A golden opportunity for the energy industry in India

Circular Economy

Circular Economy

Circular Economy

Santhosh Jayaram | Partner,

Today with climate change being the buzz word another thought that has come to the fore is the need to reduce atmospheric emissions. There are just two adjectives on everybody’s lips: renewable and efficient. But one has to also realise that the energy industry is not the only industry where this kind of change is taking place. Though waste has become a contentious term, it has also given rise to a new way of doing business (more so in making energy) leading to a more innovative and sustainable dream for the near future.

The new philosophy is popularly referred to as the circular economy, This model of production and consumption is a design process for a regenerative economy that converts waste to wealth and creates enormous possibilities in its wake. It allows the life cycle of products to be extended through a wide range of practices that involve utilisation of waste, raising efficiency and continual use of natural resources. Thus, it is redefining economic growth by placing an increased value on natural and societal capital.

The growth story of any country is strongly connected with its energy demand. According to the Economic Survey 2018 -19, India had a per capita energy consumption of 24 gigajoules and a Human Development Index (HDI) of 0.64 in 2017 i.e. medium human development. Growth of the economy and improvement in the quality of life for citizens would require India to increase its energy consumption. The Economic Survey 2018-19 projects a requirement of quadrupling of per capita energy consumption in India to reach an HDI of 0.8 and enter the group of countries with high human development. Furthermore, to align with the global move towards decarbonising economies, India has been taking significant steps to increase the adoption of renewable energy. For example - India’s solar story through its compelling business case is maximizing the falling renewable technology costs as the key to future energy decarbonisation. The country has realised that it is cheaper to build and operate solar farms than to run existing coal-fired power plants. Having recognised this early, the government has shown increased commitment to ensure consistent growth in the segment. This in turn has helped the solar industry reach economies of scale in a short span of time, making India the cheapest producer of solar power. This move towards decarbonisation has a virtuous connect with the circular economy model.

Moving ahead, India has a substantial potential for energy generation from urban, industrial and agricultural waste/residue. Bio-CNG, biogas and energy from different wastes, such as cattle dung in rural areas or vegetable/food and municipal solid waste in urban areas, could be used for various energy-related end uses such as cooking, electricity generation and transportation. Based on the availability of cattle dung alone from an estimated 304 million cattle, there exists a potential for 18,240 million cubic metres of biogas generation annually. This is according to a case study titled - Biogas Generation, Purification and bottling development In India by the ministry of new and renewable energy. With increase in urbanisation, municipal corporations are also facing challenges in Municipal Solid Waste (MSW) management and are planning to put waste-to-energy systems.

Being a tropical country, solar energy has tremendous potential in India and is already witnessing strong growth. As the solar energy market expands, the volume of discarded products would also increase and without circularity for the materials used by the solar industry, it will cease to be a sustainable source of energy. A 100 gigawatt of solar capacity entails an estimated demand of seven million tonnes of materials, including glass, aluminium, silicon and silver, which can be retrieved and recycled, reducing the stress on resources. With the advent of electric vehicles and batteries, India also needs to plan for issues around conserving natural resources and addressing the end-of-life issues for batteries. Countries such as the U.S. and the U.K. have taken the lead in research by establishing battery-recycling R&D centres/programmes. 

The circular economy model can give a new lease of life to conventional energy sources as well. Industry symbiosis has the potential of utilising heat and material leakages from one industry process to another process. There are also possibilities in pre-production, production and customer interfaces wherein circularity can be a value enhancer. On the energy supply side, pre-combustion interventions, renewable energy, waste-to-energy, fuel conversion, recycling materials from energy production plants are ways of implementing circularity while energy efficiency, demand response and energy as a service are possibilities on the user side.

That the energy industry is looking to the circular economy is no surprise. With immense possibilities and substantial room for growth, India’s sustainable energy journey will greatly aided by this concept being ingrained into project conception to aid the resource efficiency journey.


(A version of this article appeared in The Financial Express on January 8, 2020)