Cleantech Startups – Dutch Uncles

How Greenko Became the Headliner of India’s Cleantech Narrative

Ananya Kedia — Thu, 27 May 2021 11:35:05 +0000

Back in the late 20th century when global warming was not as big a threat as it is today, India was among the first nations to incorporate a separate ministry for renewable energy and set up an ambitious target. Soon after the formulation of the idea to shift towards renewables, India became the hotspot for clean technology. Many companies came forward to shoulder this responsibility and provide for a change, but only a few cleared the required mark and made their stance in the business world. Greenko was one of them.

Within a few years of its incorporation, Greenko emerged at the forefront as an Independent Power Producer (IPP) and has sustained its position to date as India’s leading renewable energy company, having an extensive portfolio in design, construction and operation of clean energy plants.

Achieving the First Gigawatt

Greenko Energy Holdings, the parent company of Greenko Group, was incorporated in Mauritius in 2004 by the ‘power’ duo – Anil Chalamalasetty and Mahesh Kolli. The company was listed on the London Stock Exchange (LSE) and raised with start-up capital through an initial public offering.

Before co-founding the company, Chalamalasetty had involved himself in evolving start-ups in information technology, infrastructure and environment sectors based out in the UK and India. On the other hand, Kolli, a humble mechanical engineer from Karnataka, worked as a consultant for over 13 years before taking an entrepreneurial plunge.

Since the beginning, the duo had an inclination towards clean energy and technology. They shared a common interest in providing environment-related solutions using advanced technology. While Chalamalasetty created strategic business plans for the company, Kolli introduced new project initiatives for regular business development.

The company was founded with an aim to accelerate the procurement of affordable and clean energy sources and hence take advantage of the opportunities for consolidation of the Indian renewable energy market.

Greenko started out with Biomass and Hydroelectricity generation and commenced its first operation in January 2006, gathering its initial fundraising to acquire two biomass plants and a 50% interest in a third. From there, the company strategised and divided its model into phases, achieving one phase target at a time. The majority of the company projects and sites were predominantly based in the central and southern states of Andhra Pradesh and Karnataka.

It was a simple formula – ‘Generate power from agro-waste for the grid (Government)’. The company used to buy low-cost agro-waste from local farming villages using intermediaries and generate and sell electricity at pre-announced tariffs to the regional electricity grid. The main off-taker of electricity is the state utility besides private companies/users using the state’s grid network and trading companies. The buying and selling of power takes place on the basis of pre-signed agreements/MoUs. The price (tariff), supply (in Megawatt/Gigawatt) and duration (number of years) of power supply is fixed between the IPP and the buyer.

This project increased Greenko’s credibility as it not only had a positive impact on the environment but also aided the income of the local community/farmers besides providing a waste management solution.

During the first two years of operation, Greenko managed to deliver 40.5 MW of Biomass and 65 MW of Hydroelectricity. By 2008, the company’s turnover increased by 270%. From here there was no turning back. Their human capital and employee base started to rise as they came in terms with their popularity in the sector.

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Greenko started out with Biomass and Hydroelectricity generation and commenced its first operation in January 2006.

The company added solar into its portfolio with incorporation of Greenko Solar Energy Private Limited in 2010. Even though the establishment of the solar energy subsidiary was made easy after Texas Pacific Group (TPG) pumped in $115 Million into the Greenko Group, its penetration into the market was rather difficult. The business faced aggressive competition from already established groups like Adani Power and Tata Power, which made the company’s breakthrough challenging.

This was coupled with its deep-pocketed contemporaries Renew Power, Azure power, Mytrah Energy, Hero Future Energies and others, making the solar sector extremely competitive. It was not until 2015 that the company’s solar portfolio gained momentum. It debuted in solar with acquisition of SunEdison’s Indian assets, including a 500 MW project at Kurnool Solar Park in Andhra Pradesh in 2016.

It is important to mention here that the company, since its inception, has taken both organic and inorganic routes to raise money. The said deal was its first inorganic route. Later on, the company went aggressive on the same and acquired key companies and renewable energy assets and that is how it has managed to scale up over the years.

