From Star Rating to Efficient Fans: Why Energy Efficiency Matters
Guest: Saurabh Kumar, India Head of Global Energy Alliance for People and Planet (GEAPP)
Host: Sandeep Pai
Producer: Tejas Dayananda Sagar
[Podcast intro]
Welcome to Season 3 of The India Energy Hour podcast! The India Energy Hour podcast explores the most pressing hurdles and promising opportunities of India's energy transition through an in-depth discussion on policies, financial markets, social movements and science. The podcast is hosted by energy transition researcher and author Dr. Sandeep Pai and senior energy and climate journalist Shreya Jai. The show is produced by multimedia journalist Tejas Dayananda Sagar and is presented by 101Reporters, a pan-India network of grassroots reporters that produces original stories from Rural India.
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[Guest intro]
Energy efficiency in India has become an important focus due to the country's growing energy demands, environmental concerns, and the need to reduce energy costs. Several initiatives and policies have been put in place to enhance energy efficiency across various sectors in India.
In this episode, we interviewed Saurabh Kumar, India Head of Global Energy Alliance for People and Planet (GEAPP), who had a remarkable career in the energy efficiency space. He has previously worked with Energy Efficiency Services Limited as Executive Vice Chairperson and was appointed as Secretary of the Bureau of Energy Efficiency (BEE). He delves into the role of energy efficiency in India's energy transition and the future of sustainable solutions.
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[Podcast interview]
Sandeep Pai: Hello, sir. Thank you so much for joining the podcast. it's truly a pleasure to have you, as one of our guests and come and share your rich experience, working in the energy efficiency space, and now working with GEAPP, but before we get into the core of the topic, I want to understand, and this is our tradition in this podcast, that we spend almost the first 10 to 15 minutes on the person, himself. So tell us where you were born, how did you get into this space, what did you study, and your basically professional and personal journey. And if I have any follow ups, I will ask.
Saurabh Kumar: Thank you for inviting me. It's really a pleasure, being here on this platform talking to you. So, I was born in Allahabad, now called Prayagraj, nearly, 55 years ago. And, I did all my schooling from Allahabad, till about 1985. I completed my class twelve from Allahabad. And then I joined the, Indian Institute of Technology, Kanpur for a four-year course in electrical engineering. That was 1985-89. After I finished, I joined a public sector entity called Indian Telephone Industries, which was actually there in Allahabad. And I also started to prepare for these civil services examination. And in 1992, I joined the Indian Revenue Service, income tax, I worked in first two years are basically, you are trained in the National Academy of Direct Taxes. Was posted in Delhi in 1994. Served in Delhi under various, field formations for about eight years till 2002. And then in 2002, I joined the Power Ministry, as a deputy secretary, looking after finance and budget, and practically never went back to the income tax, was there in the Power Ministry for about five years. And then I joined an entity called the Bureau of Energy Efficiency for about 3 - 3 ½ years from then on. Went on to UN assignment in Bangkok. And in 2013, perhaps the biggest step, in the career was to resign from the Indian Revenue Service and join a virtually unknown startup called EESL (Energy Efficiency Services Limited). So that was an exciting time. my wife is also in the service. She is my batchmate in the Indian Revenue Service. She's currently posted in Delhi. And we are two daughters. one is working in Pune and the other one is in Boston. So that's the kind of a journey that, I have been through.
Sandeep Pai: I have to ask you this question because you have pointed it out. How is it that a finance guy could stop himself, got into energy space, and just like that's the career, I mean, obviously, energy and climate is very interdisciplinary, finance being a very crucial aspect of it. So I'm sure you're still applying your finance brain in the energy space, but how is it that you didn't move back, or switch back, even though I think you could have moved back in different parts of your career.
