There are four themes driving energy innovation in the developing world, according to the chief operating officer of Softbank Energy, a Delhi-based firm that develops solar energy on the global market.
Combined, these four themes put tremendous pressure on renewables innovation, Softbank COO Abhijeet Sathe said at Stanford University's Global Energy Forum.
"The way we have learned to fight, when you get into conversations with the Department of Power and people like that, is basically to be better on merit with no subsidy," Sathe said in a video released by Stanford. Renewables have increasing merit, he said, because they respond to "the four themes along which we’re seeing global innovation going--and going a little differently compared to the western part of the world."
1 Demand Growth
Underdeveloped countries are growing rapidly with populations dominated by young people under 25 who want access to electricity, Sathe said. "So that’s one aspect of what we’re seeing: undeveloped economies growing, a substantial number of people under 25 in that part of the world."
2 Air Pollution
Officials are burdened by pollution in cities like Delhi, where Sathe's office is. "I was once observing that the three cities that I shuttle between were pretty much three of the top five worst in air quality," he said. "Pollution is definitely a part that is playing on people’s minds in these parts of the world."
3 Cost
The developing world innovates differently than the developed world because of different cost incentives, Sathe said. For example, it's less necessary to innovate to bring down labor costs where labor is cheap and more fruitful to innovate against capital expenditures. "These happen to be territories where even 3 cents (per kilowatt hour) is too expensive," he said. "And there is probably not enough money for carbon credits and so forth. So that naturally creates the necessity to drive the cost down. And a lot of the time people approach cost as 'let’s cut things out,' but that’s not really the way to go about it. It’s about innovating and innovating faster. So what you see is incredible innovation."
4 Intermittency
At times renewable energy is exceeding 20 percent of the electricity generated in India, Sathe said, and that electricity is intermittent. That creates pressure for technologies that can provide grid stability, not only by driving down the cost of energy storage, but also by reducing the need for storage by developing effective management of renewables to balance the grid.
"This is where there is incredible cost pressure. And of course we’re building 25-year assets. We all want to do a good job about building and living up to that headline. Then it all comes to innovation, technology innovation."
Softbank Energy is an arm of the telecommunications firm Softbank Group that has specialized in developing large-scale solar power plants in many countries. Prior to taking the helm of Softbank's operations, Sathe was a vice president at SunEdison, and prior to that he worked for SunPower and General Electric.
