Leaders With Lacqua Goes Green: ReNew CEO Sumant Sinha

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On this series of leaders with Blackwater goes green.
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We've spoken to key decision makers from sovereign wealth funds to waste
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management companies and even leading philanthropists to see how they're
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navigating the climate transition. And we finish with an entrepreneur who
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wants to be at the forefront of the clean energy revolution in both his home
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country and across the world. Sumant Sinha is a founder of one of
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India's largest renewable power developers and the first to list on the
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Nasdaq. A former banker in New York and London.
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Sinha returned to India and founded the company in 2011, expecting the country
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to experience rapid growth. He says India will become the largest
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contributor to global energy demand, requiring even more power than the U.S.
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or China. On this episode, we discuss his
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professional journey, the opportunities and challenges from the climate crisis,
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and why he thinks India will have to grow in a unique carbon light way.
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So thank you so much for joining us on Leaders with Black Women.
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You have an amazing story. You were a banker.
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You happily live in London and then Delhi and you think, actually, I want to
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be an entrepreneur and I want to be an entrepreneur or renewables.
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Yeah, You know, life doesn't go in straight lines, as you know, right?
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So everything sort of leads up to it. And eventually when you look back, it
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sort of all makes perfect sense. But when you're going through the
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motions, you're sort of just trying to optimize the next decision.
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So I was a banker, as you said, in New York, in London for a while.
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But then I wanted to go back to India because I felt that India would
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eventually grow, just like China had done.
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And so I thought that it would be a good sort of place for me to take forward the
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next part of my career. So I went back to India and I joined a
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corporate as a CFO, a large business conglomerate, and I worked there for
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about six years before I then decided to start on my own.
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And, you know, the desire to be an entrepreneur had always been there.
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It was just that I didn't know exactly what I should be doing.
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But getting into renewables and working for a renewables company actually gave
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me the opportunity to understand the sector.
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And as a finance person, it is very important for me to get sectoral
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understanding of something at a very early stage, and renewables and climate
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change in general ended up being that area.
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So I'm really glad that I got into it because it really opened up doors for
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me. Is this India's decade?
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I would say so. I would say so.
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And I think not just in not just a decade, but I think the next 20, 30
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years are going to be India's, I think much like the last 20, 30 years were a
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period of time when China grew dramatically.
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I think it's going to be India's turn or the next 20, 30 years.
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And I think we have all the right ingredients in place right now.
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We've got good, stable political leadership which really wants to make
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India a developed country. You know, we've over the last five, ten
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years put a lot of building blocks in place on a macroeconomic basis.
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And so I think everything is primed right now to to get India to sort of
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really cross over to 70% consistent growth over the next 20 years.
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So there's been a lot of parallels actually between India and China or at
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least drawn into that. China chose at some point to be the
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manufacturer of the world. India did it.
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Do you see parallels between how these economies can develop?
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I you know, I think they're going to be largely different parts because
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obviously the Chinese political system is very different from India's.
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And I think that itself will lead to different outcomes.
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Hopefully India's growth is more sustainable, more long term because of
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of the different pressure, but as we have in our system, but also, therefore,
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everything takes a lot more time to work out because there are many noises that
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have to be that have to be addressed and dealt with.
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But I think as in when the the the whole sort of ship starts moving, it moves in
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a more sustainable manner. And I think that's hopefully what is
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going to happen over the next many years.
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As far as manufacturing is concerned, I don't think that India is going to be a
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great manufacturing country of the type that China has become.
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But I think on the other hand, we'll find our own model, you know, will be a
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great service. This country will be a great back
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office, will be great. Hopefully at some point it will become a
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front office as well. And obviously infrastructure development
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is going to be a massive opportunity in India as well.
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And I think the government is trying to push manufacturing.
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So we may not become the China manufacturing, but we'll certainly
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become the plus one to China in manufacturing.
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And so where does renewables fit into all of this?
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I mean, this is, you know, greening a big economy with many citizens and also
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finding the right infrastructure in place.
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Yeah, look, I think renewables is absolutely critical in India right now
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because and I'll give you some numbers. If you look at where India is today, we
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already have the third largest energy market in the world and our per capita
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energy consumption is among the lowest in the world.
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India is now growing at 7 to 8% every year, which means that there is going to
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be a massive increase in energy demand in India over the next several decades.