Saurabh Kumar: Yeah, I mean, many things happen, without design at times. And, the journey till the UN happened, one after the other. I didn't have to do anything, it just happened. And I accepted. Let me be honest, I was quite happy in the tax department. Not that I had any problems in the tax department, a very exciting department, it was still is, but I started to like the energy space once I started getting into it, first in the formative years in the Power Ministry. And those were indeed very, very intense years. If you would recollect between 2002 and 2007, the Electricity Act came into being, the National Electricity Policy came up, the Rural Electrification Plan came up, the distribution reforms came up. So there was so much of activity, and being in the ministry, one got a chance to learn. And then the most fascinating part of my life was those 3 ½ years in the Bureau of Energy Efficiency, that really brought me to the fore, that, look, there's so much that you can do in the energy space, and then one thing led to the other, and here I am.
Sandeep Pai: But I'm still fascinated. So, I'm going to prompt you to, shed more light on this, because at that time, although, as you said, there were some exciting and challenging things happening, electricity act and stuff, but now it's almost like, if I can use the word sexy, to work in climate and energy space. It's a sought out thing.
People who graduate, whether you go to IITs, whether you go to IMS, or even if you do social sciences, energy and climate is this growing field. Everybody wants to solve the climate crisis, or is dawned by it, but nonetheless but in 2004, it was still not that kind of it was still a technical topic. we have to just provide electricity to the people. Energy excess is a big topic, etc… So but you found that challenging. but you found that still interesting at that time itself, right?
Saurabh Kumar: So the fascinating part, as I mentioned to you, was those three and a half years in the Bureau of Energy Efficiency, literally, what you see today, the Bureau doing, whether it is the labeling program or the building codes, or virtually any other program, was all designed by me sitting in that space. Of course, I had Dr. Ajay Mathur as the DG who was an expert in this field. But that was the fascinating time of 3 ½ years. You are right, not many people wanted to work. Energy efficiency, in any case, was never a sexy thing. even today it is not. But even climate, et cetera, was not talked about. But forget about. All was when we started developing de and started getting early success. We realized how much impact you can do while you are, inside the government as compared to any other place, even, for that matter, GEAPP (Global Energy Alliance for People and Planet). I mean, what the kind of impact and change that you can bring in is tremendous. And that's what the Bureau of Energy Efficiency has shown over the years. If you see any of its programs, in fact, all of them literally were created in that 3 ½ years period. So that started to kind of excite me.
The other reason, and let me be very candid with you, and, I'll give you a small story about it. I joined the Palm Ministry in 2002, sometimes in July, and some three, four months later, I get an invitation card that, there is a National Energy Conservation Day which is being celebrated, and the prime minister is the chief guest. And of course, being a ministry person, you are supposed to be there, that happens to be has been celebrated for the last 30 years, on 14 December. And that happens to be my birthday as well. So it's a very unique thing. In fact, after two years, people who started to attend and started to know that it's his birthday, they were convinced that I have kept this day because it is my. So I don't know, it's either faith or whatever it is, but I really started liking and loving this, sector. Then, before I left for the UN, we had also set up this, company, EESL, which we thought was absolutely necessary, as far as, the market side of energy efficiency is concerned.
And therefore, once I decided that UN is not the place that I would like to spend more time on, the excitement of an unknown and a challenge of creating something absolutely new where none exists was just too much of, excitement. at least a person like me cannot leave it. Yes, of course, there are dangers that it will not take off, but then, that's fine. In hindsight, as I look back, I have no regrets at all. I'm actually extremely lucky that I made the choices that I made.
Sandeep Pai: That's great. I will ask one last question on this personal front, and then we can get into the topic. But a lot of people really love the other side of experts who are our guests. So it's nice for me to probe on this front as well, I think I know the answer, but I would like to hear from you. were there any people who inspired you, mentored you, worked with you, or before, that really also shaped your thinking, and helped you move in this direction. And if there is any anecdote that you would like to share with that person, that'll be amazing.
Saurabh Kumar: Okay. Two people I have no hesitation in saying, I mean, there are two people who taught me what is a good, way of, working, healthy way of working. And I'll give anecdote of the first one. First one, was my joint secretary in Power Ministry, a person called Mr. Ritunjay Sahoo. Absolutely a financial wizard, I would say so. Learned so many things from him, despite the fact that I was, a taxman and had some training on finance, he was an absolute brilliant. And the second, from the technical side, I would say Dr. Ajay Mathur, who's right now the DG of Isa. So I walked into the Bureau of Energy Efficiency with practically, a bit of a background on policy and a bit of background on finance. I had no clue of energy efficiency. So these two people really helped me.