Their second evolution stage began in 2015, as the company aimed at deeper penetration into the renewable energy sector. Continuing the inorganic route, Greenko sold its ultimate holding in Mauritius – Greenko Energy Holding – to Singapore-based sovereign wealth fund GIC for approximately $213.3 Million. It raised a total of $2.3 Billion in equity from GIC and Abu Dhabi Investment Authority (ADIA) before completing its acquisition of SunEdison Inc. The company stood at a valuation of $6.3 Billion. This was the fourth round of capital infusion by the two, making the Hyderabad-based company the biggest recipient of foreign capital in the clean energy space in the country during that time.

The company had set its eyes for something bigger. Besides, the company had successfully achieved its 1GW capacity by 2016.

Greenko had a balanced portfolio in wind, hydro and biomass before solar took off in 2015.

In 2011, the Indian government started coming out with wind energy projects. In order to cash on the opportunity, Greenko forged its first alliance with US-based GE Energy Financial Services. The deal opened gates for a new venture – Greenko Wind Project Private Limited – to develop 1 GW of wind energy projects across India. It commissioned its first wind project – 65 MW Ratnagiri wind farm in Maharashtra – which provided renewable electricity to almost 8.75 lakh households.

The Uncertainty Factor

Greenko had the advantage of being one of the early entrants, in both wind and solar sector, with many companies still figuring out their courses of action in clean energy during that time.

The company had its targets/pipelines set, forged necessary alliances and raised the right amount of money in parallel. It always kept its window open for new tie-ups and associations to keep the technology upgraded (tie up with Spain-based wind turbine manufacturer Gamesa) and hence was able to maintain its competitive edge. The government programmes and aids acted as a catalyst.

Having said that, the company had its share of challenges. For instance, Greenko claims to have spent almost three years collecting data and then getting all the permits. As it works in close coordination with natural resources, a heavy monsoon, an earthquake, flood or drought are beyond machine control and lead to fluctuations in the output. This is where most of the renewable companies, including Greenko, bring out their advance planning and output management.

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Greenko always kept its window open for new tie-ups and associations to keep the technology upgraded and hence was able to maintain its competitive edge.

The Storage Evolution

The market was evolving further. The renewable energy supply in the country was increasing from various sources while the existing grid infrastructure was unable to absorb over 15% of the supply. On the other hand, coal struggled with meeting the peak demand in summer. Renewable supply also remained unpredictable, being dependent on the vagaries of nature.

The focus was moving towards storage and it became a part of Greenko’s pivot from a generation-focussed company to a more holistic solutions provider. This became a part of the third phase, starting in 2018. The need to connect renewable energy to a more reliable and flexible grid connection for the people was supreme.

In 2019, Greenko signed a definitive agreement for an equity investment of $495 Million with its long-time shareholders GIC and ADIA. Through this commitment, the company started its Integrated Renewable Energy Storage Project (IRESP), under which all the three projects – solar, wind and hydro – will be set up together to provide on-demand round-the-clock renewable energy. This would provide the much needed flexibility to the grid besides ancillary storage and limited storage loss.

Greenko is credited to be the pioneer in this project and is constructing India’s first and one of the world’s biggest hybrid solar-wind-pumped storage projects in Pinnapuram, Andhra Pradesh. The project is estimated to cost approximately $725 Million and will be completed soon. A similar project in Saundatti, Karnataka, is under construction.

Moving further, the company signed an MoU with NTPC Vidyut Vihar Nigam Limited in 2020 to explore similar opportunities.

Today, Greenko has covered 15 states in India with almost 86 plants under its solar, wind and hydroelectricity operations. The group is credited with building the world’s largest single-site solar park in Kurnool, Andhra Pradesh. The company manages 6.9 GW operation and has an additional capacity of more than 8 GW either under construction or in development. What stands as a security shield for the company is the nature of the business – Power Purchase Agreement (PPA). Greenko has secured long-term PPAs averaging over 20 years with government-run agencies, state-owned power companies, and other entities.

Maintaining the Diversity: An Added Strength

One of the major reasons for Greenko’s success has been its diverse portfolio of solar, wind, hydro and biomass, which has balanced its whole risk profile to date. The company was able to dodge uncertainties around supply due to this diversity. So to say, the company chose diversification over faster capacity addition in any specific segment.

