Let me start with mind-churning questing.
Can a Business Model become a useful tool for the Managers of the Indian Power sector to meet the challenges arising due to energy transition?
And my answer to this question is “YES”. Probably, “Winners Sustainability Model©”, a management tool developed with the sole intention of Business Sustainability, may be helpful in strategizing & converging the efforts towards this.
1.0 Why this question?
This is because the present-day’s Indian energy sector is predominantly fossil fuel-based. Coal is the prime fuel for thermal power plants. Crude oil is used for industrial boilers. Petrol and diesel for surface transportation. Aviation fuel for aircraft is also derived from fossil fuels.
2.0 Understanding energy transition:
So far, as the energy transition is concerned, we are intended to use renewable energies, biodegradable and eco-friendly fuels. Surface transportation is by EVs which are likely to come in a big way for terrestrial transport. Aviation by using biological fuels which are already under test. For the power sector, the transition from centralized coal-based super thermal stations to localized Renewable energy generating stations.
The transition is inevitable, one, to save the earth from global warming and other ecological problems and secondly to get away from the expensive import of fossil oil fuels. For the power sector, the changes in generation pattern will also necessitate changes in transmission pattern, distribution pattern, load dispatching modalities, cross-subsidy pattern etc.
3.0 Expected Challenges:
Infirm power from wind and solar energies will need to be backed up by controllable sources such as pumped storage plants. The low "capacity utilization factors" and low efficiencies of renewable sources will make the power costlier than cheap fossil fuel-based power. The transition will be cost-intensive. which may result in consumer resistance.
Efficient and practical methods of energy storage need to be found. Bio-degradable batteries, cheaper batteries, and dependable inverter devices will open up new challenges. Repairs and maintenance of state-of-the-art electronic devices, and generating devices in rural areas will provide skill set problems. Import-export tariffs in net metering will need to be more lucrative to draw in small rooftop solar generators. As there is no major breakthrough in battery technology and their high cost, the transition to hydrogen fuel may be a less problematic option. Hydrogen cells are easy to handle, disposable and cost could be lesser due to mass production possibilities.
4.0 Business Model to Tackle These Challenges:
As we understand, any transition is a process to change. And any change causes turbulence. The energy transition is no exception. This turbulence brings instability, which needs to be countered through a sustainable business model.
5.0 Gap Analysis:
For controlling the turbulence, as a first step, we need to know ourselves first; our present capacity & capability and the future requires that the transition would bring. This means we need to make a stock of the present situation with the appropriate method of monitoring & measurement and a robust process of Gap Analysis. We must know where and why the gap exists and how can it be reduced. And then develop and deploy a business strategy that can neutralize the turbulence. This will call for a systematic strategy with appropriate learning integration.
Skill Gaps may be found in various operational areas and at various levels of the organizations. So as skill development activities in Indian power industries is concerned, activities may be grouped as per the requirements. In this VUCA world, where everything is volatile, uncertain, complex and ambiguous, gap generation is so natural and common phenomenon that now it is almost impossible to eliminate fully. At the best, the gap may be reduced. This is the biggest challenge that transition would bring.
6.0 Sustainability Perse:
The concept of sustainability is composed of three pillars: Economic, Environmental, and Social—also known informally as Profits, Planet, and People or ‘3P’s. This gives a framework called ‘Triple Bottom Line’. Of course, we may add three more ‘P’s (Prosperity, Peace and Partnership) to the most important of this ‘3P’ called People.
The energy transition and the subsequent changes in operation philosophy, maintenance practices, and supply chain management – all would have an impact on all these ‘3P’s. Zero harm, the first focal point of business sustainability, means no incident like accident, occurrence, unintentional fire or discharge or any abnormal activities, which is harmful to the life, property and environment.
A recently published report identified that 100 energy companies have been responsible for 71% of all industrial emissions since human-driven climate change was officially recognized. the energy transition is preliminarily and aimed to reduce these industrial emissions with consideration as the duty of corporations to redress climate change through environment-friendly power generation techniques. Adaptation of a “Business Sustainability Model” helps the organization to systemize and monitor its performances.
7.0 Winners Sustainability Model©:
Based on the varied training and consultancy experience, the author has developed a generic Business Excellence model or a Sustainability Framework and named it as “Winners Sustainability Model©” to address sustainability issues of the businesses. This model, rather a framework, can be used to address and assess the change-related issue. The model also supports energy-related strategies supporting innovation, Learning & Development, Legal & Regulatory etc.
This model can be an integral part of the development of the corporate business strategy and can be percolated down further as lead & lag measurement parameters in the corporate Balance Score Card or unit level SMART objectives and even up to KRA & KPI of the individuals so that efforts towards any ensuing change can be focused effectively. This model provides a framework for effective deployment and also can be used as an ‘Assessment Tool’, which shall be able to find out Opportunities for Improvement and Non-Conformity along with their impact levels adequately.
The Application of the model shall follow the following important steps:
1) The model is incorporated from the Strategy Development phase itself. Considering the model as a framework, the management of the organization and the assessors agree on a protocol. The protocol points become the parts of the business strategy.
2) The next step is the deployment of strategy. The organization ensures implementation of the protocol points with sanctity.
3) Third major step is assessment or audit. The protocol is used to pinpoint the positioning of the organization for sustainability per se. The assessment report will contain the following:
4) After this, the organization may even go for a compliance audit/assessment
5) There may be a possible benchmark of performance for each of the categories included in the framework.
The framework of the Winners’ Sustainability Model© is divided into 10 (ten) distinctive Non-finance Modules. The Modules of the Model (or Framework) are as follows:
o Module 1 – Leadership & Governance (L&G)
o Module 2 – Legal & Regulatory Requirements / Compliance (C)
o Module 3 – Risk Assessment (RA)
o Module 4 – Work & Organization Management (WM)
o Module 5 – Occupational Safety (OS)
o Module 6 – People’s Competency / Learning & Development (L&D)
o Module 7 – Human Focus
o Module 8 – Environment
o Module 9 – Corporate Social Responsibility (CSR)
o Module 10 – Operational & Business Excellence
Almost all modules will be helpful to assess and envisage the challenges occurring due to energy transition.
From the discussion hitherto we had, it has been now to some extent understood that a Business Sustainability Model like “Winners Sustainability Model©” a management tool developed with the sole intention of Business, may become a useful tool for the Managers of the Indian Power sector to meet the challenges arising out due to energy transition by strategizing & converging their efforts.