IEA will support India's green tech manufacturing roadmap: Fatih Birol

In a Q&A, the executive director of global agency outlines his plans to discuss with the govt measures to divert critical mineral production and refining

Executive Director of the International Energy Agency (IEA) Fatih Birol tells Subhayan Chakraborty that nations are positioning themselves towards the new industrial age focussed on green technologies, and India should become a natural leader in battery, solar and EV manufacturing.

Birol stressed India is not historically responsible for the climate crisis, argued Russia's energy export revenues have dipped 30 per cent in the past 12 months, and outlined his plans to discuss with the government steps to divert critical mineral production and refining. Edited excerpts:

You will be meeting Prime Minister Narendra Modi for a roundtable on energy on Monday. What will the main focus of your discussions be?

This is the main purpose of my visit to India this time: I will discuss with the Prime Minister and other ministers IEAs support to create a roadmap on how India can quickly step up manufacturing capacity for green technologies.

I am also the head of the energy board of the World Economic Forum and I can tell you that there is a lot of competition among nations for positioning themselves towards the next chapter of industrial growth. Given India's strong economic fundamentals, it should be one of the leaders of this new industrial age.

What are IEA's official submissions on energy transition to the Indian government?

India has had an impressive track record in green transition. In recent years, India has provided electricity to 500 million people, which is close to the population of Europe. Another initiative which does not get many headlines, but has been discussed widely by IEA colleagues, is the Ujjwala scheme, which has changed the lives of women and children.

It has promoted renewables by widely distributing LED lights. Now, the next step for India would be to play an important role in clean energy technology manufacturing.

Demand for renewable energy technologies has led to a meteoric rise in demand for critical minerals. How would this supply chain shape up?

China remains a major player in critical minerals refining. Unlike oil and gas, critical mineral deposits are everywhere but countries have not begun to tap into their production. But now mining for these minerals is mushrooming across the world. Outside China, we are seeing this in the United States, Canada and many Asian nations.

The first major international forum for critical minerals will be organised by the IEA in June. I will be inviting India to that meeting to discuss how to divert critical mineral production and refining.

You have said countries should not rely on one economy to make the green transition. Can you elaborate?

Nations are now focussed on the production of new technologies such as batteries, hydrogen electrolysis and e-vehicles. Today, these sectors are massively dominated by one country. About 75 per cent of batteries, 90 per cent of solar PVs and 80 per cent of wind equipment are made in China.

China has made a very good move by reducing the cost of production of these technologies. The reliance on one single supplier or one country is always risky.

India has refused to come on to the Just Energy Transition Partnership discussion table as long as coal phase-out is on the agenda. How fair do you think this ask is?

Coal is still a big chunk of India's energy generation. It would be unfair to ask it to stop using coal, without it being replaced by another source of electricity.

India is not responsible for the climate problem we have today. When we look at carbon emissions over the past 100 years, India's share is only 3 per cent of the global total, while its population is 18 per cent of the global total.

There should be a gradual reduction in coal production, but not because it is asked by other countries. It should be reduced keeping in mind the health and well being of India's population.

How will the global energy transition be affected by the volatility in current energy markets?

Today, we are in the middle of the first ever truly global energy crisis. We have never had a crisis of this depth and complexity. Oil and gas, coal and electricity markets surrounding the world are in turmoil.

On February 24, 2021, before the invasion of Ukraine began, Russia was the largest energy exporter in the world, exporting coal, oil and gas. On March 1, I had said the invasion will accelerate the green energy transition. Looking at the numbers today we see that all clean energy technology has been turbocharged around the world.

Do you think the current growth in renewables will hold?

Last year the growth in new renewable energy capacity globally was 25 per cent, the highest ever in history. Improvement in Energy efficiency was at historical high levels.

We have also seen nuclear energy making a comeback in many countries of the world and a higher appetite for other sources such as hydrogen and electric cars. In 2019, only three per cent of all cars sold in the world were electric powered but last year this figure had risen to nearly 15 per cent.

The reason behind the sudden group is because many countries are pushing for energy transition for energy security reasons, unlike the past when it had been done for environmental reasons. I think this is good news for a country like India which is majorly dependent on import energy but is also emerging as a leader in renewables.

Till when do you think the ongoing global energy crisis would continue?

Global oil markets this year are filled with answers with the biggest one being China. We expect global oil demand to increase by 1.9 billion per day in 2024. Half of this demand would come from China. If China's economy rebounds stronger than is anticipated then this figure will be even higher.

Let's not forget that last year global Oil gas markets had a special year because it was the first time in 40 years that China's domestic oil and gas consumption declined due to the pandemic. Now, it's going up. With the Chinese economy opening up, this can create a serious challenge for the oil markets.

Despite the Western price cap, predictions of Russian crude oil exports slowing down have not come true. What impact do you think this will have on international markets?

When we look at the situation on a year-on-year basis, the most important thing is revenues. Russian oil and gas revenues declined by close to 30 per cent in the 12 months ended January 2023, as compared to the same period a year back. This is a big decline for Russia given how the selling price has now been lowered.