This also meant an equal capital allocation for each segment. It is important to mention here how Greenko has been able to maintain a balance between debt and equity throughout its journey, further keeping the market risks in check. The need to plan and have a futuristic view in terms of pricing was minuscule as the company regulated and managed its financial resources fairly among all its segments.

The scope of diversification, which was a ‘conscious approach’ was their unique selling proposition. The reason behind other companies not gaining this momentum was the strong investment profile that Greenko had behind all its operations, leading by example for the industry.

Sustaining the Market Position

In March 2021, Greenko concluded a deal with Japan-based ORIX Corp for the investment of $980 Million, making it the single largest foreign investment transaction in the clean energy sector, valuing Greenko at $5.75 Billion and making it the second-most valued green energy company after Adani Green Energy Ltd.

This adds 873 MW of ORIX’s operating wind assets to Greenko’s portfolio while the former gains a minority stake of 20% in the latter. The deal has strengthened Greenko’s global representation besides increasing its overall operational capacity to about 6.5 GW. At present, GIC and ADIA hold 61% and 15%, respectively, in Greenko, while founders Kolli and Chalamalasetty own the remaining 24%.

Moving forwards, the company is going all-in with IREPS. The projects will provide an opportunity to digitally connect storage infrastructure and provide scheduled and flexible power to the grid. This will ensure uninterrupted electricity to the consumers during peak hours of the day. It has the potential of replacing the old-fashioned generators, especially in hospitals and medical centers by providing a better power connection and a 24×7 supply.

The founder duo recently showed interest in spacetech by investing $11 Million in Hyderabad-based start-up Skyroot Aerospace, making it the largest investment in the Indian Space start-up segment after the cabinet approved private sector participation in space activities.

The post How Greenko Became the Headliner of India’s Cleantech Narrative appeared first on Dutch Uncles.

Covid-19 Unfolds Opportunities for These Cleaning Startups

Shalmoli Sarkar — Thu, 27 May 2021 05:35:03 +0000

Disinfection, sanitisation, and hygiene have become the most valuable and now inseparable lexicon of our lifestyle since the onset of covid. In times of uncertainty where several businesses are at a precarious stage, the heightened concerns of hygiene are paving the demand for several cleaning and disinfection service providers. The cleaning startups which desperately waited for Diwali or festive occasions to generate revenues are now on the priority check-list of corporates and offices to maintain hygiene and cleanliness for the safety of their employees.

In the past few months, Urban Company has witnessed an unprecedented 200 percent rise in the number of people demanding professional cleaning services.

A pandemic or an opportunity in disguise?

VrLocal, a Hyderabad-based cleaning service initially began with the intent of providing hassle-free on-demand services to corporates and organisations with fumigation, cleaning, plumbing, electricals, painting, etc. Sai Abhishek Rayarao, founder of VrLocal realised that the demand for disinfection and sanitisation services amongst corporates is high but lacks supply. The cleaning and disinfection services is an unorganised market, sensing this VrLocal stepped forward to bridge the gap by offering high-quality cleaning and disinfection services and parallelly educating the corporates of its service benefits.

Similarly, Pune-based service tech startup Inspacco associated with the Indian Pest Control Association to offer end-to-end disinfection solutions to residential, commercial and industrial properties using VIREX 256 disinfectant. In the past year, they have provided sanitisation services to more than 10,000 clinics and 2,000 banks.

Gurgaon-based cleaning service Tenon Prime is an online platform that offers end-to-end specialized cleaning services for commercial and residential premises has been experiencing a surge in its services more from Delhi and NCR region. It uses 3 LP processes of WHO-recommended chemicals to disinfect surfaces with the help of ULV fogging and high-pressure steam machines. Till date, it has sanitised more than 7000 residential complexes of Delhi and NCR region and is booming in demand for its services from other tier-I cities such as Mumbai and Bangalore.

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Urban Company in the pandemic has witnessed an unprecedented 200 percent rise in the number of people demanding professional cleaning services.

The funeral Business – Anthyesti

We have heard about services providers from cybersecurity to beauty but one will certainly raise eyebrows about funeral services. Sympathies poured in from across the globe when it witnessed the remorseful visuals of mass funerals in India. The Covid dead bodies made a serpentine queue outside the crematoriums in Covid-19 and in midst of isolation concerns the family members could not bid a proper farewell.

