UPI has changed how India transacts, but a similar transformation could be coming to how the country deals with energy.
Infosys co-founder and architect of Aadhaar, Nandan Nilekani, has offered a compelling vision for the future of energy, drawing parallels with the revolutionary impact of the Unified Payments Interface (UPI). He suggested that the next big disruption will be in the energy sector, envisioning a decentralized and democratized energy marketplace.
“The next UPI is energy,” Nilekani said. “Now we are used to buying energy in small amounts. People buy some coal and use it every day. When you buy an LPG cylinder, you’re buying packetized energy. But we have always thought of electricity as something coming from the grid, or we buy a generator because we don’t get electricity, and you know, burn some oil.”
He continued, painting a picture of a future powered by distributed generation: “But the future is going to be going to millions of small producers of energy. Every home will be an energy producer because they have rooftop solar. Every home will be an energy store because they have an EV battery. So every home is a producer of energy, seller of energy, and buyer of energy. And these sales may not be with the grid, they may be with their neighbor.”
Nilekani then brought the analogy full circle: “So (people will be able to) buy and sell energy like UPI. That means you want to create millions of energy entrepreneurs who will universally be producing small amounts of energy and selling it to each other. So, the whole energy sector is going to be a huge thing which will create its own set of entrepreneurs.”
Nilekani’s vision suggests a future where individuals can seamlessly trade energy, much like they transfer money through UPI. India is already pushing heavily on rooftop solar with subsidies through the government’s PM Surya Ghar Yojna. Once many houses are able to generate electricity, Nilekani envisions a future in which they’ll be able to buy and sell energy from each other through a UPI-like mechanism — people who have surplus energy will be able to sell it, peer-to-peer, to people who might need more energy. People who’re able to regularly generate more energy than they consume could turn energy entrepreneurs, and make money selling power.
All this could be particularly more crucial with the advent of AI. AI uses up tremendous amounts of energy — a single ChatGPT query uses ten times more energy than a Google search. AI could end up impacting all areas of our life, with jobs ranging from coding to medicine to law all needing copious amounts of AI. This could cause energy demand to spike, which could end up being met with rooftop solar and through transactions through a UPI-like mechanism. It remains to be seen if the UPI moment for energy does end up materializing, but if it does, it could transform the energy sector as it had done with payments in India.