Can Indias Grid Handle More Acs Data Centres Ev Charging

TITLE: X_u3ha3TrEo CHANNEL: Unknown DATE: ---TRANSCRIPT--- In India we have not yet unbundled the last mile distribution with the last mile supply of of energy. You give a price signal which is large enough [music] when you start seeing change in consumer behavior both for average reduction uh of consumption at the same time market aligned reduction of consumption.

Could people be uh educated to moderate their [music] demand? I don’t think we have made a serious attempt at what is called uh classically DSM which is demand side management because we run it like campaigns rather than on incentives. We have hydro very limited as compared to the size of the system that we need. And one [music] important joker in the pack which is missing in India which is gas. Hello and welcome to The Core Report special edition. We’re talking about power and shortages, supply, demand, and what we’re going to do really in future as demand continues to spike and supply maybe struggles to keep in check. Uh I’m joined today by Vishal Mehta, India leader energy practice of the Boston Consulting Group. Vishal, thank you so much for joining me. Thank you, Govind. My pleasure to be here. So, we’re going to talk about power and I’m going to really start with two points. One is uh we’ve seen or already hit a peak power demand of 270 gigawatts just 2 weeks ago and we are really now dependent on rains coming in and maybe moderating demand, but otherwise things look like it’ll remain there or go higher. The other is that uh you’ve been now uh working with the power sector quite closely or the energy sector quite closely for some time and you visit a lot of installations on the distribution generation side. And you I understand you were at one such distribution utility recently somewhere in North India. What did you I mean, what is the sense that you’ve got when you look at now I mean, really what you saw on ground versus what we are facing as a national challenge now in terms of energy? Yeah. See, I think the one thing which has happened is for distribution companies because I visited one recently, it’s become very difficult to predict on what’s going to be the actual demand, right? I mean, there are 96 slots in a day in which you need to predict demand. So, it’s not like you predict an average number and you get it right. And then before the peak season hits, which is typically in India and you know, if it’s an urban utility then it’s summer and then you will hit the festive season in October etc. which is the next peak which comes in. So, your ability to predict how much is going to be the peak and how do you prepare for that? That has in my last 10 years of experience, 10 years back used to get pretty accurate in terms of how much it is going to grow. Secondly, what has also happened is aspirationally we have connected everyone now, right? I mean, of course you can argue whether what’s the quality of connectivity, all of that, but practically everybody has access to electricity. This is one very inelastic demand. So, you can’t go back on So, in the earlier days you would just shed load. You can’t do that once you already made the customer used to having 24/7 electricity, right? So, that lever has gone out of the utility. So, this time what I saw was real, I would say scrambling for last minute buying of power, right? If you have the infrastructure to deliver it to the customer then the constraint becomes for my peak, can I buy in the market, and that was a real, I would say stress moment for the utility because you know, if you’re going to buy power at like 20 rupees in the HP dam market, you have a regulator to whom you have to kind of justify that, right? So, it’s not just about supplying the power when it is needed, but also being able to supply it on an economic basis. But I think it’s become This year I’ve seen it’ll be a regular feature for people to be able to buy or people having to buy power at that high rates in these peaks, right? Because it’s the demand is there only in certain slots. It’s not across the board. And And you said there are 96 slots. There are 96. So, how is that? Can you break up break that up for us? So, in a day in 24 hours, you have uh the India scheduling system works on a 15 uh minute slot, right? So, basically, let’s say I am a big consumer or I’m a big utility, I have to tell the load dispatch center a day in advance that tomorrow this is the amount of load that it I will have in every slot, right? And there are penalties if I get it wrong. Right? So, both on under draw as well as over draw, I have penalties because that’s how the system scheduling works. If everybody schedules it properly, then the grid frequency remains at 50 hertz. If it goes over or above, the frequency starts getting disturbed and the grid uh you know, kind of uh comes into trouble. So, the So, everybody every large customer or every utility has to basically submit this forecast a day in advance, right? So, that is more to say how much power you will schedule. And then every utility has a portfolio of contracts, right? So, they have tied up long-term power, medium-term power, short-term power. Uh some they would leave to buy from the exchange on a spot basis, right? So, the spot also is is a misnomer because it’s not spot. You actually buy a day in advance, right? So, it’s called That’s why it’s called a DAM, which is day-ahead market. So, you forecast and you buy and then provide the schedule to the scheduler saying uh load dispatch center. So, you have a load dispatch center at a state level, at a region level, at a national level. So, all of these forecasts come in and then the scheduling of the power happens uh that way. So, think of it like all generators get pulled and all customers and distribution companies get pulled and