Other thing that the anecdote that I wanted to share, is something that has remained with me forever, is that don't lose your intellectual honesty, and I'll tell you a real story, okay, so I'll reverse it. There was one meeting somewhere in Guwahati where I had accompanied the secretary power. And in the evening, there was a dinner, and my, secretary took me aside and asked me, are you and your boss fighting? I said no. What happened? So the story is, there was some issue that was being discussed. I, mean, had come to us for our advice. So I went up to my boss, Mr. Sao, and I said, look, do you want to discuss this, or how do you want to take this forward? So he said, look, you are an individual. I am an individual. You decide to write what you want on file. I will see what it is, and I'll give my views. So I wrote whatever I had to, almost, in those days, you had to write on green sheets. You still do. so about two pages of green sheets.
So what had happened is, when the file went to secretary, my boss deferred with me my views and gave his own one page view, and it went to the secretary. He said, I have never seen anything like this. But he also said that, look, it gives me a perspective of various options that exist while taking a decision. But he just said, I wanted to know whether are you guys on talking terms or you're fighting with each other. So this is an, example that has stayed with me, that no matter what happens, your intellectual honesty should stay with you. It does not matter what someone is telling you to do or not do. If you don't feel that this is right intellectually, you should not put your name behind it. And I think that has served me a lot, over time.
Sandeep Pai: This is a really great example of even generally in this space, right, there's always two, three pathways to reach the same goal. So this example kind of reflects whether you're doing modeling, whether you're working in policy, whether, there's always a few pathways. So it's nice to have all the pathways.
Thank you for sharing all the nice, lighter, anecdotes. But I'm also very excited to ask you more substantive kind of questions about the, energy efficiency, world. So let's start with a big picture question. What is the role of energy efficiency in India's energy transition and India's desire to achieve a net zero by 2070?
Saurabh Kumar: So let me say, it's not just India. I think, and this is something, I have been following the world economic, energy outlook by IEA for the last maybe a decade and a half. Another one is coming out later this month. It used to be the, 250 ppm scenario. Now it is a one and a half degree scenario. If you look at the mitigation options that IEA has been recommending for the last nearly two decades, 55% of mitigation options are, from energy efficiency. Now, the layman is, if this is such a big resource, and most of it, in fact, nearly half of these opportunities are negative cost opportunities like what we showed in Jala. It pays for itself. Now, why is there no discussion, debate, move forward, as far as energy efficiency is concerned, you have two international organizations on renewable energy, IRENA (International Renewable Energy Agency) and ISA (International Solar Allinance). Nothing wrong, I have nothing against that. But why is there no single organization for international intergovernmental organization focusing on energy efficiency only because, to my mind, it's not sexy enough to implement energy efficiency.
So I think it's an extremely important element, and I must say that, that way, this government and the Honorable Prime Minister, because I've had personal experiences while working in government, holds energy efficiency as a very, very important, resource. In fact, I still remember when he was launching Ujala scheme on 5 January 2015, where EESL had just about started. I still remember what he said. He said, look, if I ask, someone to put, to install a 1000 megawatt of solar, I'll have hundreds of people in this room who will be willing to do that. But if I say that I need you to reduce 100 megawatts of capacity by energy efficiency, there are not many people who will come into the room. And therefore, he said, that is why I feel this is such an important program.
I think if you look at the G20 Delhi Declaration, the, doubling of energy efficiency by 2030 is a very important step. I, think a lot of steps India has taken. If you look at, any country, particularly, in the developing, emerging world, I don't think anyone, has achieved so much in energy efficiency, both at the policy side and the market side. So I think it will be a very important element in our 2030 and beyond goals.
Sandeep Pai: Let me bring you to first principles, because I think a lot of our listeners globally and in India may not have such in depth knowledge about specific sector they're energy and climate people in general. But tell me from first principles, what does energy efficiency mean? whether it's on the supply side or the demand side. Like, what are some examples of energy efficiency, programs that you think can make an impact?