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In fact, we're going to be the largest contributor to global energy demand
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compared to any other country. But as the US or even China.
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Now, the question is if we grow like every other country so far as corn,
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which is using a fossil fuel intensive mechanism of growth, the amount of
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carbon emissions that will put into the atmosphere are going to be enormous,
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which is going to be horrible for everybody in the world, including for
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Indians. And therefore we have to follow a
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different path. And that path has not been done by has
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not been followed by anybody else. So we have to evolve our own unique path
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to grow in a carbon light way. And that fundamentally, therefore, will
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require a huge amount of more renewable energy capacity.
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And, you know, when you do the numbers and you look at energy growth and you
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look at how much renewables has to contribute, you you know, you realize
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that India has to add almost 4 to 5 times the amount of renewable capacity
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in the next 20 odd years, as much as the US has from all the power generating
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sources today. So the US, for example, has about a.
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Gigawatt of power generating capacity. We introduce bills have to add about 45
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gigawatts in the next 20, 25, five, 45,000 gigawatts and the next 20 to 25
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years. So I mean, the investment required is
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going to be enormous. The effort to get this done is going to
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be massive. But eventually that's the only path that
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exists for both India and for the world. But India also wants to be energy
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independent. And so does that mean that there will be
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a continuous use of coal to make up for, you know, energy when renewables are
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slower, but also in the transition period?
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Yeah. Yeah.
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You know, I think it's an important issue that you raised as he India's
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growth of energy demand is such that we cannot in the short term meet all of
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that through renewable, renewable energy, irrespective of how hard we are
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pushing growth right now. So some part of the balance will have to
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be made by coal for the near-term. But I think by 2035 or so, I think we
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reach a level of renewables addition. We won't actually need coal and we can
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then start replacing coal. So by 2045, by 2050, will, you know,
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coal would have gone down substantially and renewables will form the large part
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of the grid and maybe nuclear and hydro and so on.
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So I think give us a little bit of time and we'll get to a point where our
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energy system will be fundamentally driven by clean energy.
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And that will also, by the way, have a massive benefit for India because it'll
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decrease our dependence on imports of fossil fuels.
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Today, India pays almost $200 billion every year for imported fossil fuels,
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which is a big Achilles heel of India's economy.
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Now, all of that will get addressed, and I think the government recognizes that.
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And Prime Minister Modi has been pushing forward the whole issue of energy
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independence through renewables very substantially.
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So so might you start you in 2011? I imagine there are many ups and downs.
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First of all, was how difficult was it to convince that the future for, you
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know, Indian energy was green? You know, when you start a business, any
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business, I would imagine, you know, in the beginning phase, you're not really
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thinking about what's going to happen to you 50 years later.
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You're thinking about what might happen to you 15 days later.
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And so the challenges are very immediate.
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And so when I started, my intention was to just set up a, you know, a reasonable
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business and and then grow it depending on how things would evolve.
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So I would say for the first two, three years, we were just looking to try to
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prove the fact that as a company we could actually get projects executed,
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that we could raise capital for it and those kinds of things.
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It's only subsequently after we got to a certain size three or four years into
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our journey that I really started sort of putting my head over water and
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looking at the future. And and at that time, the futures
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started seeming a lot brighter than what I had, you know, been able to anticipate
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until that time. And I think then in 2014 was a bit of a
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turning point in India, because that's when this government came in and Prime
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Minister Modi came in. And I think he totally changed the
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entire thinking around climate change in India and went from a defensive posture
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to a much more, I think, open, positive view on how to deal with climate change
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and to totally size the targets on renewables.
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And that's really what has allowed us to grow substantially.
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Coming up, some unseen reveals what he believes is the simplest thing the world
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could do to combat the climate crisis.
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The clean energy developer Renew has been recognised for its decarbonisation
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efforts and sustainable portfolio across solar, wind and hydro.
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Company founder Suman Sinha says progress is being made on the green
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transition, but a host of challenges remain across governments, corporations
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and the mindset of consumers. He tells me about the challenges facing
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his industry and how people often choose a cheaper option, even if it's the wrong
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thing for the planet.
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If I get started on climate change, I think there are so many issues that we
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still have to deal with that are not really getting addressed the way they
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should and which is. So first of all, you know, the entire
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process is you know, is talking about commitments by various countries.