these have to match. And you know, for every slot, so when you say 270 MW was hit, the 270 MW was hit in one particular 270 GW was hit, it’s in a particular slot that it would have hit, right? So, in that 15-minute slot, the demand went up to 270 uh GW. Now, to be able to say this slot is when you will get the peak is very difficult to to forecast and because of weather and because of many other reasons uh the forecasting has become extremely difficult. As earlier forecasts errors were like 0.5% 1% now it’s like 3 4 5% on an average. Right. And obviously high temperatures are driving some of these shifts. Now we know that temperatures are going to be high. We know the rough band during which they were going to be high. We also know that demand will peak because of cooling needs that will increase at that point. But we are still scrambling so why is that? So uh if you talk about average capacity and average demand, right? I mean we’ve always had more capacity on an average than demand. And that’s how our power system should operate, right? The what has changed is basically the load profile of the demand, which is you have different very sharp peaks which are happening. And this peak with more urbanization starts shifting towards the evening part, right? 10 20 years back when I would work with clients, we would find the peak used to be obviously in the daytime. And if I was working with a generator, we would scramble to figure out what do you do in the night, right? And because I cannot ramp down my plant. A coal plant doesn’t ramp down as fast. And the prices would collapse. Now we have an exact opposite situation. And from the supply side what we have done is majority of the capacity addition we have done is a day capacity, right? So just to give rough numbers, last year let’s say we added 50 gigawatt of solar, 50 gigawatt of solar which generates roughly in 6 hours of the day. So 6 hours into 50 gigawatt, that gives you about 300 gigawatt hour of generation, right? Uh if you see that demand increase in this 6-hour slot would be about 50 60 gigawatt hour. So you’ve created a surplus energy of 240 odd gigawatt hour and this you’re doing every year. Whereas in other slots you’ve have created the capacity and the ink uh the increase has gone. What does it mean is that I have to time shift this generation of 240 gigawatt hour surplus into the slots later than 4:00 6:00 p.m. slots, right? Now, which basically means 240 gigawatt hour of some form of storage you will add. Which is a mammoth amount as there. If you see CEA projections etc. we are talking of adding 240 gigawatt hour by 2030 2032 kind of time frame. Whereas this is the surplus which is what I’m created just in one single year, right? So, the system is not it’s not just about average amount of electrons I can generate, but it’s at what time I can generate with what flexibility I can generate and dispatch them, right? So, solar wind these resources are not flexible resources. I cannot schedule them. They will be scheduled based on the on the weather. So, they enjoy what is called in India is must run status. Whatever gets generated will get scheduled. Right? Uh so, you can’t curtail them as per their contracts etc. The most dispatchable resource we have, which means I can generate when I want, is thermal, which is in India mostly coal. But coal is takes time to dispatch. You need to know in advance that this is the time at which I need to ramp up or this is the time at which you need to ramp down. So, it’s not so much of a capacity challenge, it’s a mismatch of when the demand is versus when the capacity is is available, right? So, the I would say I don’t Earlier we used to have a basic electron problem that is there are there enough electrons in the in the system. Now, it’s a question of can I time match when it is getting generated to when actually it is getting consumed. Right. And to come back to your uh distribution company where you were, now you said that they were scrambling, uh was it only on some particular days or is it through the day or is it overtime? So, it is the scramble is largely to solve for the evening slots, right? Uh slots, there is enough capacity available and enough The prices are also fairly reasonable and and low because you have surplus in the market. So, even if you don’t have contracts tied up, you can always buy from the spot market in that. So, the scramble is always in that evening slot when the solar’s generation starts to go down, right? And the load starts to go up. So, in that moment, which is the evening, you know, 5 6 8 kind of period, that’s the scramble because everybody’s trying to buy from the spot market at that time. Nobody wants to do a long-term contract for 2-hour slots. So, everybody wants to basically buy from the spot market and we are willing to pay slightly higher prices. But when you have a temperature spike, when you have, let’s say, for whatever reason, some decline in generation, some constraint might have gotten created because of, you know, capacity on transmission at that point in time. Then you have to scramble to find power for that, right? And as I said, earlier days, it would have been simple to say, “Yeah, take these four transformers and shed load, right?” And you will not do in in in these times. So, that’s the scramble about is to And that scramble doesn’t happen in real time. That scramble happens a day ahead. You know, next tomorrow you’re going to peak at this particular point in time because you are closer to the day, your your forecasting ability is much higher. But in advance, your forecasting ability is not that uh Right. And and uh if you can take us into that distribution center, so there is obviously a desk or a uh uh a set of people who are doing this buying and selling because they’re trying to adjust to what clearly they’ve not