Covid-19 opened a host of business opportunities for the funeral service Anthyesti meaning ‘last sacrifice’ in Sanskrit that offers end-to-end coronavirus funerals. People are grappling to make funeral arrangements due to lack of space in morgues, ambulances and wood for funeral pyres, Anthyesti formed its covid taskforce of undertakers that picks the deceased individual from the hospital and takes care of all the rituals following all the norms of social distancing. They also offer live-streaming facilities of the funeral process so that families of the deceased can attend the funeral virtually.

Hygiene and sanitisation in Entertainment Industry

The concerns of sanitisation and hygiene are paramount while shooting in the entertainment industry as they work in proximity of several individuals. However, at a slower pace with the help of sanitisation service providers, they continue their shoots.

Life First Sanitisation is a provider of hygiene services dedicated to the entertainment industry. The company carries out frequent temperature checks and covid tests for cast and crew, sanitisation of vanity vans, camera equipment, and green rooms with Ultraviolet-C light, and also offers protective shields and mask. Life First Sanitisation services offers its services to some of the leading OTT brands- Netflix, Disney+Hotstar,Amazon Prime and other leading Bollywood production houses.

What is in it for the Cleaning startups?

Heightened concerns of infection spread and cleanliness will channelise more demand for sanitisation and cleaning startups. The cleanliness service market is highly unorganised, which opens new avenues of opportunity to partner with several corporates, offices and residential areas. To keep the demand for services coming, the booking of such services should be hassle-free which should include online booking or calling on a toll-free number to book for sanitisation and cleaning services.

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ReNew Power: Re-Structuring the Face of Renewable Energy in India

DU Desk — Thu, 04 Mar 2021 04:35:03 +0000

The world is changing and much of it is due to rising levels of pollution and climate change caused by an ever-increasing population. We sometimes tend to forget the fact that this world has a finite number of resources and that is a big problem. Nowadays, even businesses face the same issues. Given the rapidly expanding population and the demand that grows with it, businesses have to push for more resources to keep up. The more resources that are in demand, the fewer resources that are available in the long-run, which makes existing resources all the more expensive. This vicious cycle is unsustainable long-term, so what is the solution?

Renewable energy seems like a good place to start. Every business on the planet needs the energy to operate, and energy generation contributes to a large chunk of our global and national pollution levels. That is where ReNew Power comes in. Ever wonder what a clean and green India would look like? Well, this is the right place to start looking for those answers.

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Renewable energy is coming into demand and it is absolutely crucial to find more sustainable ways to utilise and distribute it in developing nations like Indian. This is why unicorns like ReNew Power are so vital to the country's infrastructure.

What Is ReNew Power All About?

ReNew Power is the brainchild of an IIT graduate and former CEO of Suzlon Energy, Sumant Sinha. Launched in 2011, the company was founded with the mission of building the best renewable energy company in the world. So far, things seem to be well on their way to achieving that goal. Initially, the platform was begun to develop and distribute wind and solar energy projects.

Within just a few months of launching, the company received its first rounds of funding from Goldman Sachs. What is impressive about this particular unicorn is that as a start-up, it became the first Indian company and the 11th company on a global scale to cross the 5GW (GigaWatt) of installed capacity. The icing on the cake comes with the company entering the unicorn club, just six years after its inception as it cruised into the exclusive club in 2017 at a $2 Billion valuation.

The company started out relatively small, with just three employees to man the Mumbai-based office and the initial funding of $200 million that it received from Goldman Sachs. With extensive fundraising and bootstrapping, the platform was able to sink its teeth into the renewable energy sector with its very first venture just one year after being founded. In 2012, ReNew Power established a wind farm venture in Gujarat.

ReNew Power was initially focused on wind energy and acquiring wind farms across India but later moved into solar, hydro and eventually biomass energy production projects.

What ReNew Power Brings to the Table:

In terms of a business angel, ReNew power is oriented towards building a world-class portfolio and becoming an industry leader in renewable energy assets. It also seeks to use said assets to change how we fundamentally use energy, move away from unsustainable sources, help its customers and the world at large to transition towards more innovative, energy-efficient solutions.