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And those commitments at this point don't add up to the 1.5 degrees
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centigrade temperature change that all of us are trying to get to.
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In fact, I would say that 1.5 degrees is already well behind us.
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We now have to try to keep the temperature change down to two degrees
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or two and a half degrees. But currently, all the commitments of
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the world, if you add them all up, take us to between two and a half and three
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degrees centigrade temperature change. And these are just commitments.
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Action is at a whole different level, which is much, much weaker or better.
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So it is it is it is a lot lower than what people are committing right now.
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I don't think any country is really on track to meet their Paris commitments,
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on their on their NDCs. So, in fact, therefore, you know,
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commitments are not adequate. Action is even less adequate than that.
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And so we're actually falling behind quite substantially.
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And then you look at the corporate sector, you know, in the corporate
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sector and corporates, but we account for two thirds of carbon emissions
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globally. Some corporates are voluntarily doing
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what needs to be done. But most corporates with the, you know,
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are not doing what needs to be done. And there isn't a proper system globally
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that really measures how much carbon is being put out by anybody at this point
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in time. Right.
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And you can't measure it. There's not a problem.
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That's exactly that's the problem. Just like just like every food product
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specifies on its packaging that this is the amount of calories this part of the
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thing has or fat or whatever else. We need to have almost the same
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definition of carbon that this product that is used, whether is a service or
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actual product consumed or produced this much carbon.
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Right. And then we should all be able to, as
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consumers, be able to start moving towards a carbon free product.
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Why? What I mean, it seems like we're taking,
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if not a step back, certainly you say we're not going to meet the targets that
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we've set out. Is it distraction because of other
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global risks or is it just not the right kind of power because we don't have the
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technology or the carbon capture? I think fundamentally it's human nature.
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You know, people don't want to do things that cost them more, even though they
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might be the right things to do. And corporates are not set up in a way
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to do the right thing. They are, you know, set up to deliver
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more value to their shareholders. And so if you ask them to do something
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that costs more but does the right thing, most people are going to choose
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the thing that costs them less because, you know, ultimately it's our pocket
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that drives our lives. And so therefore, unless we start making
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the use of carbon more expensive and we start making transparent what different,
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you know, what different products are emitting in terms of carbon, until we
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start doing that, I don't really think that customers are going to be aware
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enough and corporates are going to be aware enough to really start moving
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carbon usage down. And one of the most simple things that
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the world needs to do, I tell you, I say simple, but it's actually one of the
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most complex things, is that we need to have a single price of carbon globally.
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And if you can say that for years, I know and it's a very complex thing to
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do, but the reality is that there isn't really enough sufficient political
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backing behind it. You know, nobody really wants to do it
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because they all know that it's going to make everything more expensive because
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right now we're just all used to using carbon and just putting it into the
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atmosphere. The moment start that starts getting
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costed and everybody's cost is going to go up and in the end of inflation and
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political disturbance and, and when everything you know politically is so
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finely balanced, nobody wants to be the person who takes that call.
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Unfortunately, there are many, many questions actually, what the energy
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complex looks like for renewables. There's, you know, many question marks
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about wind turbines that are not really working.
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Hydrogen, is it the brown kind? Is it actually, you know, the blue or
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the green kind? How do you see the energy complex and is
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it really different region from region? You know, right now, I think if you look
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at energy as a whole, 25% of energy carbon emissions comes from electricity
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for electricity. We know what the solution is.
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We need to really just decarbonize using clean energy.
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The technology is there. Nuclear?
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No, it's mostly wind and solar. It could be nuclear.
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Nuclear is a little bit more expensive, but it does give you that baseload
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power. So we know that we need to, you know,
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implement wind and solar at massive scale.
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Now, the reason we're not able to do that is because grids have not developed
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as fast as they should. Local permitting issues are not as
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clear. Supply chains are very concentrated, so
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we need diversification of supply chain. So there are quite a few issues that
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need to be addressed in a basically decarbonising the electricity part, but
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that's just 25% of carbon emissions. Then on top of that, you have the rest
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of the energy value chain, which is really to be addressed to things like
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green hydrogen and green ammonia. And we.
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Have to find different use cases. Keep the following in mind.
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We have a fossil fuel based economy that has been developed over the last 200
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years globally. Right?
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Everything in our lives is based on fossil fuels.