prepared for. So, how empowered are they? How are they taking these decisions? What is the margin with which they operate? Yeah. See, I mean, it differs depending on what utility you are. If you’re a private utility, right? Then, honestly, you are there typically in an urban area where fulfilling demand is is important. So, that empowerment is there that you out and buy. Different companies will have their different internal processes to say that, you know, the price is above so and so level, then some approvals, etc. you have to take internally. But, everybody structures it in that way. But, that’s fairly agile, you know, you don’t have to It’s not a big loop, right? If it’s a government utility, then of course there is the question of because this payment has to be made on that day. See, when you do a long-term contract, then my bill gets invoice gets raised at the end of the month. So, I’m paying cash at the end of the month, right? And so, I am get credit in a way from the generator which is there. On the spot market, there is no credit. So, it all That time the decision-making depends on how much cash do I have? Uh how much do I think I will be able to possibly justify to the to the regulator? So, there the decision-making will tend to be slower, and hence people will probably either leave it to the last minute uh to solve for this, or quite possible you might see some shedding of of load or or transfer of load, which will happen. So, um as I said, it’s not only the price, it’s not only the forecast, it’s also these conditions saying is the cash available for me to do. And you’re paying to the exchange? No, paying to the exchange. And uh there’s one more quick sort of we have to extend that question. So, when you do make that payment, let’s say you made that payment at 5:00 p.m., and it’s an instant sort of transfer, so how does the power get shifted around? And how how long does that take? So, one is what the forecast what schedule you give to the scheduler, right? Which I think now the cutoffs have been brought closer to the actual slot, which is not exactly 24 hours, but you do pretty much give for the next 24 hours. So, if you have to give it at let’s say 10:00 or 11:00 in the night for the coming day, so you get that much amount of of time. Um the exchange buying process works in a different way. The price discovery happens at a point in time. You place your buy and and sell bids. They will get matched. Then there’ll be a congestion check done saying can this contracted power be moved around based on this thing which gets checked with the central transmission utility and that’s a fairly I would say online kind of process which is there based on which they will clear volumes. Based on that clear of the volumes it will get scheduled. So that’s a very very I don’t think there is any friction in that. We’ve almost moved our cutoffs to now 1 and 1/2 hours before the the slot. And then after the spot market we’ve created one more market called RTM which is the real time market. Let’s say day ahead you are not able to do it for whatever reason and there is still a minor discrepancy up and down. So there is a market which is 1 and 1/2 hours ahead. So I can go into that market and buy in power and it’ll get scheduled for for that particular slot as well. Right. And you know when I talk to folks who are let’s say dealing in in the electricity exchange they tell me that there are times when power is almost free during the day. And obviously things change towards the evening. So we are obviously seeing huge over not over capacity but sufficient capacity during the day and at least in the spot market prices are not. So my question is that finally the consumer is paying a fixed price and I’ll come back to the consumer because you talked about what you can do nowadays and you can’t. So the consumer is always paying a fixed price. So how are these two sides adjusting then? Or if does it get automatically adjusted because you’re buying sometimes at such low prices but you’re also paying high prices it all evens out. In India electricity follows a regulated tariff mechanism. Right? So ultimately the distributor of power which is in called discom in India. There are 50 plus of them. What they do they are a cost plus entity. So all their costs theoretically all the costs as long as they are within the defined norms which are there with an added 15 and 1/2 or 16 and a half percent return on equity gets added to that gets divided by the total number of units and that’s the tariff, right? So, the customer’s tariff is an average tariff which is there which is a post factor tariff. So, what you’re paying today might actually be a reflection of what happened in the past but not what’s happening today, right? In some areas you do have something called as time of day tariff which is where the utility to match the what they are paying slot wise versus what the customer is using to match that, they have different slabs of prices. So, in the afternoon, so in Bombay for example, they’ve already started doing the roll out of time of day meters. I mean, it’s already reached let’s say started from North Bombay and they’ve reached up to Andheri for example. Notice has been given that we will be changing the meters etc. to time of day. So, they will give a discount on the afternoon slot and they will increase the prices in the evening slot, right? The average will remain more or less the same because that’s your average cost. This is required to nudge consumer behavior to say align your load more to what the generation is, right? Easier said than done because many of our loads are inflexible, especially on residential. The loads are fairly inflexible. I don’t mean what will you change, what will you move to afternoon? Like, you know, I have to I need to switch on my AC when I get back home