Saurabh Kumar: So I'll start with the demand side and come back to the supply side because it's relatively easy to do, supply side, energy efficiency. And a lot of work has been done in India as well. So let me start off by why. Because more than 50% mitigation options are energy efficiency, but yet it doesn't take place. And the reason is not very hard to imagine, unlike renewable energy, unlike any other form of clean energy, energy efficiency cannot be measured. It has to be agreed to. Now, what does it mean? And I'll give you a very simple example. I come to you that you are using a 14 watt CFL, right? I will give you Led, which may be two times more costly than CFL, but it gives you the same light at seven watt, right? And I tell you that, look boss, you don't have to pay me the extra, $2 or $3 that is there. You will save so much of energy every month and please pay me one dollars per quarter for the next two, three years. And if the Led bulb fails, I will replace it for your cost. More often than not, you will agree.
Now imagine this thought has stayed in your mind and you were using the CFL in your bathroom, which is maybe 2 hours a day. You say, oh, Saurabh said that there's so much benefit. So instead of replacing my bathroom CFL, let me replace my living room CFL which actually burns for 6 hours a day, right? And therefore, after a month, when I come to collect my one dollars, you'll say, boss, my bill has gone up, so you're fooling me. So this is the classical problem that it is a function of reduction of wattage and the way it is used, which is a very behavioral thing.
Now therefore, you can't measure it. You have to agree to this. How did we make this switch? The second part is that in the same conversation, I and you will sit together and say, look how many hours you want to use it. You'll say 2 hours. We base the calculation on 2 hours. the contracts are on 2 hours, regardless of whether you use it for half an hour or use it for half a day. So this is the basic problem of energy efficiency, that you can't measure it. Now, if you try and monitor it very intensively, imagine if you take even your office building, the changing light bulbs and air conditioners are not a very big thing, maybe a reasonably large building. All you need is about 100,000 US dollars. But if you want to monitor and make sure that all these issues that I just flagged, the behavior issue, the, climate issue, the environment issues are taken care of, then you have to do a very intensive measurement and monitoring which might actually cost you 25% of your investment and making your complete investment unviable. So these are the reasons of market failure. And therefore you need a very clear, if there is a policy that a government can come out with or a guideline that is the best otherwise standard contract documents which define these things. And different markets have used different things.
For example, US and UK have a very elaborate energy performance contract, ah, running into some 80-90 pages. When we tried to apply it in India, there was no way that you can apply those contracts here because they are such detailed legal instruments that a new market where people don't know what energy efficiency is, suddenly you give them a 70 page legal contract, they'll just run away. So we had to create our own contract. So that is why it is not easy to scale up energy efficiency. We were one of the very few examples in the world where we were able to scale without any subsidies in EESL.
Sandeep Pai: Let me take you in the direction know BEE and then EESL. So BEE, correct me if I'm wrong, is all about labeling and providing the right kind of incentives and markers for people or companies to think about that. This is how you can do green. These are some that stuff really works well in Scandinavia for example, because people do read labels and stuff. but then from BEE why was EESL created, I don't know if there is a direct connection between them, but how did that incentive based be model to actually go to the market procure and do stuff, model was created? Is there a connection?
Saurabh Kumar: Yeah, very much so. if you look at the Energy Conservation Act 2001, it says that energy efficiency is actually something which is good for everyone. So it should not need massive amount of regulations, which is right, but it does need some regulations, right? so it gives the government powers to do three things. One is, for issuing mandatory standards for labeling. Number two is prescribing building codes. And number three is to provide targets for large industries to comply with as far as specific energy consumption is concerned. Rest of it is all dependent on market. Now we did all the three things. The labeling program that you see, initially was a voluntary program. Now for most of the, equipments, it is a mandatory labeling, which means that if you don't have a single star label, you can't sell in the market. Similarly, building codes are becoming mandatory across India various states. And there is a Perform, Achieve and trade program, where the large industries are giving rolling targets every three years to reduce their specific energy consumption. But a large part of the market is outside these regulations, and therefore the need for EESL. In fact, while in Be, we tried to create a market of, opportunities for large scale energy service companies to come in. And these ranged from creating streetlight, DPRs across cities, water pump DPRs across the cities. We also set up a risk guarantee fund so that if there is an Esco which is coming in, it should get loan from the banks. But none of it worked. And therefore we thought that, look, while this is fine, but I think most of the opportunities lie, in the public sector, the municipal body, the distribution companies. So if we can create a, government owned body, it will become easier for those people who don't know anything about energy efficiency. There's a capacity gap, but they can easily give this project to EESL, and that's how the concept of the EESL was born. And in hindsight, I think it was a correct vision that was taken at that point in time.
