The exponential growth in electricity consumption signals not only a thriving economy but also an extensive electrification effort. Industry projections indicate that per capita consumption could increase tenfold by 2047
The Indian electrical industry stands as a pivotal force within the global market, reflecting its stature as the third-largest producer and consumer of electricity worldwide. With an installed power capacity exceeding 440 GW as of March 2024 and an additional 350 GW in the pipeline by 2030, the industry is poised for an unprecedented transformation. As India surges ahead with a 9.5 percent increase in electricity consumption in FY23, reaching 1,503.65 billion units, the implications of sustainable procurement practices become ever more significant.
The exponential growth in electricity consumption signals not only a thriving economy but also an extensive electrification effort. Industry projections indicate that per capita consumption could increase tenfold by 2047. Such growth mandates a reassessment of procurement strategies, focusing on sustainability, to ensure that this expansion is both environmentally and economically viable.
Sustainable procurement, often referred to as green procurement, is rapidly becoming a significant focus in the modern business landscape. With the increasing interconnectivity of the global economy, organisations are increasingly recognising the importance of integrating sustainable practices into their supply chains.
The concept of sustainable procurement is not new, but its application in the Indian electrical industry is gaining momentum. Traditionally, procurement decisions were driven primarily by cost considerations, often overlooking the long-term environmental and social consequences. However, the current global push towards sustainability, coupled with stringent regulatory frameworks and heightened consumer awareness, is compelling companies to rethink their procurement strategies.
Sustainable procurement involves the sourcing of goods and services in a manner that achieves value for money on a whole-life basis, considering benefits not only to the organisation but also to society and the economy, while minimising damage to the environment. For the Indian electrical industry, this means prioritising energy-efficient technologies, renewable energy sources, and materials with lower environmental footprints.
Moreover, adopting sustainable practices can bolster economic growth and job creation. The industry's ambitious goal to more than double its global export share by 2047 hinges on its ability to innovate sustainably. This shift not only enhances competitiveness in international markets but also fosters a skilled workforce, with the sector currently supporting over 2 million jobs, primarily in the capital goods segment.
Realising the full potential of sustainable procurement requires a concerted effort from industry stakeholders, policymakers, and consumers alike. Integrating sustainability metrics into procurement criteria, fostering innovation through research and development, and promoting transparency across the supply chain are essential steps towards a greener, more resilient electrical industry.
As India charts its course towards achieving a tenfold increase in per capita electricity consumption by 2047, the adoption of sustainable procurement practices emerges as a linchpin in its journey. By embracing sustainability as a core business strategy, the Indian electrical industry not only secures its future growth but also sets a global benchmark for responsible development. With bold investments and collaborative efforts, India can indeed lead a path towards a sustainable energy future, powered by innovation, efficiency, and inclusive growth.
In essence, sustainable procurement isn't just about compliance; it's about catalysing a transformative shift towards a brighter, more sustainable future for generations to come.
(Sunil Singhvi- President (Elect)- IEEMA.)