The future of economic growth runs on electricity

For most of the industrial era, electricity was treated as an input cost — significant, but rarely the deciding factor in where a plant was built. That has changed. Reliable, affordable, low-carbon power is becoming a location decision in its own right, shaping manufacturing, AI infrastructure and industrial investment.

The reason is partly the scale of new electricity-intensive demand: semiconductor fabrication, data centres, electrolysers, electrified process heat. It is partly disclosure and procurement pressure, which puts a price on the carbon intensity of supply. And it is partly the fact that in a decarbonising economy, almost every efficiency improvement routes through electricity.

What this asks of India

India enters this competition with real advantages: abundant solar resource, a large and growing domestic market, and a policy framework that has sustained renewable investment across political cycles. The constraints are on the delivery side — transmission, storage, and the flexibility to serve demand at the hours it occurs.

A country that can offer industrial customers clean power at predictable cost and high availability attracts the investment. One that offers cheap generation but unreliable delivery does not, regardless of how much capacity appears in the statistics.

Growth strategy, not environmental programme

Framed this way, the energy transition is an economic growth strategy that happens to reduce emissions, rather than an environmental programme carrying an economic cost. That framing changes which projects get prioritised: firm, deliverable clean power beats headline capacity, and grid investment competes on equal terms with generation investment.

Originally published in The Tribune. Read the full piece at the source.

More on this theme in Ratul Puri on India's energy transition, or read about his role as Chairman of Hindustan Power.