Sandeep Pai: I'm sure you were part of the conversation, and actually, I think you were leading that. So when this idea itself came, there's always resistance, right? Like body queue, et cetera. Were there challenges in terms of people saying we don't need another organization? Especially you tried to bring together so many different PSUs and all that. Tell us a bit about how that was to navigate that space, to actually create this.
Saurabh Kumar: Okay, so everything gets born out of a crisis. The Bureau was in existence since 2001, after, the act was passed. And it was really not doing much up until Dr. Mathu joined. And that's when I joined about six months later. I was a novice in energy efficiency, but we slowly started to build a slew of good interventions and there was a good offtake, in the market, and the governments were also quite happy. But you need people resources, right? There were only about ten to twelve people in the Bureau of Energy Efficiency in those times. Things are different now. creating a post in the government used to take at least two years. I didn't want to lose that opportunity, so I started to look at what can be done. So again, if you look at, the Energy Conservation Act, it defines bureau as a body corporate. So I started to say that, look, the act allows you now it's only a question of, ministry approving it. So I put a business plan together. And, I called it BEE Services Limited. That you convert this body into a service company limited, and that's it. So that you get out of the shackles of the government and you then are a corporate body. And, the board has powers to create posts, do investments, and so on and so forth. And it was a very logical business plan. We went to the then secretary there, and he said, look, I agree with you that the act enables it, but let us look at the future. There will be many such when energy efficiency becomes a market, there will be many such players like BEESL, and XYZ. At that point in time, you need a regulator, and B is a regulator. So why don't you, let B remain what it is and you create something, else. So we came back, and knocked off D from the title, and it became EESL.
Sandeep Pai: Yeah, that's really interesting. Okay, let me move on to GEAPP. I might circle back to some of these questions, but I wanted to finish the whole journey and then zoom in on some of the questions. So you had EESL. It was launched, it was a novel, and I think we know a lot of its successes. But in your opinion, what, were some of the hits and misses, at EESL? And if there were some things that you could have done better, there's always things you can do better. So if there's any hits and misses at EESL, whether it's in terms of rollout of programs or whether it's in terms of just functioning, it'll be great for our audience to hear.
Saurabh Kumar: So, I think, to be honest, there were many, many hits which went very, very well. But I'll not talk about that, because I feel that you get the most learning from things that have not gone well. what did not go well? Two things. Number one, the Streetlight Program is the largest program in the world. Again, non subsidy based, where we replaced almost 13 million street lights in the country. But somehow the revenue collection from the, municipalities, possibly we could have paid more that I could have paid more attention on, and I take full responsibility of that. And the dues, started to burn EESL's, balance sheet, it's now getting better, but if that was looked at properly, some instrument could have been created or something like a shaky model could have been pushed. Things may have EESL may have been better, but that was certainly number one.
Number two was, we wanted to make a big dent on the super efficient cooling program. and twice we did launch, these super efficient air conditioners. For variety of reasons, some under our control, some beyond our control. I, think we failed to scale up. Now, how are we applying this in GR learning from the first thing that you need to make sure that your counterparty risks are managed properly, particularly when you're dealing with state government utilities. so what we are doing here in GR is looking at a sector which is now beginning to see private investment, which is the public buses, electrification of public buses. But again, the whole issue of counter party risk of the state transport utilities is very strong. So we, along with the government of India, are putting together a payment security mechanism to make sure that whosoever invests in those buses gets the risk mitigated and gets the return due. So that's a straightaway lesson learned in a previous thing, which is coming here.
