with policymakers, regulatory bodies and industry agencies. This can include pushing for streamlined approval processes and robust grid infrastructure development.

To ensure these initiatives take root, the push for sustainability must come from the top. Establishing dedicated governing bodies to drive positive impact and monitor progress embeds responsible practices throughout the organisation, overseeing everything from initiative management to risk mitigation and auditing.

Additionally, by adopting efficient business travel practices and options for employee commuting, including the use of electric vehicles and leveraging technology for remote collaboration, corporations can further reduce carbon footprints without compromising business effectiveness.

Greening the value chain

The ripple effect of corporate action extends far beyond their immediate operations. By integrating sustainability into work, partnerships and operations, large corporations can drive environmental responsibility throughout their entire supply chain. Setting renewable energy targets for suppliers and supporting them will also help smaller businesses overcome barriers to renewable energy adoption and create a network of environmentally conscious enterprises.

To foster a resilient supply chain ecosystem, corporations can establish sustainable procurement functions, require suppliers to follow robust environmental codes of conduct and invest in capacity building. This can be achieved through workshops, technical assistance and facilitating access to financing options for renewable energy projects.

Financing models and driving innovation

With India facing a staggering USD 190-215 billion renewable energy funding gap, as estimated by Moody’s Ratings, corporations have a critical opportunity to bridge this financial gap. Companies with substantial cash reserves are well-positioned to make direct investments and explore innovative financing models.

The renewable energy sector in India is poised to attract over USD 250 billion in investments, presenting significant avenues for corporate involvement. This influx of capital can drive technological advancements and innovation in the sector. Corporations can accelerate this trend by allocating resources to R&D, especially in crucial areas such as energy storage to address intermittency issues in solar and wind power.

Collaborations with academic institutions and startups, supported by initiatives such as the government’s Atal Innovation Mission, can foster robust innovation ecosystems. These partnerships allow companies to access cutting-edge research while nurturing the next generation of renewable energy innovators.

The Indian government has laid a robust foundation for renewable energy growth through various initiatives. Key programmes include the National Solar Mission (NSM), which has helped India achieve over 50 GW of solar installations by 2021 and Renewable Purchase Obligations (RPOs), which mandate minimum renewable energy procurement for utilities and large consumers. These policies create a conducive environment for corporate involvement in the sector. The government’s commitment to emerging technologies is evident in the doubling of funding for the National Green Hydrogen Mission. With India targeting the production of five million tonnes of green hydrogen by 2030, corporations have a unique opportunity to lead in this nascent field.

Meanwhile, Corporate Power Purchase Agreements (CPPAs) have emerged as a powerful tool for driving renewable energy growth, highlighting the increasing corporate appetite for clean energy procurement.

The imperative for action

Climate change poses not just environmental risks but significant financial challenges. The impacts of climate change could cost companies up to 10 per cent of their annual sales and 4 per cent of their market value, as per a World Economic Forum report, “Accelerating business action on climate change adaptation.”

In this landscape, corporations have a pivotal role to catalyse India’s renewable energy revolution while strengthening their own resilience and competitiveness. By embracing renewable energy initiatives, companies can fulfil their corporate responsibilities, contribute to sustainable development and establish themselves as leaders in the green economy.

The triple bottom line of profit, people, and planet aligns perfectly with renewable energy adoption. In this transition, consulting and professional services firms play a crucial role, guiding established corporations and startups alike to navigate the complexities of renewable energy adoption through innovative and cost-effective strategies.

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