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Now we are trying to fundamentally reshape and retrain and change all of
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that. And that's going to require a massive,
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massive overhaul of all the products that we use, how we use them, you know,
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how our minds are wired. You know, today, a young person, a young
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you know, you know, 18 is going to think about
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getting on a motorcycle and and driving it hard or driving a driving a sports
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car, you know, which makes a lot of noise.
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You know, all of that has to change. There are cultural changes that need to
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happen. I guess there are so many questions
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about how you recycle, for example, solar panels, battery.
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Is that are these the wrong conversations?
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Because you hear that a lot by people who are not necessarily climate deniers,
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but just think it's the transition is too expensive and this is consumers on
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the street. Yeah, no, look, I think we have to to
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address this problem that we have to follow in all of the all of the above
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strategy. There's there's no there's no other way
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around it. We can't you know, if we just look at
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the amount of new minerals and metals we have to mine to make this transition
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happen. It's massive, right?
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And so if everything has to be mined from scratch, it's going to take too
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much effort. So therefore, recycling becomes an
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important part of that solution. So I think all of those are things that
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we absolutely need to do as well. And so we need new technologies.
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We need new recycling systems to be set up.
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You know, we need we need fast an infrastructure development on grids and
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so on. We need faster permitting.
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So there's a whole range of things that need to be addressed for this for this
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change to happen. Coming up, Suhasini tells me why success
[16:36]
as an entrepreneur is a lot harder than he thought.
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India's Clean Power producer Renew, listed on the Nasdaq in 2021, a key
[16:52]
milestone in the career of company founder Swansea.
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He tells me about his professional during the lessons he's learned by
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setting up a company and why the building of an organisation never stops.
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Was it harder being an entrepreneur than you thought it would be?
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It was a lot harder. And and the kind of
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things that you have to take responsibility for, you know, as a
[17:19]
profession, it's a little bit different. But here the buck stops with you in
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every different way. Right.
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And especially if it is capital or if you get listed, you know, you have many,
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many stakeholders to manage. And so there's a lot of complexity to
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deal with at any given point in time. And you know that if you don't drive
[17:37]
things forward, then perhaps they won't go as well as they might otherwise.
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And so therefore, that imposes a much higher degree of responsibility and
[17:45]
burden, which over the years becomes easier to deal with, I guess.
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But it's always there. And, you know, as running your own
[17:52]
company, that stress does not go away at any time.
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You know, you are you're sort of switched on 24 seven.
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And, you know, whether it's night or day or maybe on holiday or anything else
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really doesn't matter because, you know, you are at the beck and call of your
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business. Is that different because you're a
[18:07]
founder and so you're you're always looking around, you know, you always
[18:11]
have this image of founders as being, if not scrappy, always kind of like on the
[18:15]
go because it's their baby. That is true.
[18:18]
I that I think certainly is the issue. As a founder, you do have an extra sense
[18:23]
of responsibility. And I know at some point I'm going to
[18:26]
have to hand things over. And you want to be very careful about
[18:29]
when you do that, how you do that and so on.
[18:31]
But hopefully that's still some time away.
[18:34]
But I do agree with you that as a founder, you do think that it's your
[18:38]
baby and and therefore you do want to make sure that, you know, you look after
[18:44]
the baby in the right way. And until the baby gets to a level where
[18:46]
it can walk and move on its own. But, you know, as a parent, you never
[18:50]
think that your child is or enough to do that.
[18:52]
So I guess that happens. So what is the most valuable lesson that
[18:56]
you've learnt as an entrepreneur? That's a great question.
[19:01]
You know, if I think back, I would say that
[19:04]
the most important thing that I, you know, I sort of realized is that, you
[19:10]
know, where you get to is really an outcome of the effort that you put in.
[19:15]
And therefore, you have to constantly keep putting in the effort.
[19:18]
You know, the moment you take a step back, everything automatically slows
[19:22]
down a little bit. So you have to be switched on all the
[19:24]
time. You have to be pushing hard all the
[19:26]
time. And you cannot actually ever relax on
[19:29]
that front. I know you were talking about, you know,
[19:32]
execution now being the most important thing, how that, I imagine, means
[19:36]
building the team around you, the best team that you can find.