So the EESL money, yes, it hit the cash flow, but because it's government to government, it can always be taken back in some way. But it was not a very good practice that at least I did there. So learning from that, given that the STUs are also a very similar counterparty, we are putting this together before the program starts. So that's the learning and how is applied here.
Sandeep Pai: Great. let's get to GEAPP now, first, of all, explain to us what is GEAPP? Right, let me read out. So we're not using only acronyms Global Energy Alliance for People and Planet. I understand that this is a consortium of three big philanthropies that have come together to shape people, and people focused climate policies, if I can call them. And GEAPP has done quite a bit of work in Africa and now scaling up in India as well. So can you give us a bit of background of GEAPP and how did you got into that space? Because at the end of the day, if my understanding serves me right, this is a philanthropy. So it's a very different ship than your previous stints.
Saurabh Kumar: Okay, So if I may say that this is one of the most unique organizations I've ever seen in my more than 30 years of career. unique in many terms. Number one, yes, you're right, the money is philanthropic, but the organization is not philanthropy. So let me explain. exactly two years ago, just before the Glasgow Cop, three large philanthropies, which is Rockefeller Foundation, Bezos Earth Fund and IKEA Foundation, they came together and they said we are going to change our operating model. The operating model of largely all these western philanthropies in any developing country is that they work through NGOs and not for profit organizations. They said, we are spending so much of money, but action is not happening on the ground. And therefore we will create an organization, give it philanthropic capital, but we will do it ourselves. So that is a change. It's not a philanthropy. it's using philanthropic capital, but doing it as well, that's number one. Number two, this also formed an alliance of 20, different entities, who, in addition to the 1.5 billion of philanthropic capital that Gia founders, committed, committed $10 billion, from their side. These are World Bank, ADBs, and so on and so forth.
So what is the power of this capital? A because you are leading it, doing it ourselves in countries, and we are present in seven countries. ‘A’ you can pick out areas, that you feel, can provide you the maximum impact. And the impact is measured in terms of new green jobs that are added, how much of carbon dioxide gets reduced. And the third one is, essentially access in Africa and reliable access in India. So these are the three impact goals.
So pick out an area, see where there is the most impact, of all, these three can happen. Go with your philanthropic capital, create a business model, where the entire risk is borne by our capital, and then leverage the other ecosystem, whether it is our alliance partners or private sector, something which I told you we are doing in the bus, thing that we are using, our capital goes first. So if there's a loss, if there's a default by our capital, is called on first. And therefore, I can leverage a whole bunch of private sector investment. So this is the power, a uniqueness of a platform that at least I have never seen in the and, that's number one. Number two, the vision of this organization is outstanding. The leadership is even better. So if you have the right kind of capital, you have right kind of vision and a leadership to back you, you can really make enormous amounts of impact. Yes, of course, you can't parallel the impact that you can do, while within a government. But next to that, this is the one. If you ask, how did I, choose to go there after my stint in EESL, I was kind of taking a break, doing freelance work and up. And until this opportunity came up, to be very honest, and I'm being very frank with you, about, one and a half years ago, one of the headhunters called me and said, look, American Philanthropy is looking for the head of India. Are you interested? I said no. He said why? I said, I don't want to sit in an ivory tower and sign cheques for 30 people. That's not what my life looks like. But they said, Anyway, we are evolving, and we'll get back to you. When I saw the job description and the vision, it was fascinating. Really fascinating.
Sandeep Pai: I was on a panel at the Climate Week with, GEAPP CEO. and one thing I understood from that panel is, while you have a clear vision, you are modifying the kinds of projects you do, whether it's in South Africa, whether it's the retraining programs or whether it's in India. So I'm curious about the kinds of projects because it's very context specific within your framework of the three things that you defined that GEAPP plans to take up in India. Like, do you have existing projects that you're funding and working on? And, what are the kinds of projects that in the future you would like to take up? Even this can be a guesstimate as well.
