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BW Businessworld

We Must Prepare For Shortages: Andrés Gluski, President & CEO, AES Corporation

“AES is taking decisive, measurable action to transform our portfolio, and exit coal-fired plants in a planned and responsible manner. We’re shifting our portfolio to green and sustainable energy”

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Andrés Gluski, President and CEO, of the AES Corporation delves into the future of the Indian energy sector, the technologies that can empower it and the role of a global energy distributor like AES in meeting India’s ambitious renewables goals of 450 GW by 2030, in a conversation with Annurag Batra, BW Businessworld’s Chairman and Editor-in-chief. Excerpts of the interaction:

As the CEO of one of the world’s leading energy companies, how do you see the future of energy and the move towards decarbonising the energy sector? 
At AES, we are creating innovative solutions that enable us to help our customers to rapidly decarbonise. At the same time, AES is taking decisive, measurable action to transform our portfolio, and exit coal-fired plants in a planned and responsible manner. We’re shifting our portfolio to green and sustainable energy by investing in technological and commercial innovations. More than a decade ago, we started investing in lithiumion battery technology to achieve grid-scale energy storage. Today, Fluence, our joint venture with Siemens, is the global market leader in energy technology solutions and services. We also made a strategic investment in 5B, an Australian solar technology innovator. Their prefabricated, accordion-style Maverick solar systems allow us to install solar projects up to three times faster using half of the land of traditional solar. Lastly, we have ownership in a company called Uplight, which is the largest cloud-based energy efficiency provider for customers and has access to more than 100 million households and businesses in the United States.

Under your leadership AES has set ambitious decarbonisation targets. Tell us about your 2021 goals and the longterm direction for the company. 
AES has one of the most ambitious climate goals in the energy sector. Our goal is to achieve portfolio-wide netzero carbon emissions from electricity sales by 2040. We set a goal to reduce our coal generation portfolio to under 30 per cent by the end of 2020 and now we are working to reduce to less than 10 per cent by 2025, in terms of megawatt-hours generated from coal. While 2040 may seem far off, we have set very clear short- and medium-term goals to get us there. For example, we recently uppded our target of adding new renewables under long-term contracts to 4 gigawatts per year.

The pandemic has been hard on everyone – businesses, countries, and billions of people around the world. The response by leaders in the public and private sector has varied greatly. You’ve been in leadership roles for more than three decades and have been the president and CEO of AES since 2011. How has this crisis impacted your approach to leadership?
AES is a values-driven company and safety is our highest priority. We not only take on the safety of our employees, but of our contractors as well. Ensuring the safety of our people throughout the pandemic wherever they are in the world has been a key area of focus for me. We pivoted to telework and instituted strict safety measures for our essential workers at our power plants and for those who go out into communities to maintain utility service. We secured personal protective equipment (PPE) supplies for our crews, organised vaccination campaigns, assisted those impacted by Covid, both inside our company and in the communities we operate in and even aided the construction of a new Covid wing at a municipal hospital.

Since the initial months, I have been hosting weekly and now bi-weekly webcasts and opened the call-ups to employee questions. We have also brought in leading public health experts to offer advice. As a leader to thousands of our employees, I wanted to communicate reassurance and provide reliable information about the pandemic during this very uncertain time.

Disruptions to traditional business models are now occurring faster than ever before. What can you share about the disruptors in the energy market? 
These challenging times also underline the need to keep learning and keep innovating. In the past year, we’ve explored new sources of energy, such as green hydrogen and we now have a large-scale green hydrogen project underway in Latin America. We’re continually looking at our utility-scale batteries, evolving the technology to meet current and future energy needs.

What I see happening now in the energy transition is explosive growth, in the United States, in India and other markets as well. I’ve been saying that we need to think ahead about shortages. There have been and we will continue to see shortages of everything – in particular, shortages of basic materials and parts needed by developers. I think land is also going to be a key constraint in the growth of renewables, as we continue to pursue clean energy solutions.

The energy sector has taken steps to transition towards cleaner energy solutions, globally and in India. What are the areas you are bullish on?

I’m bullish on the clear change in sentiment that we are seeing across various groups toward clean energy and the commitment to sustainability. We are seeing a great push from all stakeholders, from governments to large companies and individual consumers for a green transformation. I’m also bullish on the growth of new technologies. As I mentioned earlier, we see our partnership with 5B on prefabricated solar as a great enabler of more renewable energy development. I see this solution as critical for several reasons – but particularly because it addresses the concern of scarcity of land, which we’ve found to be particularly relevant in India’s urban centres. One other area we’re seeing is using energy storage to make better use of transmission lines. By adding energy storage to existing transmission lines, you can avoid the need to build more and more transmission, which is great for consumers and great for the adoption of renewables.

What do you think governments can do to accelerate the adoption of clean energy and more sustainable solutions?
I applaud Prime Minister Modi’s vision in his commitment to bring in 450 gigawatts of renewable energy by 2030. Battery-based energy storage provides the flexibility and agility to better integrate these intermittent solar and wind energy resources into India’s electric grid and ensure highquality and reliable power for consumers.

We put in the first grid-scale energy storage system in India. Launched in 2019, the project in Rohini, Delhi includes 10 megawatts of energy storage. We did this first demo in Delhi to give regulators the opportunity to come and see how it operates. We believe the project can pave the way for wider adoption of grid-scale energy storage technology across India, but the regulations aren’t in place to allow energy storage to be widely adopted yet.

You have excellent engineers and scientists in India, and you have very forward-leaning regulators, but it really needs to come down to certain critical policy decisions with national energy storage targets and pricing mechanisms that can allow fast-acting energy storage to support renewable energy integration and ensure stability of the system.

You just referred to India’s goal of adding 450 gigawatts of renewable energy by 2030, and you talked about the advantages of energy storage. What do you see as the best path forward for India to accelerate its energy transition?
India has a crucial role to play in solving global warming. It is a growing economy and currently one of the largest solar markets in the world. And I think that 5B technology could make a significant contribution to India reaching its energy resiliency and sustainability goals. We’re working with local manufacturers to roll it out but first some related regulations need to be approved by the industry regulator. We have the technologies, we know we have to produce the technology in India, and it has to be localised to meet the needs of the local market. What we need, though, is support from the government which will enable us to implement these new technologies.

What are the top three things you would look to achieve in India a year from now?

The first would be to start manufacturing the 5B Maverick prefab solar in India. We also hope to bring energy storage to India in a bigger way. We also have artificial intelligence (AI) and digital services at AES, including AI-enabled bidding engines. We could bring some of these digital services to India as well. We want to partner with India and help the country grow. It’s going to be very exciting if we can work together and get that done.

You told us about staying agile and the importance of continuous learning. What are some of the books that you have read in the last 16 months? What keeps you going?

Recently, I’ve read books about new technologies like green hydrogen, the political situation in the United States and also books about psychology in terms of how people find fulfilment in work. I’ve focused my reading on a combination of psychology, self-help and a little on the technological side.