It is a great pleasure to be here in New Delhi and a privilege to be addressing this group of experts on clean energy on the eve of the 9th Renewable Energy Expo. This is my first visit to India and I have been impressed by what I have seen and learnt so far.
Your Prime Minister, Mr Modi, has referred to the UK and India as an unbeatable combination and I can see why. Our co-operation on energy issues is second to none, strong and growing. We share many of the same challenges. Both countries’ priority is sustainable economic growth. And both countries recognise that this is impossible without secure, affordable and sustainable energy.We both have ambitious plans for renewable energy. And we both have world class expertise in R&D, technology, finance and business to make the low-carbon energy transformation a reality.
Over the course of the day, I have met Indian Ministers and others. The ambitions and drive of Prime Minister Modi’s government is tremendous. The scale of what the Government wants to achieve, like 175 GW of renewables by 2022, and the work already underway to deliver is impressive.
Private sector collaboration
This evening I want to celebrate the existing commercial collaboration between our two countries, and highlight the tremendous potential to go further. Our private sectors are dynamic and complement each other.
India invests more in the UK than in the rest of the European Union combined. Tata is the largest manufacturing employer in the UK at 45,000 employees. At the same time, the UK by far is the largest G20 investor in India, with US$22.2 billion investments since 2000.
In energy, UK companies are collaborating with Indian firms across the sector including renewables, gas and nuclear. At $7.2 billion, BP’s joint venture with Reliance Energy is one the biggest foreign direct investment in India ever.
At the other end of the scale, innovative new technologies are gaining ground. Award winning UK-based Cyan technologies has secured orders of over £1 million with Indian businesses, including Tata, for smart grid pilot projects.
That is why I am very pleased to welcome the strong group of UK companies present here that are already operating in the Indian Market. The UK is keen to support your operations in India. UK Export Finance, our export credit department may be able to help with financing solutions. We have committed £1 billion for this purpose, covering the broader infrastructure sector as well.
Financing in London
And that brings me to another area where the UK can assist India and Indian companies in their transition to clean energy and low carbon infrastructure – financing and the City of London. In practical terms to ensure our energy security and to reduce carbon emissions the UK needs to raise £200 billion by 2021 for investments in power projects, improved networks, and heating and energy efficiency measures.
Between 2010 and 2013, the UK mobilised £45 billion private investment in electricity generation and networks.
There were two things that allowed us to achieve this:
- the strength of London as an international financial centre; and
- strong policy frameworks that give confidence to investors.
Similarly, I am told more than a third of India’s $1 trillion infrastructure spending will be towards electricity, renewable energy and oil and gas. Over three quarters of this will need to be from the private sector. I encourage you to raise your capital for clean energy in London. You will get access to a wide pool of international investors. We have a simple and favourable taxation regime. You will have the opportunity to be included in major indices. You will benefit from the prestige that a London Stock Exchange listing brings. And we offer the possibility of raising money in your own currency. London is the premier financial institution for capital raisings in different currencies.
UK India collaboration
Our governments are also closely working together to ensure we create the right policy frameworks to encourage private sector investment. India’s NITI Aayog recently released the India Energy Security Scenarios, drawing on the UK’s Energy pathways calculator 2050. This examines the long term trajectory of energy supply and demand.
India’s pioneering policy for industrial energy efficiency - the Perform, Achieve and Trade scheme- drew on UK’s Climate Change Agreements and the EU Emissions Trading Scheme. I understand the Government of India recently approved a new Off-Shore Wind Policy. Ahead of this the UK was able to share our experiences in setting up a leading Offshore Wind sector. In all these areas, and others, we continue to share learning, and the UK and India work closely and collectively together to shape policy.
New Climate Economy for low carbon
Clean energy is the energy of today, and tomorrow. New Climate Economy, as well as a recent Deutsche Bank report found that solar is reaching grid parity in many markets. This demonstrates the unprecedented fall in the price of renewables over the past few years. A low carbon transition has been forecast to increase productivity in India and allow people in India to enjoy cleaner air, energy security and wider access to water and electricity.
Investors in any market of course need certainty. I firmly believe that securing an ambitious deal in the international climate change negotiations in Paris in 9 weeks’ time can provide that. It will send a clear long term signal to investors and business that Governments are committed to delivering a global low carbon economy.
A deal will also drive the scale of innovation and policy action that is needed for a global transition to low carbon at the pace required.
Ladies and gentlemen, India and the UK want the same thing – secure, affordable and sustainable energy for all. We have much to gain from working with each other. And I am sure together we will make it happen.
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