Saurabh Kumar: No, there's no guesstimate. We are actually doing projects. So let me tell you what is the principle behind which we have chosen the pathway that we have. We looked at India's journey, announcements for 2030 and we also looked at where we are on all these announcements, right? And I'll give you a simple example. India is committed to the 500 gigawatt renewable energy, non fossil fuel energy, by 2030. If I add all non fossil fuel energy today, it's not even 180 gigawatts, right? more importantly, our, annual run rate of capacity installation non fossil fuel is about ten to twelve gigawatt per year.
Now, if we were to reach the 500 gigawatt target, you have to do 50 to 60 gigawatt every single year. Now, how do you make a switch from ten to twelve to 50 to 60? And according to us, it is very much possible. it is not impossible, but it needs a very focused approach and two areas of focus that we actually, three areas of focus.
Number one is decentralized renewables that has really not taken off at all. And just two sectors, not very difficult, easy sectors. Agriculture is 150 gigawatt. Every government, state government wants to reduce this agriculture subsidy burden. You can do so if you, solarize your agriculture consumption. Number two is rooftops. Particularly in those areas, semi, urban, rural, where grid is always a challenge. That's about 50 gigawatts of opportunity. So this is a 200 gigawatt opportunity out of a 300 where multiple states can start doing it. You don't need to have thousands and thousands of acres of land. You don't need to run, transmission lines that you need to do in a utility scale. So we are helping two states, Maharashtra and Odisa, to create projects, aggregated projects. Because one reason why, these projects don't happen is that they are very small disaggregated and therefore the transaction cost is very similar to energy efficiency. And therefore, what we are doing is aggregating these projects, helping these states aggregate these projects. And they want to do a gigawatt each in a year's time.
We are digitizing the whole process of survey, of figuring out what the land is or a roof is, GIS mapping. All digital tools are being used so that, it is replicable across states. So that's one area of work that is already going on. The second area of work is how do you make sure that you have battery energy storage systems in the grid as soon as possible on a commercially viable basis. So another project of about 200 megawatt tower is being structured. The first phase will start implementation in the month of November. It is undergoing regulatory approval is to how do you create that flexibility storage in the grid so that your utility scale solar and wind starts getting integrated into the grid. So that's the second one.
The third important part I mentioned to you is India's journey towards decarbonization of transport. That we are working with the government of India to basically, make sure that the private investments start to happen as far as the bus transport, public transport is concerned. And also one very big gap, which we think is extremely important to fill, given the kind of, promise the sector shows, is innovation. Now, we all know how innovations in India, particularly the tech innovations, have really changed the way the tech sector, whether it is Edutech or even logistic tech, for that matter, your Zomatos of the world, et cetera, can we apply the same, successes to clean energy infrastructure based tech? So, we have two things. One, we've just finished, an innovation challenge called Entice entice, where we put out four challenge statements and ask innovators to come and provide their solution. Happy to report 200 entries, came, very high quality. We have an independent set of jury which is meeting next week to finalize who are the best in those category. and on the side of it, we also looked at the fact, if you look at the venture capital industry in India, most of the venture capitals want to invest in tech startups. Very simple reason. In three years time, you get multiple levels, of valuation on what you have invested in, and you take your money out and do, something else.
But in an infrastructure based clean energy startup, you need to be patient. It is a 8-10 year play rather than a two or three year play. And therefore, we are setting up a fund only to, finance, series A to these, clean energy, infrastructure based startups. So these are the three big buckets of, work that we are doing.
And finally, something that I mentioned as well. We see India has done quite good in energy efficiency. So we have just incubated a global resource center for energy efficiency, which we are now looking for a host. What the center will do is to it is creating case studies on what worked. Basically, what are the levers that worked, what were the policy levers, regulatory levers, business model levers, and how can we apply this lever, let's say, in a country like Nigeria, what are the tweaks that we need to have? So that's the work that, this entity is doing.
Sandeep Pai: That's interesting, that's like local to global or global to local super. Interesting.
I have to ask you this question because let's take the example of decentralized renewable energy, right? I can fully agree that it's a miss, especially in a country like India where that can really be scaled up. One of the reasons I feel, and you can correct me if I'm wrong here, is it doesn't give you the same headlines. It's so decentralized. As we were talking about the energy efficiency also, it's one thing to have a big 1 GW solar plant somewhere, but it's another thing to have very small, small scale. And a lot of your interventions, if I can characterize, are very tech focused, technology and economics focused.
