Private-sector energy RD&D landscape

2 To estimate fossil fuel energy RD&D activities, 2018 values from the MoC (INR 8 crores) and the MoPNG (INR 1 252 crores) are combined, excluding INR 34.2 crores already published under clean energy RD&D. Extra fossil fuel RD&D budgets from other ministries (e.g. the MoP) may increase these preliminary estimates (see Table 11.1).

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are likely to strengthen these capabilities. In addition, relative to some emerging and developing economies, India’s legal framework, including for intellectual property, is well established.

For these reasons, there are encouraging examples of international energy companies opening research institutes in the country, such as Shell’s centre in Bangalore, alongside its two other research centres in Amsterdam and Houston. In some instances, strategic policy making may also provide the appropriate incentives for private-sector involvement, such as the 2017 public procurement of 10 000 EVs to replace the government fleet of conventional fuel cars, which was awarded to Tata Motors and Mahindra Electric. Such “pull” factors stimulate the broader technology innovation ecosystem in the field of electric mobility: batteries, charging infrastructure, etc. Other initiatives, such as public-led StartUp India or public–private partnership Global Innovation Technology Alliance, illustrate the government’s commitment to stimulating domestic technology innovation.

Early-stage venture capital investments, as well as other corporate investments in RD&D activities, indicate the technology areas in which the private sector has decided to invest most when it comes to start-up companies. While activity remains limited in India, more early-stage venture capital activity (seed, series A, series B) was seen there in 2018 than since the 2012 “clean technology bust” (Figure 6.2). Most of this investment was in solar, and some in EVs, providing evidence that investors are bullish about the policy and market environment for these technologies in the near to medium term.

The IEA has identified USD 418 million of R&D spending reported publicly by Indian companies active in energy technologies in 2018. Further, Indian car makers spent around USD 900 million on R&D, a significant share of which was directed to more efficient and alternative fuel vehicle technologies.

Figure 6.2 Early-stage venture capital investment in energy technology

USD (2018) million

Source: Cleantech Group (2018), i3 Database, https://www.cleantech.com/i3/.

In 2018, DBT and its PSU, BIRAC, partnered with Tata Trusts to establish the CEIIC near New Delhi. It offers lab-to-market incubation support for clean energy entrepreneurs from MI countries. With a total initial investment of about USD 5 million, the incubator will promote innovation in clean energy by providing facilities and infrastructure, training and mentorship, shared consultancy services, intellectual property-related services, live test beds, seed support, exchange programmes and collaborations, and market linkages to innovators across the MI countries to test their technologies in local markets. The centre may also support end-use deployment of successful innovations. To date, selected start-

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6. ENERGY TECHNOLOGY INNOVATION

ups are working on EV charging equipment and charging stations, solar-powered efficient machines for agriculture, biomass conversion equipment, innovative battery technologies, smart meters and data analytics platforms, zero-emissions turbine-based energy storage and power generation engines (Tata Trusts and Social Alpha, 2019).

However, private actor uptake of RD&D activities remains low in India relative to most countries. The concept of “frugal innovation” – a term applied to ingenious inventions that meet core user requirements without the backing of major corporate RD&D budgets or high levels of consumer finance – has found application in the energy sector, including via the use of novel information and communications technologies.

Box 6.1 Case-study • Public–private innovation partnership in advanced biofuels

India is positioned as a global pioneer in bioenergy innovation. It is co-leader of MI’s challenge on sustainable biofuels, with a co-ordinating MI unit under DBT, and is also a member of the IEA Bioenergy TCP.

Developing sustainable biofuels aligns with India’s broader national policy goals. In 2018 the government updated its National Policy on Biofuels to reduce oil imports, foster rural development and bring environmental benefits. It reaffirmed the need for bioenergy research such as the development of advanced biofuels from non-food crop feedstock. DBT and the MoPNG co-ordinate RD&D initiatives such as the DBT-IOCL Advanced Bioenergy Research Centre, near New Delhi.

Indian Oil Corporation Limited (IOCL) is a vertically integrated petroleum PSU under the MoPNG, and is among the country’s largest and most profitable corporations. Since 2012 the DBT-IOC Centre has conducted research on lignocellulosic ethanol (a biofuel produced from non-food crop biomass, such as residues from cotton, wheat, rice or sugarcane), on issues related to pre-treatment, integration and scale-up. In 2013 a 250 kg/day cellulosic ethanol pilot plant was built with support from US National Renewable Energy Laboratory. The DBT-IOC Centre designed new enzyme production processes for biofuels development, achieving cost savings up to 50%. The centre also discovered the so-called simultaneous saccharification and co-fermentation (SSCF) technique, which reduces process time.

The DBT-IOC Centre recently began the construction of a 10 tonne/day biofuel production facility, co-located with IOCL’s Mathura Refinery. The INR 1.10 billion (USD 16 million) project is expected to start operations by the end of 2019, a final demonstration step before commercial-scale production. IOCL and other petroleum PSUs are also building 12 bio-refineries using agricultural residue and municipal solid waste, for INR 100 billion (USD 1.5 billion). In 2018 Bharat Petroleum launched the construction of a rice straw feedstock-based bio-refinery in Odisha, with operations to start by December 2020.

The DBT-IOC Centre is one of five DBT joint centres of excellence specialising in biorefining. The five centres mobilise a significant proportion of overall public investment

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