and to sleep in the night. I’m not going to switch it off in the in the afternoon, right? So, it’s a difficult change to make but it’s the right direction. The flexibility is higher let’s say for an industrial customer. So, if I’m operating a small factory, I have a warehouse or I am a you know, in industry where I can change my shift timings to align more with when the prices are lower or or higher. So, it it works for industrial customers that way. For agriculture customers, it works even better because most states are providing free or subsidized power to agriculture customers and they typically would use to historically provide it in the night. The night power was cheap because there was more surplus available in the night. Now they have started to shift this to afternoon. So if you see Gujarat, Maharashtra, these states have started shifting the agricultural demand to the daytime. And these are big loads, right? So when you shift these loads, then you start to matching the load to the generation part. Right? And also because it is cheap. So if you’re subsidizing it, might as well subsidize with the cheapest source of of generation. Right? So that’s the logic of how the time matching of tariff to this thing happen. In an ideal world, every 15 minute carries a price. So every 15 minute ideally the price should change. Right? But for a end consumer it’s very difficult to have 96 price points in a day. So do you deal with in terms of that? In western geographies for example, people buy energy contracts in the retail. So somebody will give them a fixed average price. Somebody will give them different price for different slots. So you create products out of that. In India we have not yet unbundled the last mile distribution with the last mile supply of of energy. They are the same entities. But um is that I mean is that held back because of regulatory reasons or Uh so regulation allows for it. Um so if you see the electricity act 2003 and the amendments after that, it allows for a separation of what is classically called content and carriage. So carriage is the wires and you know content is the actual power which is there. Uh in reality, the discoms obviously make you know losses on the wires and they make profits on the supply. On an average they still make losses. Most of the discoms make losses. But if they give up the supply part, right? Then what will eventually happen is the cost of of wires will go up. Right? So that’s the reason the discoms have not let go off this part. There is a via media which is created. Large customers have started shifting. So, anybody with a big load of 1 MW etc., they start buying their energy directly with a generator rather than buying from the discom. So, they pay for the discoms only the charges for carrying the power. They don’t pay the charges for the power itself, which is called this, you know, colloquially now called the C&I market, which is commercial and industrial guys go directly to a renewable generator or somebody and do a PPA agreement with with them. Right. And if I if I were to take a step back and, you know, look at what’s been the again, I mean, I’m starting from the same 270 GW peak. So, we’ve talked about distribution and some of the challenges and I’ll come back to distribution in some time. But, tell me about what’s been happening on the generation side. I mean, I know that we are all we have solar days and solar non-solar days and so on. We are obviously producing a lot of electricity, but not all of it is effectively getting distributed or transmitted, rather. So, should we then produce should we create more capacity or should we direct our energies elsewhere? So, if you As a country. Yeah, if you see any good power system design will have different capacity sources because no one capacity source is perfect to solve. And what are what are the objectives you’re trying to solve for? You’re trying to solve for affordability, like low cost of the electron, right? Which today solar is the lowest cost of electron. Then you are trying to solve for reliability or predictability that when I want it, will I get it? Can I forecast accurately that this is the time I will get it? Third is called dispatchability, which means when I want it, can I send it, right? So, that’s the third part. And fourth in the recent years, which has gotten added, is basically the climate impact of the green part of the electron, right? So, you are trying to solve at once for all these objectives, right? And the hierarchy of objectives changes depending on what stage of the economy you are in, right? For many years we were trying to first get power to everyone. It didn’t matter what color of the power it was. Now, we have ambitious targets on the color of the the power as well. Color of the power has added the challenge on flexibility and dispatchability. So, you need now new sources. Now, India has some sources and some sources which are missing. So, we have solar, we have wind, visibly amount of solar good amount of wind. Uh we have thermal, which is through coal. Coal is reliable. You know exactly if I want this much megawatt at this slot, I can say it. I can dispatch it, but it’s a slow ramp-up start and all of that. And it is expensive now, right? Uh we had very little nuclear, which is a good base load clean power. So, you have the color of the power is great. Reliability is great, dispatchability is great, cost is higher, right? We have hydro, very limited as compared to the size of the system that we need. And one important joker in the pack, which is missing in India, which is gas. So, gas globally is predictable, reliable, relatively clean. I’m not saying it’s, you know, like renewable, relatively clean and highly dispatchable. Whenever I want it, I can generate. It’s a faster response time as compared to this thing, right? So, we