It is critical that clean sources of energy are viewed not only from a technical angle but also from a holistic perspective, considering they could emerge as the primary drivers of energy security in the future.
Namita Vikas – Senior President & Country Head, Responsible Banking at YES BANK talks about the challenges faced by industries in achieving low carbon industrial growth and suggests few solutions to the high-carbon dilemma faced by key sectors like power, iron & steel and cement in her conversation with Renu Rajaram.
Excerpts from the interview:
Kindly discuss the ways of harnessing energy in a cleaner manner?
There are several strategies to harness energy in a cleaner manner. These predominantly include renewable energy such as wind, solar and biomass, and emerging technologies such as fuel cells. It is critical that these clean sources of energy are viewed not only from a technical angle but also from a holistic perspective, considering they could emerge as the primary drivers of energy security in the future. In our view, the key would be to ensure that the latest technologies can be scaled up rapidly and made available to society at the lowest possible cost.
What are the challenges faced by industries in achieving Low Carbon Industrial growth in India?
The key challenges faced by the industry include:
• The climate change crisis is still considered a long term problem and hence the urgency for reduction in carbon emissions is missing
• The newer technologies have an initial lag in adoption because of competition from old technologies and reluctance of implementers to take the risk
• Energy efficiency measures are low hanging fruits but are not understood well either by the entrepreneur or by the financiers
• India has numerous government schemes to support the Low carbon industrial growth, but these schemes are effective only in pockets due to red tape or other factors
• Lack of financial support for various models because of their unproven business models
Please suggest few solutions to the high-carbon dilemma faced by key sectors like Power, Iron & Steel and Cement that contribute to India’s development.
For the Industry:
• The industry should take a longer term view while considering Greenfield projects and adopt the most contemporary low carbon technologies
• For a short to mid-term perspective, the industry should consider efficiency improvement measures that can be implemented at lower costs and within the existing setup
For the government:
• Include new technologies in RBI mandated priority sector norms
• Judicious use of national Clean Energy Fund to create additional capacity for energy efficiency projects and renewable sources of energy
• Move towards a gradual reduction in subsidies on fossil fuel. Not only do these subsidies promote the use of dirty fuels but also put considerable pressure on the national exchequer
For the Financial Sector:
• Promote the Natural Capital Concept for natural resource valuations
• Provide innovative financial solutions
• Channel international resources for Low carbon technologies
Brief us on steps taken by YES BANK towards energy efficiency and reducing its carbon footprint?
YES BANK has taken a commitment to reduce its carbon emission intensity by a minimum of 5 per cent over the next year. To meet the commitment, we have instituted various programs to reduce our carbon footprint by reducing our electricity consumption and paper consumption. Some prominent initiatives towards reducing electricity consumption are server optimization, desktop rationalization, AC and Lighting rationalization. For paper reduction, we have focused on double-sided printing and paper recycling. We also have an initiative titled “War on Waste” which incorporates the 3R concept of “Reduce-Reuse-Recycle” to rationalize our resource consumption and reduce wastage. Going beyond individual initiatives, the biggest impact is created by spreading awareness among our employees on reducing their own footprint and being an integral part of the Bank’s collective efforts.
How can the emerging technologies provide interesting opportunities for the finance industry?
Most financial instruments today do not favour financing new technologies because of the enhanced risk associated with them, such as lack of proven business models, or lack of collaterals.
At the same time, the finance industry has some unique and interesting opportunities which would require innovative and dedicated financing mechanisms, for example, environment bonds and dedicated financial instruments based on government incentives. New technologies also provide an opportunity for the Indian financial sector to generate resources from international donors and financing bodies.
How should ‘sustainable building models’ be introduced in metros considering the resource shortages?
Our metros are in an urgent need for adopting Sustainable buildings models, given the extreme stress on the basic necessities essential for healthy living, including clean air and fresh food.
With the prevalence of air conditioning in modern buildings, there is a huge scope for achieving energy efficiencies by creating efficient building envelopes. YES BANK and TERI BCSD have undertaken a detailed study to explore this further.
Please discuss growth opportunities linked to energy challenges?
Low carbon technologies provide extensive opportunities for early movers in the industry through cost saving and resource optimization. There is also an increasing demand from consumers for organizations to be more environmentally responsible, and organizations can build strong positive brand recognition by being seen as front runners in the industry.