Aerial view of a night market in Delhi, India.

A New Space Race in India

From bold intent to giant transitions

A worldwide race to decarbonize is on, and each country’s performance relies on policy, ingenuity, and smart infrastructure. What does the race look like in India?

In November 2021, Indian Prime Minister, Narendra Modi, announced the nation’s first ever net zero target at the COP26 summit in Glasgow.


India’s goal is to become carbon neutral by 2070, a task that will involve transforming much of the country’s energy infrastructure and built environment.

 

It has been estimated that India will need to invest $10 trillion to reach its target, with the bulk of the funds needed to scale up renewable energy generation and integration.

 

India already has significant momentum in this regard, particularly with solar power which has increased 11-fold over the past five years.

 

“The fight against climate change is underway in India,” says Robert Demann, Head of Smart Infrastructure for South Asia at Siemens in India, “But the effects of climate change are also already becoming visible, highlighting the urgency of this transition. India has its own share of challenges pertaining to growing industrialization and urbanization, and it will become the world’s third-biggest energy consumer by 2030. This makes it a large-scale challenge, but also one that can have significant positive impact on the planet.”

Kid on a kickboard between smart buildings

What is the New Space Race?

A New Space Race is a Siemens Smart Infrastructure thought leadership study about how infrastructure stakeholders view the immediate and longer-term future of our built environment and energy systems.

 

It is based on a survey of 501 senior infrastructure stakeholders from 10 countries as well as in-depth interviews and desk research. The research covered mainly commercial real estate (e.g. office towers, campuses, hospitals, data centers, or factories), public sector assets (e.g. community centers, transport hubs, education assets, or healthcare infrastructure), and energy assets (e.g. electricity grids, gas networks, wind farms, etc). Respondents were involved in infrastructure as owners, developers, or operators.

The fight against climate change is underway in India
Robert Demann, Head of Smart Infrastructure for South Asia at Siemens in India

Infrastructure development invariably involves balancing competing priorities, while maximizing available funds, and accepting some compromises. These trade-offs are challenging in any country, but perhaps no more so than in India.

 

For example, among respondents from India in our survey, cost effectiveness stands out as the most important priority for future infrastructure investments and/or projects. This makes sense for a country that must spread budgets thinly across a large number of urgent infrastructure projects.

 

While it has a similarly large population, China has five times the GDP per capita of India, and many developed countries have 20 to 30 times as much. This makes it imperative that infrastructure investments deliver as much benefit as possible for the cost. 

 

Despite this, it is still a concern that carbon emissions and sustainability are ranked last in a range of priorities for the future of infrastructure among India respondents, significantly lower than the all-country average.   

 

However, now that India has stronger climate targets in place, it is likely that related priorities will rise rapidly in importance. Indeed, India respondents are optimistic about their sustainability targets, with 78% believing their organization will become a net zero contributor to global carbon emissions in, or before, 2025. This is above the average for all countries in the survey (66%).

Cities are now trying to become more human-centric, to improve quality of life, and to drive sustainability objectives.
Robert Demann

“While it is heartening to see this confidence, we should remain cautiously optimistic at this stage,” says Robert Demann. “Most industries are still focused on basic carbon reduction measures, and not many organizations can accurately monitor data on their sustainability targets, and then use this to continuously improve. While companies have made bold statements of intent, the challenge remains to translate these visions into achievable plans and to then implement them effectively.”

 

Like all countries, India must work to increase energy efficiency at the same time as it drives the energy transition and the decarbonization of industries. Most of the India respondents we surveyed (88%) believe that more attention and investment should be given to improvements in energy efficiency and demand side management.

 

Buildings are a key part of this, and this demands a focus on the entire lifecycle, including design, construction and operation. New digital technologies will be crucial to this, particularly those that enable more data-driven strategies. However, at present, India respondents strongly believe that the digitalization of buildings and power networks is lagging the progress of digitalization in most other industries (74% compared to the average of 63%). Like many things, this is likely to change rapidly as India accelerates progress towards its net zero goals.

 

“In many parts of the private sector, competitive forces have driven business efficiencies and innovation, but the infrastructure sector, largely driven by the public sector, has historically been designed to fulfil minimum requirements,” says Robert Demann. “Today’s infrastructure assets have low levels of connectivity and operate in silos. But cities are now trying to become more human-centric, to improve quality of life, and to drive sustainability objectives. To do this they increasingly compete to attract talent and investment, and this is leading to a new era of progress in the digitalization of buildings and energy assets.” 

Top 5 factors influencing future infrastructure development in India

Infrastructure stakeholders in India say these are the most important factors influencing future building and energy infrastructure projects.

Decarbonization perspectives from infrastructure stakeholders in India

Biggest impact technologies over the next five years

India’s energy and building industry leaders rated these areas the most impactful on infrastructure development over the next five years.

We would like to extend a special thank you to the diverse set of industry leaders and experts who shared their ideas and insights with us as part of this study.

This thought leadership study is based on a survey, in-depth interviews and desk research. It is not an academic or scientific research paper. Our goal is not to provide any final answers, but rather to start conversations, stimulate thought, and encourage infrastructure stakeholders to reflect on what today’s megatrends mean for the future of our energy system and built environment.

 

The survey included 501 respondents from 10 countries. The countries involved include those large-scale and/or highly advanced infrastructure assets and ambitions. It was fielded in June and July 2021.

Country                                                                                       
 

USA

20%

UK

16%

China

12%

France

12%

India

10%

Germany

8%

UAE

8%

Singapore

6%

Austria

4%

Sweden

4%

Primary role

 

Leadership, management, strategy

24%

Operations and maintenance

15%

Architecture and design

12%

Information technology, cybersecurity, software development

12%

Engineering or construction specialist

10%

Financial management or investment professional

5%

Sales, marketing, PR

5%

Data science, analytics, AI

4%

Consultant (e.g. management, sustainability, technology)

4%

Risk management, legal or regulatory compliance

3%

Property development

3%

Sustainability and/or efficiency specialist

2%

Industry

 

Architects, developers, construction, engineering

18%

Heavy industry and manufacturing

14%

Retail, hospitality, corporate, residential

12%

Public sector and education

12%

Energy (generation, transmission, distribution)

11%

Light industry (Food/beverage, data centers, transport)

10%

Healthcare and pharma

8%

Property/facility management

8%

Investors (trusts, funds, etc)

6%

Organization size                                                                  

 

50 - 249 employees

20%

250 - 499 employees

20%

500 - 999 employees

25%

1000 - 4999 employees

20%

5000+ employees

15%

Seniority

 

C-suite executive (or equivalent)

32%

I report directly to a C-suite executive

38%

My boss / manager reports directly to a C-suite executive

30%