don’t have gas. I mean, we don’t have any domestic gas, imported gas is expensive, so we’ve not created a great amount of capacity on the gas side of things, right? And even for what you created, our plants are often shut down. This is even before the West Asian crisis, right? So, the way majority of Indian gas-based power plants operate on what is known as the domestic allocated gas, which is APM, right? Which is a subsidized price. At that price, basically the power generation costs are still reasonable, right? Now, in the hierarchy of allocation of APM gas, power is not the most important use case, right? I mean, some years back we changed the allocation of gas. The first port of call was city gas distribution. So, that gas was going towards CNG, which is transportation. It was going towards home connection, which is PMG piped gas. So, these two applications were prioritized over other applications. Power is not even the second application. After that, you got fertilizers, which is basically a gas guzzling industry because you make ammonia out of it. So, that’s the second application which is there. And that has direct linkage to inflation, agriculture, etc., right? So, when you say that power plants don’t operate, it’s because either you are don’t have enough gas to allocate to those. And if it is not subsidized gas, on market prices, those gas that gas plant cannot exist. Our gas plants will go up and down for that particular reason. There are some gas plants who, based on their outlook on what they will get from the market if the prices are very high, like this summer, for example, if the anticipation of price was very high, they would have imported some LNG, which is expensive, but it is still giving them a spread between the fuel cost and the and the power cost, then they would have brought in that LNG in and used it. But, you can’t take that decision overnight, right? I mean, if I have to plan for an LNG cargo, it has to be done at least 45 days in advance. If I’m planning from the US, which a lot of people are now saying with the West Asian crisis, I will go to the US, then it is like 1 and 1/2 2 months in advance I have to to plan. So, gas can get it. You can get it. For some price, it’s available. Yeah, yeah. Gas is very uh I would say from a as a molecule as a commodity, it is very liquid, right? So, availability is not a challenge. No, like for example, despite all the Qatari gas fields going out of commission and so on. So, we like to change the source. Yeah, so there’s enough somewhere in around the earth. Somewhere around the world it is there. Okay. A lot of it was getting transported to that corridor. Right? Now, if it is not being bought in that corridor and it is being bought somewhere else, then you get transported over a longer distance, your costs will obviously go up because of of that reason. Uh but availability will not be the the challenge. But I don’t see that as the answer. You know, theoretically as a power systems engineer, I would say that we should have had a lot of of gas. But it’s difficult to build any reasonable amount of gas-based power plants. So, which leaves us with? So, there are three sources where we need to solve this problem. I think first is which is the obvious one is storage. I think we are all underestimating the amount of storage that will be required. Right? Uh and I’m not going by what technology of storage. I mean, there are many technologies. There is pumped hydro, there is battery. Again, in that any same planner would say you need a mix of all technologies. You will not bank on just one of them. Right? Because everybody has some advantage or disadvantage. That’s the obvious answer. The second one is you look at what is the more evening aligned generation that you have. So, you have wind for example where we are doing less than what we should ideally be doing. So, we have planned for 10 gigawatts of wind a year. We don’t do as much wind. We we are not able to construct as much wind. In my view, if you ask me, we should do be aiming for much higher wind than that. And because? Because it is more aligned to the load profile. So, wind actually, if you see even on that day of 270 megawatt gigawatt when it happened the evening slots when it peaked, a lot of the load was actually taken by wind generation. Right? Because wind peaks in the wind gets you in the evening. Uh it’s also again relatively less predictable. But it is more aligned to the slots that is there, right? Third is That’s a good thing. That’s a good thing. But the amount of wind we have is much lower than what capacity they can there is scope for more capacity. Yeah, yeah. So, I mean because solar is very easy to construct, is more reliable to construct, right? For any developer who’s putting in money, right? I’ll give you an MNRE MNRE tracks the projects for both solar and wind. Uh on an average of all the commissioned projects, solar has gotten commissioned with a 3-month delay. On an average, wind has gotten commissioned with a 9-month delay. Right? And wind is more expensive at a capital cost level. Yeah. So, you have delayed your capital being productive by 9 months, so it adds to the to the cost. So, any investor would say, “Why are we trying to do?” Cuz it’s like, you know, I say everybody wants wind in the system. But I will not do it. Let somebody else do it. It’s like that old thing, you know, I want a Bhagat Singh but not in my house, but in my neighbor’s house, right? So, wind is that story, but it’s a very market-aligned, load-aligned source for India. Um and then there is um uh we would have to do our hydro and our thermal anyways. This thermal will be very expensive because the average utilization factor of those thermal plants will be lower. But they are the ones who will kind of come in in the evening night slots to relieve the load