Top Voice: Vikas Bansal
As part of our quarterly Top Voices interview series, we've been scouring the globe for the world's leading energy, infrastructure and sustainable finance professionals. We're keen to bring our audience a quick take on recent developments in the sector and a refreshing spin on the ins and outs of sustainable finance and investment.
Today, we will be speaking with Vikas Bansal, a senior professional in Dubai with Sterling and Wilson Solar who are one of the largest solar EPC solutions providers globally and also a leading solar O&M player. Currently an Executive MBA candidate at London Business School, Vikas talks candidly with us about the prospects for growth in renewable energy and the current state of sustainable investment in the UAE region.
Q: How have you been keeping during the lockdown period, what have you been up to?
Vikas: At a personal level, the lockdown has allowed me to connect deeper with my inner self and my family. The lockdown lowered the guards for many people, including me, resulting in reduced resistance levels.
For a long time, I had a desire to inculcate Yoga and mindfulness practice into my daily life. The 'new normal' gave me the chance to fulfil this desire.
Professionally, the lockdown provided me with the opportunity and mind space to reflect deeply and forge strategies to stay at the top of our game. It also gave me the bandwidth to connect deeper with many colleagues, some of whom were going through a rough patch in their personal lives.
Q: Tell us a bit about yourself and your trajectory towards a high-impact career and what brought you to this specific sector. Where do you draw your inspiration from?
Vikas: I have been working in the clean energy sector for the last decade, largely focusing on market entry, technology and business acquisition. During this period, I have been part of Sterling and Wilson Solar's inspiring journey of becoming one of the largest solar EPC solution providers globally, with a portfolio of over 9 GW, and going public in 2019.
A decade ago, before joining the Sterling and Wilson group, as a part of the Strategy team of a large company, I got an opportunity to visit a large renewable energy exhibition. By the end of the exhibition, I was inspired to pursue a career in alternate energy. I was confident that the industry would soon occupy a mainstream position.
I believe that the energy space is going through an extraordinary transition. It is making a fast-track global contribution towards a greener future, thereby boosting efforts of minimising the impact of global warming. I am proud to be making a meaningful contribution in this endeavour.
Q: As a senior professional in industry, what would you say attracts the largest infrastructure funds to specific projects in the low carbon space?
Vikas: There are 3 fundamental trends which are pushing large funds to invest in the low carbon space:
- In almost all parts of the world, renewables are now the cheapest form of energy. They are cheaper than Gas by a large margin and are at par, even cheaper than Coal, in some regions.
- The world has seen through the smokescreen created by the traditional energy players for decades. The belief that a low carbon approach is the only way to survive has been embraced by everyone, including the large infrastructure funds.
- The development of technologies to store energy in an economical manner has instilled hope that low carbon future, despite seeming distant currently, is feasible for sure.
About the Top Voices in Sustainability Series
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How does the interview series operate? Essentially, each and every quarter, we will publish an interview with one of the world's most influential professionals and place the interview on our website and weekly newsletter. The theme of the interview series is "sustainability in the energy sector".
"I believe that the energy space is going through an extraordinary transition. It is making a fast-track global contribution towards a greener future, thereby boosting efforts of minimising the impact of global warming. I am proud to be making a meaningful contribution in this endeavour." - Vikas Bansal
Q: What do investors in The Region tend to look for in the perfect infrastructure project?
Vikas: Apart from a macro analysis of the economy and credit rating of the country, investors analyse the present state of energy mix and anticipated growth. Government vision and policies around a shift from high to low carbon future, coupled with growth projections, are also important decision factors.
If the region has sufficient grid capacity and solar/wind resources, it can easily become a sought-after destination of low carbon energy projects.
Q: What challenges would you say are being addressed with new equity and/or debt in The UAE and to what degree is the return on investment attractive to investors?
Vikas: For the last five years, the UAE has been dominated by Japanese, French and Saudi Arabian independent power producers. This is despite the strong push by Oil and Gas companies to win renewable power projects in the country. We have seen record low tariffs in UAE, which has given impetus to the growth of a low carbon future in the country.
However due to intense competition, UAE has seen dwindling number of players participating in the energy auctions, which is not an ideal scenario for the country in the long-term.
Q: How would you say the industry have coped with the adjustment to the broad scope of sustainability frameworks such as Environmental Social & Governance (ESG) investing?
Vikas: The energy sector experienced tremendous upheaval in 2019 owing to the value shift from traditional fossil fuel-based players to low carbon energy producers. The traditional independent power producers that had dominated the power sector for decades felt threatened when traditional Oil & Gas players with deep pockets started focusing on low carbon energy.
At a macro level, these pulls, and pressures are good for the expansion of the low carbon industry that needs players with expertise and deep pockets to transition towards a greener future.
Q: On the UN Principles of Responsible Investment. What impact do you believe this has had on the adoption of ESG?
Vikas: The United Nations has been working as an apex body to bring about a change in the energy consumption patterns of the world. Changing the way 7.5 billion people live is a mammoth task, and the transformation will take decades.
I am glad to see that in the last two to three years, the balance has tipped in favour of responsible investment. Large funds like Blackstone have integrated ESG into every investment decision they make. Many financial institutions like EIB and Rabobank have already stopped funding coal/gas projects.
Q: In terms of climate finance, in your opinion, would you say your sector is gravitating towards or away from financing in greener initiatives and how sustainable are these approaches - and to what effect are their value?
Vikas: If one looks at the vision statement of leading oil companies like Shell, Total and BP in 2019, it can be said without an iota of doubt that the sector is gravitating towards green initiatives. Since all these initiatives are economically viable and do not need any subsidy, they are sustainable and will stay here for a long time.
Q: How much influence have the SDGs been in guiding new investment into the UAE?
Vikas: With grand vision backed by long-term policies, UAE has demonstrated clear leadership on turning SDGs into reality by integrating these goals into its National agenda. Currently, it ranks 65 on the SDG Index and is well-poised to improve its ranking in the coming years.
The UAE has a vision of increasing the share of renewable energy to 50% in its overall energy mix. With the 1,177 MW solar project in Al-Ain, one of the largest in the world, already connect to grid and another project of around 2,000 MW expected to come online by 2022, the UAE has already turned goals into on-ground reality, inspiring other countries in the region to follow suit.
Q: What will the next 5 years hold in store for Low Carbon forms of Energy?
Vikas: As renewable energy becomes mainstream, the next five years are going be exciting. In addition to vanilla PPA, we will witness an evolution of new business models, leading to further penetration of low carbon generation sources into the grid. Some of these models will be around 'Time of Day PPA', 'Round the Clock energy supply' and 'Capacity PPA'.
Thank you to everyone who made this interview possible. For more interviews in this series, follow us on Twitter @ibrgroupintl or connect with us on LinkedIn.