Electricity costs to fall sharply thanks to RE boom, predicts Gautam Adani

Thanks to renewable power boom, the marginal cost of electricity will continue to drop sharply and India will emerge as the least expensive producer of renewable energy, he said

Thanks to renewable power boom, the marginal cost of electricity will continue to drop sharply and India will emerge as the least expensive producer of renewable energy, Gautam Adani, Chairman of Adani group said today.

Speaking at the TiE  global conference, Adani said that as renewable power sources will always be free, there is no limit to how many electrons a power producer will be able to pull out from a square inch of silicon. "What makes this mix of solar, wind and storage even more transformational, is its combination with digitisation," he said. Adani said just like energy, the cost of digitisation based on storage, processing, and networking will continue to follow a steep decline curve for several decades and the marginal cost of managing bits and bytes will keep dropping.

Adani cited the example of drasic 95 per cent fall in data prices which has led to consumption of data increasing by 56 times in the last five years.

"Therefore, in addition to being individually disruptive, when combined, the implications of marginal cost-based renewable energy and information technology are stunning. Therefore, I expect that inexpensive green power in combination with digital technologies - that include sensors and internet of things, artificial intelligence and machine learning, 5G and cloud infrastructure - will all converge to give us the ability to economically micro size several processes, and convert every process into a service," he said.

Micro farming, micro water, micro healthcare, micro housing, micro education, micro manufacturing, the list is endless and the implications of renewable energy and technology being able to de-size existing processes is profound for both – urban - and even more - for rural India, he added.

On the implications of Covid-19, Adani said that it led to transformational changes across the world which will help the country in the log run. "The pandemic has driven home the fact that hyper-efficient supply chains are also hyper-fragile. The primary objective that drove supply chains for the last 20 years was cost. Post Covid, flexibility will be treated as equally important and allow supply chains to evolve to where they should have been in the first place – multi-sourced and a lot of localisation to support individual markets," he said.

Besides, the acceleration in digital technology to manage operations remotely means there will be a structural shift between global locations where people need to be - and locations where operations need to be executed. "The pandemic has taught us that the conventional need for proximity may be irrelevant plus risk prone. India already had a head start in this area through its digital services evolution. It is now positioned to be a significant

beneficiary of this shift in the coming days as more companies plan to divide execution and control operations," Adani said.

Both these areas are transformational and can help create millions of new local jobs across the manufacturing, supply chain and tech services sectors, he said.

Adani is a leading player in electricity generation and distribution, port operations, city gas distribution and has made an entry into airport operations. It plans to become world's biggest renewable power company by end of 2025.