on the entire system. And you’re saying they’ll be lower because Because the daytime they cannot compete with the solar with solar. Okay. So, uh if if I were to look at the evening challenge as you call it. Now, let’s look ahead now. We’re saying maybe demand will go up by 6-7% or maybe even more. So, from 270 GW peak in 2026 and we are still into June. Uh we may hit let’s say 290 gigawatts in 2027, for which we should be mentally if not physically prepared. So, where are we in that journey? Um See, I just if you do the simple math here, let’s say another 20 odd gets added to the peak for next year. Um I and let’s say that peak lasts for about 2 hours, okay? Uh I need 20 gigawatt into two, which is 40 gigawatt hour of storage capacity which needs to come in. Which I think we will add this year. So, next year’s peak will get taken care of because we’ll have this time shifted capacity which is there. I would say when you say storage, you said you’re you’re saying we’ll add storage to that Yeah, because the tenders have been issued. A lot of tenders on storage have been issued. If they all get constructed, then for next year we will but the challenge doesn’t end there because every year this number will keep adding. So, every year you will have to keep adding that capacity. The um that’s difference is whether all of these storage projects which have been tendered out will they actually come or not? Right? Uh they have been in my view very aggressively bid out. So, when the auctions have happened, people have bid very aggressive prices for these batteries. And if the battery prices, so everybody believes that if I contract a battery contract today, let’s say 3 months, 6 months down the line I have to buy the battery from China, the prices are only going down. If this she sees a U-turn, then the project becomes unviable because I have bid on the basis of Prices going down. Prices going down, which honestly doesn’t happen sustained basis have anywhere. People made this mistake in solar. Where when the prices were close to 15 16 cents on the module around 2021 period, they bid aggressively, the prices hit 2 rupees, 199, and then from there the solar price took a U-turn. It went all the way up to 34 on that, right? So, many of those projects became unviable, so people have not constructed that. So, I’m you know, fingers crossed that at least people will deliver on their commitments of constructing this battery capacity. So, next year peak may get taken care of because of that reason, right? Uh but this is has to be done now every year. Right? And it’s honestly, if this simple compounding logic, next year’s problem might be a 40 gigawatt hour problem. The year after that, it might become a 60 gigawatt hour problem. So, it’s only going to increase every year, right? So, every year to add so much storage is like a national campaign now to do that. I would say it has to get alleviated in different ways. So, you add the wind capacity, some thermal capacity is anyways coming online. Um and that’s the combination should make the the peak work. Also, all of these measures which are shifting the load to afternoon, etc. There is only that much room which you can do, but whatever extent you can shift the loads, you will start shifting it to the afternoon. So, we’ll be able to manage the Right. So, uh two or three things now on the demand side. Uh you did say that uh you know, you can’t shed uh do load shedding anymore, something that we were all a term that we had all sort of all grown up with in this country. And that’s because consumers have now got used to getting consistent power. Like here in Mumbai where we sit, we have have been spoiled Yes. by uh consistent power for decades. But now, that’s not been the case in other parts, but they’re also now getting used to consistent power. Uh what else can we do to moderate demand? And I’m guessing there could be two or three things. One is, of course, there is a lot of, let’s say, rooftop solar happening and those kind of things. I don’t know how that’s looking when you look at the macro numbers and it’ll be good to know. And second is could people be educated to moderate their demand in the way you pointed out that can you shift your needs and or there could be other energy mixes. Let’s say you use induction cooking during the day and something else during the night and use some other fuel. I don’t know. So, how is all of that looking? So, I don’t think we have made a serious attempt at what is called uh classically DSM which is demand side management because we run it like campaigns rather than on incentives, right? So, when you’re trying to change behavior, then you have to can’t run only on a campaign basis. When I was growing up, there was a similar crisis in Mumbai and you used to see hoardings across the city with keep your AC at 24. Right? So, 24 was drilled in everybody’s minds and now more or less people think that 24 is the right temperature, right? But before that, that was not the case. So, campaigns help, but you know, at the end of the day campaigns don’t sustain forever because you know, generations change all of that. Um I think rooftop is a great source of generation, but it doesn’t solve my afternoon problem because it again will generate in the afternoon only, right? So, it’s not solving for my loads there. Um I think this TOD pricing which is there, which is the difference that customers are seeing uh is too low to make any material change on the demand side, right? You need to create a really market reflecting number. If this difference was let’s say 60 70%, what will you start seeing? You will start seeing people deploying batteries at home, right? So, for example, I need to use my AC in the night, but the afternoon prices are super attractive. Let me put a small inverter inverter battery so that I can shift