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Saurabh Kumar, Managing Director, EESL, Energy Efficiency Services Limited (EESL)

14 Dec 2017

In an attempt to keep Infraline Energys’ readers abreast with the key issues and challenges engulfing the sector, Infraline Energy tries to bring forth the opinion of key personnel whose decisions and opinion play a vital role in shaping the sector. Please find below excerpts from the interview that Infraline Energy conducted:

As the Indian economy shifts towards low-carbon path, Energy Efficiency Services Ltd’s(EESL) role gets bigger. The company was set up to distribute energy-efficient LED bulbs across the country through power utilities. However, its business is no longer limited to India – it has forayed into the UK and looking for new markets as part of its global expansion plans. Back home, it has added news products like energy efficient fans and air-conditioners into its basket and more recently, ordered for 10 lakh electric vehicles for distribution to government employees. EESL managing director, Saurabh Kumar, discusses his company’s business plans with InfralinePlus. Excerpts:

EESL’s business is growing like anything. Where do you see the company five years down the line?

Supported by the innovative business model, EESL has achieved tremendous growth within a couple of years. The turnover of the company has grown from Rs5 crores in 2012-13 to Rs1,223 crores in 2016-17 and is expected to reach Rs3,518 crores by March 2018. By 2020, EESL seeks to be a $1.5 billion (Rs 10,000 crore) company putting together all the programmes of EESL - UJALA, SLNP, Buildings, Solar rooftops, Mini solar plants in Maharashtra, acquisitions in UK, Smart Metres and E-vehicles.

Do you only want to buy and sell energy-efficient devices and electric vehicles or finally start manufacturing yourself?

EESL is essentially a Super-Energy Service Company (ESCO) which enables consumers, industries, governments effectively manage their energy needs through efficient technologies. EESL is currently implementing the world’s largest non-subsidised energy efficiency portfolio across lighting, buildings, agriculture, etc, at a scale that no organisation has been able to achieve. EESL is driven by the objective of enabling more – more efficiency, more innovation, more excellence toward enabling rapid adoption of these transformative solutions and bringing new technologies in the market.

EESL’s current focus is on providing affordable solutions to consumers with its no-subsidy, no capex and the Pay-As-You-Save model, which obviates the need for any upfront capital investment in any intervention that lead to reduction in energy consumption or enhance operational efficiency. The programmes are win-win situations for the Government and consumers as these help achieve development goals and policies. The no-subsidy approach ensures that the programmes are self-sustaining without any grant from government or any other entity. EESL’s primary focus is on market transformation and making energy efficient products affordable and accessible to the common man.In line with this, EESL does not have any plans to enter into manufacturing of energy efficient appliances.

You are already selling LED bulbs in the UK. What is the latest move in your overseas expansion plan?

EESL has set up office in UK and has started operations with the current turnover of £1 m. The EESL board has approved a business plan of £150 m over the next two years and the turnover from UK operations next FY will be over £100 m. Further, a pipeline of 40 m LEDs has been identified in UK. The UJALA scheme was also launched in the state of Melaka in Malaysia on September 6, 2017. Orders of 2 crore LED bulbs have been received from Nepal and similar orders are being finalised in Thailand and Vietnam. Further, EESL has signed an agreement at Bangkok with Global Green Growth Institute (GGGI), Korea for a $125,000 consultancy project on energy efficiency improvements in Thailand Auto Manufacturing sector. The project will open EESL’s investment opportunities in SME sector in Thailand. EESL has signed an agreement with the Kingdom of Saudi Arabia to boost the country’s energy efficiency measures. One EESL officer is currently posted in Riyadh for helping the country set up an organization like EESL.

EESL has further expanded its business in battery storage wherein EPAL, a joint venture between EESL and UK-based EnergyPro Limited (EP), partnered with a leading battery storage solutions provider Leclanché, starting with the investment of US $12 million in a previously announced and nearly completed advanced battery storage project in Ontario, Canada, known as Basin 1 and 2.

The high-quality project, built and owned by Leclanché and development partner Deltro Energy, is the first utility scale energy storage facility designed to balance the Ontario power grid, with a total investment of approximately US $25 million. The battery storage project will provide services to the Independent Energy Systems Operator (IESO) that oversees and manages the power grid of the province of Ontario, and is interconnected to Toronto Hydro, the largest municipal electricity distribution company in Canada. The partnership has strategic importance from India’s perspective as its government has set a target of achieving 175GW of renewable energy by the year 2022, equivalent to 40 per cent of the country’s energy supply, up from 12 per cent now.

This was a part of India’s commitment during COP21. To achieve this target, India’s energy supply will be dependent on intermittent power sources and ancillary services will be required to stabilise the grid. Battery storage will help achieve stabilisation, supply power to charging stations and reduce the substantial Unscheduled Interchange (UI) charges payable by the country’s utilities and states (around $461.5 million annually).

You have placed a big order for supply of electric vehicles. When you expect the delivery to start?

The delivery of 400 e-vehicles will start from November 30, 2017 and we expect to complete the first phase by end of December 2017. The second phase of the delivery will start from March-April 2018.

Do you plan to order more electric vehicles?

The next order is likely to take place in April 2018 when the first order will be completed by December 2017.

Do you have any plan to popularise electric vehicles outside government sector?

As of now EESL is focusing on replacement of existing petrol and diesel cars run by Central Government ministries and departments, which are for captive use and the charging stations will be put by NTPC. Despite various initiatives, adoption of Electric Vehicles has not taken place owing to factors including low demand and high financial risks for the industry investment on one hand and the high cost of ownership for consumers on the other hand. Some of the other barriers include lack of awareness of benefits of adoption of electric vehicles, and less availability of products in market. At the same time, factors like range anxiety (absence of charging infrastructure) lead to consumers being apprehensive about the distance the vehicles can cover in a single charge, which results in lack of adoption.

EESL’s approach to introduce e-vehicles will give a big push towards addressing these hurdles. The rapid change in market dynamics facilitates the growth of the ancillary support system which leads to development of the entire ecosystem. Demand aggregation will lead to scaling up of manufacturing of the entire value chain – cars to batteries – manufacturing to after-sales service, which will ensure the cost reduction of the final product. This will be a huge boost to e-mobility, and consumers will be encouraged to buy them because of the huge benefits and probable reduction in prices. Simultaneously, government is working towards strengthening the policy scenario that will ease out any regulatory hurdles.

What is the status of your plan to sell air-conditioners?

To accelerate the introduction of super-efficient air conditioners and to meet the challenge of increasing electricity demand from ACs sustainably and reduce GHG emissions, 1 lakh ACs superior to the most efficient technology (>ISEER 5.0) available presently in Indian market have been procured by EESL through an open competitive bidding process earlier this year. Currently, the Super Energy Efficient ACs are being made available to institutional buyers as part of the existing Buildings Energy Efficiency Programme (BEEP).

Infraline Energy would like to thank the contributor for his/her valuable time and opinion shared on the topic.