Why Iran war is India’s Edison moment

If there is one learning from the ongoing Iran War, it is this: Now is the perfect time to revisit our energy transition strategy and increase the share of electrons in our economy. They are already a key power source for electricity for Indian households, but we need to cannonball efforts to make it a source for industrialisation -- to manufacture molecules, materials as well as machine learning.Till recently, “electro-states” or countries that are weaning away from their legacy fossil fuel addiction to create an economy that underpins electrification was an abstract concept rooted to a Utopian zero carbon future. But Iran’s strategy of hitting critical oil and gas infrastructure across the Gulf has exposed how inexpensive weaponry like drones can wreak havoc on global energy markets. The ongoing war in the Middle East should be a good window to power our imagination.You may follow our live coverage of the West Asia war hereA core metric of an electro-state is how much of total final energy demand is met through electricity. Across solar panels, wind turbines, electric vehicles, batteries, and high-speed bullet and metro rail, China has built the world's largest and most comprehensive clean-energy supply chain and now leads not only in production capacity of clean energy resources, but also in the speed and scale of utilization. The shift has more to do with strategic intent and flexing geopolitical muscle and less with morality.World economies have traditionally needed fossil fuels to function. Petrostates like the Gulf kingdoms, Russia and even the United States have always leveraged their control over supplies of crude, coal, gas and other extractive resources in diplomacy, influence global energy prices and dictate global order. Fast growing countries like China and India imported these fuels to build their industrial backbone and move their economy but at the cost of the environment and exchequer.Of late, nations with abundant sun and wind are trying to flip the equation in a low-carbon world. A combination of industrial policy, subsidies, long-term investments has made Beijing an indispensable player in the global energy transition value chain. Since 2019, China’s solar panel export volumes have trebled. That should be our cue too.Even then, it’s impossible to make a full transition overnight. China will still need 600 GWh to meet electricity growth to meet the 2026 projections of China Electricity Council, a trade association, in spite of their breakneck build outs. India -- the second largest net oil importer after China -- will be no different. Fossil fuels like crude and natural gas (LNG/LPG) are essential to move our economy, run our industries and households. Much like China, coal fired thermal power has made a comeback in recent quarters and has absorbed much of the short-term war-induced pain of the domestic power grids. But renewables coupled with battery storage are slowly taking over electricity supply. It is in fact already playing out. Our data centres are fed by discom power which is turn draws 30-40% of clean power under mandatory purchase obligations. From transportation to smart buildings, everything that can economically electrify is going electric, pushing up the share of electrons in GDP to 18 to 20% per cent, said Mahesh Kolli, Co-Founder of Greenko Group, a clean energy company, in Davos this year.Half of our crude’s oil demand comes from the transport sector. With Indian railways leading the charge for electrification, it is changing at a fast clip. Now automobiles too are fast changing gears. 60% of our three-wheeler sales are now electric, the highest in the world while 1.27 million electric 2-wheelers were sold last year alone, a 40% Y-O-Y jump. Even electric cars have exceeded 5% of sales at 60% lower oil demand per person than China and are undercutting internal combustion engines on price.A mad scramble for renewable options won’t stop our reliance on imports with know-how replacing crude oil to make us a technology colony of China -- which controls the lion's share of the solar manufacturing and battery supply chains – instead. But in the long run, cheaper electricity is the only way to catalyse homegrown manufacturing, a multi-decade lost opportunity for us. Consistent high cost of electricity – double of peers -- have forever hamstrung our efforts.Also read: US intelligence chief Tulsi Gabbard says Iran not restoring nuclear enrichment, challenging Trump’s justification for warIndia generates a third more economic output per unit of energy than China today according to Ember, a British energy consulting firm. It's primarily a function of the nature of our industrial growth. Unlike China’s construction-driven, manufacturing led development path, India’s economy has always been services-led. Our cement and steel demand is a fraction of China’s. But newer or even mature technologies like elctrolysers can accelerate change. Unlike the Middle East, which still predominantly uses gas as feedstock, we are already seeing local players branching out to make green fertiliser and aluminium – two large user groups of natural gas – from alternate sources like hydrogen. Still, fragmented decision making, ennui of incumbent industries have tripped the mega ambitions of the National Hydrogen Mission to scale up 5 MMT of annual production. Implementation and focus, especially when crude prices are volatile, will be key to make guzzlers of imported energy like petrochemicals also bite the bullet.If one believes a robust electronics eco-system is the pathway for an electric future, then the near six-fold surge of our emerging national champions should also be a strong pointer. As would domestic mobile phone production that has leapfrogged from 2 million units in 2014 to 300 million a decade later. Such capabilities are also rubbing off on adjacent spaces including solar panel manufacturing batteries, and EVs. The shift into upstream components is similarly pronounced: solar cell manufacturing, virtually absent a decade ago, has expanded to 18 GW. Hello Solarpunk.The tiny specks inside the atom have already powered the third – digital -- revolution, and they may hold the key to the fourth that’s already upon us.