that, right? So, but it will depend on what is the pricing arbitrage that I create because the battery costs money to deploy, right? So consumer behavior will only change with incentives and pricing. Large loads have already started as I said agriculture is a policy driven decision. You will start shifting that. And industry will start shifting again based on incentives. So if you decide that evening power is going to be expensive then you will start seeing shifts. You know production ramping up in the afternoon time and and all of that, right? But at the end of the day all of this comes down to price signal that you give to the end consumer. And it has to be strong enough for them to react and and and do that, right? I mean this is um I would say necessary but not sufficient. The sufficiency India has an inverted pricing system, right? For electricity consumption which I’m not sure any other country in the world has. Uh or maybe they do. Yeah, I mean majority of the countries would actually subsidize industry. So that is one. Secondly, you pay more as you consume more. Yes. So so therefore you I mean how do you further disincentivize? I mean in any case I’m telling you the consumer that the more you consume the more you’re paying so consume less. But that’s not working or has not worked. But see I it’s not about my total number of units consumed anyways, right? So it’s all a question of how much in what slot do I give the signal for. It’s becoming inelastic to that extent. So if I say for example in the night you know my tariffs are going to be much higher then today I keep my temperature at 23, you know I might keep it at 24. Right? Because that makes a big difference. It will give a signal to the consumer durable market also to say that the delta is so much that you’re all everybody should only buy a five-star AC and not a not a three-star AC, right? Today the arbitrage is not enough to justify spending extra for that thing, right? So if you give the price signal all these innovations starts happening, right? I mean, we have done a great job on air conditioning I would say as a domestic industry. But from an energy efficiency point of view, it leaves a lot to be desired. Everything will change, right? I mean, if you see design of houses, interior, architecture, people start thinking of energy first because it makes a big difference, right? Today it does not make a difference, so you don’t That’s not your first this thing. You give a price signal which is large enough and you start seeing change in consumer behavior both for average reduction of consumption at the same time market aligned reduction of consumption. I’m not a big fan of reducing the consumption itself. See, one of the I mean, people think that with increasing affluence people consume more energy. It’s also the other way around. With more energy consumption creates more growth and more affluence in the economy, right? So, it’s not always good to say that just consume less. It’s like a good energy practice, right? Yeah, I mean, and honestly, every utility in the country runs energy conservation programs, right? Which is counter intuitive to business logic saying, you know, that you are a utility, you should be looking to sell more electrons. But actually, honestly, they all run this thing because we have come from an era of scarcity. So, there is not enough power. There used to be this famous Pune model if you have heard of it that in Pune they had divided the entire Pune region into they would have a holiday on a different day for each part of Yeah. So, the industrial city, yeah, yeah. Also solve for power. Mhm. Right? And I used to have clients who had holiday on Thursday. I should used to be very weird used to like, okay, Thursday is not not working because you are trying to smoothen the But today that’s not there, I’m assuming. Today also there because you know, today even there is enough which is available. Mhm. Okay, so let me as a last question, let me come back to your visit to the distribution utility. So, I’m assuming some of your conversations was about what was going on right now. How were they preparing ahead? And is there a sort of role of technology or AI in better prediction or have we reached the peak of prediction and the last question sort of supplement to that is I know a lot of this is technology and AI but as does intuition have any role to play in all of this? So I think there are many areas for technology and especially especially what advancement we’ve seen in AI other than the prediction itself. See we spoke a lot about the generation part right? There is a core infrastructure which delivers the electron to the last mile right? We have reached a point where in any commodity good trade happens when the cost of transport is lower than the cost of the commodity right? So you take oil you take gas the reason why we have such a vibrant trade in oil and gas is this whole LNG as an innovation for example which is the transport of gas. It became cheaper and hence gas started getting transported otherwise used to be a domestic source always right? Similarly in crude the prices are good enough that actually tankers float and get traded 100 times before they reach the destination right? Now in electricity you have reached a point where cost of transport is actually higher than the cost of generation generation right? And hence this complexity and this trade can only be managed if you start driving down the cost of transport. The simpler way to do that is to drive up the utilization of the pipe right? Which is you know can’t use only for 20% of the day 25% There is a huge role for technology in in managing this part. Second is for a utility prediction definitely because the all the systems require prediction. We have created a problem of prediction now on the generation side also which