[19:39]
How do you do that? Yeah, I think, look, getting the right
[19:43]
people and keeping them engaged is one of the hardest challenges that you can
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face as a as a founder. And I've been fortunate that we've got a
[19:53]
really good team with us, a team that has been with me for quite, quite a long
[19:57]
time. And and that's made my life a little bit
[20:00]
easier. And it's also created a sense of
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camaraderie, which is so important because, you know, you spend all your
[20:05]
time with the people around you. So it's very important to have that.
[20:10]
But I think it's it's it's something that you have to think about every
[20:13]
single day as a as a leader of of a company, you know, And it's not just a
[20:18]
question of the people that you have. It's a question of the kinds of systems
[20:21]
you have to to keep them motivated and engaged, to evaluate the performance, to
[20:26]
give them feedback about how to improve, how to prevent attrition, especially in
[20:30]
a sector that is growing so rapidly where you are the incumbent in a sense.
[20:33]
So everybody wants to come and take your people away from you.
[20:36]
And so how do you prevent that from happening and yet keep the, you know,
[20:39]
keep the ship going to all of those are very important challenges.
[20:43]
And I think one of the very critical things is that a lot of young
[20:47]
entrepreneurs don't realise is that when you start as an entrepreneur, you're not
[20:52]
just building your business, which of course you are, but you also building
[20:55]
your organisation. And most people don't realise that.
[20:58]
And building an organisation is not just about hiring people, it's about the
[21:02]
culture, it's about the systems, the values, the mission.
[21:06]
You know, it's about how you operate, how you do things, how you retain
[21:09]
people, how you keep them motivated. So it's all of those things put together
[21:15]
and over time you realise that, you know, a lot of effort has to go into it
[21:20]
and then eventually you have an organisation that has a life of its own.
[21:24]
It's, you know, and it's, it's sometimes you look at it and you marvel and you
[21:28]
think about, you know, how was this created and was I the person that was
[21:32]
behind getting this thing done? And you're not obviously the only person
[21:36]
because there's so many other people along with you, but it's an entity by
[21:40]
itself. It's a it's an almost a living,
[21:42]
breathing, dynamic organisation. What's the hardest part in actually
[21:46]
looking at culture when you start out because you have a million things that
[21:49]
you're thinking about, or is it when the company becomes much bigger?
[21:52]
No, I think you have to put in culture that in the beginning I think it's very,
[21:55]
very important because, you know, as you as as more people come in, they all come
[22:01]
in with their different backgrounds and thought processes and you want to mould
[22:04]
them into the kind of. Vision you have for the organization and
[22:09]
the culture of the organization. You want things to be done in a certain
[22:13]
way. You want a certain level of operating
[22:18]
protocols within the organization. So all of those are things that you have
[22:21]
to put in place right in the beginning. But, you know, the building of the
[22:24]
organization is a constant endeavor. It never goes away.
[22:28]
And, you know, you're always saying, well, why don't I do this earlier?
[22:31]
You know, why did I am I doing this now? Why did I not do this five years ago?
[22:35]
So there's always these little things that you're discovering about how to
[22:38]
build the organization, the areas that you want to work on.
[22:40]
And all of that is really fascinating. And, you know, it's it's a that in
[22:44]
itself is a journey, actually. What's the best piece of advice you've
[22:47]
ever received? Oh, good question.
[22:52]
I think, you know, my wife gives me a lot of advice.
[22:54]
A lot of it is very useful. I think the best advice I've just got is
[22:59]
just to focus on what I'm doing and not to get distracted by what's happening
[23:03]
around you. Just to keep your head down and keep
[23:07]
just keep at it. Is that the same advice you give your
[23:09]
children? Good question.
[23:13]
I give them a lot of advice. I don't think that they necessarily take
[23:17]
it all the time as young people have wanted to do.
[23:21]
I think that, you know, my my advice to my kids is to find their own path.
[23:26]
I think that's the most important thing. They need to find their own direction.
[23:29]
They need to do things that excite them and motivate them.
[23:32]
And as a parent, the tendency always ends up, you know, being that you want
[23:37]
to direct them a little bit more than you that they want.
[23:40]
And so the best thing you can do as a parent is to just give them the right
[23:44]
foundations, the right sets of values, and then let them go.
[23:47]
And to have the confidence that you have done your job, which allows them then to
[23:51]
lead their own lives in the best possible bit.
[23:54]
So thank you so much for joining us on Leaders.
[23:56]
Thank you. Thank you so much.

Posted Nov 21st, 2024 sumant07