But do you think that only that can solve because climate or energy is such a wicked problem which involves behavioral science. Like you have to think about people's, from jobs to all the different other social sciences and other different fields. So do you have people or projects that speak to the other side? Because obviously tech and economics are enablers. But then you also need to get people and others and maybe that will come up in the future. But I was just curious to hear.
Saurabh Kumar: So what I told you are projects that are, I would say, more flagship than others. Yes, we have, as I told you, an energy efficiency project. A whole center has been incubated. Plus we are going to start work with a couple of states on what is called the demand side management. Basically nudging people, through a slew of behavior change, financial incentives towards highly efficient equipment. But let me also mention why I still say that the distributed renewables is an extremely important element of what we are trying to do. Yes, you are right, it is not something that makes headlines, but we are trying to make headlines out of that. How we are doing this? We just took out 100 megawatt tender by aggregating 32 tracts of land in Maharashtra. We are trying to convert a decentralized, renewable, project into a quote unquote utility scale project to attract the big guys.
Why it is important. Let's forget about the climate, for a moment. What is India trying to do? Let's decipher that. It's a very important, intuitive, thing as against what other countries have done, including China. I mean, all countries have developed, become developed countries, over whatever time frame, using cheap fossil fuel energy. India is the first large developing country that will develop in the next 20 odd years using sustainable energy. It's a big change. It's not a small change. I mean, this economic model does not exist. So we have to craft our own model. And therefore you need to do things which are different from the way it has happened. That's how I see it. And I think we are on a very good path, as a country, to show to the world that, yes, this is the way to do it. And we have done this in the past.
Sandeep Pai: Great. I agree with you. I think countries like India haven't even carbonized, and we're still trying to decarbonize, which itself is commendable. So let me ask you one kind of one or two last questions. You've given so much time. so at G20, there was this pledge to double the rate of adding energy efficiency solutions. So I'm trying to steer you towards the future.
What do you think needs to happen? It's, one thing to declare all these things. I mean, not just anything, but how do we go from this declaration to actually making it a reality? What are two or three key things that you think needs to happen?
Saurabh Kumar: So, again, let's start, with India, and then we can apply it elsewhere. Look at the energy consumption patterns of India. in terms of energy use. households is 20 odd percent, agriculture, 20 odd percent. Industry is about 30 35%. And rest is transport.
So I think putting in efficiencies in transport and industry are the two biggest set of challenges. And I think India has already started by the electric mobility, you also increase energy efficiency of the vehicles because the conversion of energy is very high. I mean, there are no losses. So that's clearly a pathway that India has started off, not just in public buses, but also look at the two and three wheelers. I think the kind of policy and the regulatory framework that exists in India, very few countries can boast of it. Of course, developed countries have been given a lot of subsidies, but the kind of vehicles that India has, is very different from what US or UK. So I think that's one thing that India is already doing.
Number two, is industry. And the Perform, Achieve and Trade program is coming out to be a very, very good program. In fact, that is a program basis, which the domestic carbon market is now being set up. So I think as India is concerned, given that these are two programs that are working extremely well, targets are also quite, I must say impressive, for bus program, there's a target of 50,000 buses, replacement in three years. That's not a small achievement by any means.
Europe, replaced about 1000 electric buses last year. So we are already talking about 50 times what yes, of course, China is a different, country. so it's a very aggressive target. And there are lots of lessons that India's pathway has. And again, at GEAPP, we are trying to support Nigeria in a very similar bus program and Indonesia in a very similar bus program, because, again, the issues are very similar between these three countries.
Sandeep Pai: Well, thank you so much, sir. it's really been a pleasure talking to you and just hearing your personal journey, but also your journey in terms of your thinking. And thank you for such a candid, 360 degree conversation. I really appreciate it.
Saurabh Kumar: Thank you very much. It was extremely enjoyable.
Thank you for giving me this opportunity and look forward.
Sandeep Pai: Thank you.
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