was not there 20 years back because I didn’t need to forecast how much my plant will generate tomorrow. I know how much it will generate but now I have to forecast how much it will solar will be there how much wind will be there because it is weather. I have to forecast demand also. So, there there is definitely a role for AI. I don’t think we’ve reached the peak or anywhere. We’ll get more and more accurate with more data, uh which is there. More importantly, I think the demand side will see a big push because of technology and AI. Uh I mean, everybody talks about data centers, etc. It’s a non-trivial amount of load which which will come. A non-trivial amount of concentrated load which uh which comes there. So, today if you take an let’s say a steel plant which requires 250 MW of power. I’m just taking an average plant. The way they used to manage is that they would have a captive power plant inside. Yeah. A data center doesn’t have a captive power plant. Across the world, they have gas-based power plants. In India, if you have a data center, you will not have a gas-based power plant. So, you’re powering through the grid. You have to deliver 200 to 50 MW of power who’s there. Uh which is every month we revise our forecast upwards on how much will be the demand. It will become a large chunk of of that, right? That’s a big role of technology. I think everybody talks about digital AI. More is just the hardware technology has a lot of room to grow. Electrical equipment industry has stayed at some level for a long period of time. Yeah, and I’m assuming there’s so much of uh uh revitalizing of existing transmission and reinvesting and I mean, there is a See, the biggest problem in setting up a any linear infrastructure, whether it is a road, whether it is a transmission line, distribution line, is the right of way and the land that you have to Now, once you’ve set it up, then it is the the cheapest way to upgrade it is not to ask for more ROW or more land. It’s to basically increase the capacity of of your existing towers which is there, right? And there are many methods for that, right? You can do that. You can, you know, increase the number of circuits. You can increase the rating of the line. All of those technologies are there. Uh as and when our overall system size increases and we can afford these. You will start seeing this technology. I’ll give you a bit of one of my favorite this thing is there is a metric called a SAIDI for uh distribution companies. It’s basically a measure of reliability of the network. What it means is that on an average in a year a customer experiences what duration of interruption. Right? So everybody in Bombay for example, on an average will experience certain minutes of interruption through the year. It might be a transient interruption, but it’s an interruption. If you aggregate all of this right? Uh it will run into you know, a few tens of minutes or a few hundreds of minutes for urban utility like Bombay for example. Tokyo is at 2 minutes. 2 minutes of average interruption per customer for a year. Right? They don’t even notice it. Right? You only way you can get to 2 minutes is just the amount of infrastructure you’ve created in the grid and the amount of technology that that you have put in, right? We are very far from from 2 minutes. We are very far from I would say even 15 20 minutes. But that’s a it’s a good target to keep in mind. I mean, even for a consumer to know. Yeah, I mean like I would say many of our urban utilities will still be at 200 300 kind of minutes kind of number. And I will won’t even talk about the ones which is more rural and all. They don’t have the infrastructure to be able to have much more reliability. I mean, every time obviously headline grabbing is if power is cut, then you would assume that it is because supply was not there. It’s not the case in seven out of 10 times. It is because, you know, temperatures went up, you had to you know, cut off the you had to activate the relay so that equipment won’t overheat or your equipment capacity was not enough at that particular point in time to deliver it to to your house. So, it’s a roads, it might be a road or a bylane problem and not a original way highway uh problem. Mhm. Right. So, let me last question. So, uh who’s your next uh who are you calling next? So, I mean or calling at next? You said distribution was your last this thing. So, which other point in the chain are you sort of focused on from your vantage point as a consultant? For me, the next most important piece to solve is the what is called as the middle layer which is transmission. Mhm. Um Which we spoke about, yeah. Yeah. I think uh I’ll just other than just creating capacity Mhm. uh and which we created a lot of, right? Transmission capacity. You need more intelligent transmission capacity. Uh you So, you know, we talked about storage as a generation source. You have also storage as a transmission source, right? So, that’s the thing. And the execution of transmission coming closer to what the reality now is. So, olden days, we had a 4:2:1 rule, which is 4 years for generation, 2 years for transmission, 1 year for distribution. That’s how the network planning logic worked. Now, generation, because it is largely renewables, has crashed from 4 years to 2 years. Distribution remains at 1 year or even more than that. Now, transmission is stuck because, you know, 2 years is also tight for them. So, generation is getting added much faster than yes thing. So, in my view, for us to not waste transmission capacity is important and to create transmission capacity at speed is important. And the third is to create intelligent transmission capacity is even more uh important. So, that would be my next uh port of call or yes. That’s a good note to end on, Vishal. Thank you so much for joining me. My pleasure.