EESL Working to Bring Energy Efficient Tech for MSMEs On their E-marketplace: CEO Vishal Kapoor

A joint venture of Public Sector Undertakings under the Government of India's Ministry of Power, Energy Efficiency Services Ltd (EESL) took significant steps towards energy cooperation by signing several Memorandum of Understanding (MoUs) at the 3rd edition of the India Energy Week.

Among the MOUs, were partnerships with premier educational institutes of the country as well as cross border energy cooperation. In an exclusive interaction with Outlook Business, Vishal Kapoor, CEO at EESL talked about how these agreements will enhance India's energy efficiency goals. He also majorly highlighted their plans of making the micro, small and medium enterprises (MSMEs) of the country more energy efficient in terms of technology.

Q) How do you think will the MOUs align with the country’s broader energy efficiency goals?

A) One of the MOUs that has been signed, is with IIT Hyderabad with an aim to promote energy efficiency in the institute. In fact we are now trying to approach all the other IITs as they are institutions of prominence and thereby tying up with them on energy efficiency can bring forth some kind of legitimacy. Now, since they are highly technical institutions, they will only go in for energy efficiency measures after they are themselves very clear about its sustainability and efficacy.

Apart from that, we have also exchanged MOUs with two state governments. One of them is with Himachal Pradesh on the micro cold storages.

Powered by solar energy, micro cold storages are essentially cold storage units that are most efficient in the case of perishable, mainly agricultural produce. These can help farmers preserve fresh produce that is harvested at farmlands before being transported to the market. There is an estimated requirement of about 2,50,000 micro cold storages across the country, against which we have only 1,000.

So, we are looking at developing these kinds of projects in an energy efficient manner and the outcome of that will require data driven understanding. However, while doing this we must also look at its business case. Because, if micro cold storage is costing you Rs 10 to 15 lakh, how many days can it be used in a year? We already have bigger cold storages, they are fixed structures but the micro ones are a way by which you can containerize your produce, while enabling mobility.

Another MOU signed was with IMT-GT in promoting energy efficiency with South East Asian Nations. IMT-GT is basically Indonesia, Malaysia and Thailand. There is a group which is doing lot of work on greening cities in these three countries. Now, we have done a tripartite MOU along with the Asia Foundation and Green Growth Asia Foundation through which we will start sending some energy efficient appliances from India to Malaysia for their schools. Currently, 13 schools have been selected in the first part and we will try and put more energy efficiency measures there.

Q)  What is EESL doing in terms of energy efficiency for MSMEs?

A) For MSMEs, EESL has been doing working on 36 technologies, out of which around 23-24 have already been done. These technologies will benefit MSMEs in terms of becoming more energy-efficient, which is currently the need of the hour. In partnership with United Nations Industrial Development Organisation (UNIDO) and Small Industries Development Bank of India (SIDBI), we are also trying to set up a fund which can finance these particular technologies.

We are looking at putting those things on our e-marketplace. Currently, we have an e-commerce platform and we are trying to expand it to a ‘marketplace’ which will start having a lot of energy efficiency products. Additionally, we will also try and look at some financing mechanism that can be operated through this e-marketplace.

Q) What have been some of the key lessons that you have learnt from previous energy efficiency programs?

A) The issue with energy efficiency is that it acts behind the scenes. So, if the lighting of this room can be done in a total of 60 watts, it can be done in 50 watts also, but sitting here we would not know about that.

Energy efficiency as a whole is not visible, thereby once its narrative starts building up in premier institutions like IITs, it can be expected to be adopted more widely. If the world has to move towards net zero, probably 40 percent interventions will come from energy efficiency.

Additionally, energy efficiency is a little bit different because the individual is not selling electrons, like it is in the case of renewables. In the energy efficiency sector, there are about four or five parameters and thereby, these kinds of projects are slightly more difficult to do and more challenging to operate in a project investment mode.

So, how does the investment get secured? That is one big challenge. I would also say that one very important thing that needs to come in is energy efficiency project insurance. This is because if there is insurance, the client is also happy. I think once insurance companies start coming in and getting familiar with this kind of a business, it will start working out. I think we are the world's largest energy service company (ESCO) but at the same time, it is true that ESCO business has traditionally been unable to scale up in a big way.

So, I think in terms of investment recovery, seen not only in India but also in the case of a couple of projects done abroad, similar kind of problems emerge. Even when we speak to our international counterparts, we see this kind of a problem. It is more complicated than renewables.

Q) What is your take on enabling investment into this sector and how can government and private enterprises work here?

A) Yes, enabling investments is required but if you look at a market, it will naturally run and rush towards areas where there is a clear cut understanding of return on the investment. Wherever we talk about the need to get investments, it simply means that it is the second statement. The first statement which is actually silent is a clear cut admission that there is a problem, money is not coming. That means that either there is a problem in the business model or probably it is more complicated, or probably there is an information asymmetry, people don't understand or maybe there are not enough buyers or sellers.