In terms of what it has to offer, you could think of the company as a platform or a think tank that provides renewable energy solutions as its primary product. ReNew Power has worked on everything from commercial business to urban housing projects with some of the biggest clients. Generally, they operate projects in three broad categories: wind, solar and B2B solutions. Just to give you an idea of the scale, as of 2017, it had installed a capacity of over 2000 MW (MegaWatts) across India and is currently operational in the states of Gujarat, Haryana, Madhya Pradesh, Rajasthan, Maharashtra, Karnataka, Telangana, Andhra Pradesh, Tamil Nadu and Jharkhand. Quite impressive for a start-up.

Utility Scale Wind

Wind farms and wind energy represents the bulk of the company project portfolio. With wind farm projects across India in states such as Karnataka, Rajasthan, Madhya Pradesh, Andhra Pradesh, Maharashtra and Gujarat, the company is pushing hard to achieve a goal of 60,000 MW by 2022.

The company has reached a historic milestone by installing the tallest hybrid wind towers in India which stand at around 120 metres tall (30 metres taller than the conventional wind towers). This go-big-or-go-home approach was rightly done by Sinha as he recognised the massive potential of the rapidly growing wind energy sector. Wind farms are highly beneficial in the long-run as they produce more energy than they take up and are a giant boon in reducing the country’s carbon footprint.

ReNew Power maintains a fleet of high-performance wind turbines with a focus on quality and ensuring that they have the best domain experts overlooking the day-to-day checks. This not only gives them an edge in performance but also helps in adhering to all the safety and regulatory norms in place for such projects. More compliance means more investor confidence and therefore more expansion.

Utility Scale Solar

With the massive success that the company saw in the wind energy projects, it started the ReNew Power solar ground-mounted division in early 2013 with the aim of replicating the success of the wind projects. The first solar power project was initiated under the Madhya Pradesh State Solar Policy competitive bidding for a large-scale grid project. Upon winning the bid, ReNew Power set up a 50 MW solar farm. This generated a lot of clout for the brand. Within a short period and with the help of industry experts, the solar assets were scaled to a sizable 4.10 GW of installed capacity. The capabilities of the solar project segment of the company have grown to such an extent that the company can complete Engineering Procurement and Construction (EPC) work in-house. That basically means that the company performed well enough to a point where it can self-sufficiently handle the entire A-to-Z of the project from procurement to engineering, to output all by themselves with the aid of integrated technologies.

The clout and resources have grown so much that ReNew Power even has a program under the solar wing where it adopts rural villages and installs solar panels in innovative ways to help in their development. One such example is the adoption and development of the Saidapur village in Karnataka and the Ananthasagar village in Telangana. There ReNew Power has installed ‘Water ATMs’ which run on solar power and generate clean water for around 4000 residents. Apart from the solar initiatives the company also runs health camps and educational programs for these adopted villages. This ties into a high standard of Corporate Social Responsibility (CSR).

B2B Solutions

This wing of ReNew Power’s projects is the third broad category of business in which the company provides long-term eco-friendly and sustainable energy solutions to businesses. These solutions can be customised to a business’s particular needs with ReNew Power handling everything from start to finish.

For a business, ReNew Power will design and install a customised renewable energy project that fits all regulatory compliances and brings down the monthly electricity bill. This puts businesses at a distinct advantage, not just in a cost-saving and eco-friendly manner, but also paints them in a positive light when it comes to public perception.

To top it all off, this project can be opted for by a number of different sized businesses, as the company offers a variety of cost-saving packages and handles all the maintenance and set-up in-house.

This entire process is very streamlined. With over 500 installation sites undertaken in 80 cities, spread out over 18 different states, this wing of the projects offered by ReNew Power is a prime example of the wide reach and the upscaling that this initiative has achieved.

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What ReNew Power does is focus on just a few key areas and has thereby developed and scaled up projects in those areas considerably. Quality, not quantity.

The Secret Behind Their Success

Now, when considering the large-scale uptick in ReNew Power’s operations, it is evident that it is not something a conventional start-up does, especially with the whole village adoption initiative. It is effectively going completely out of its own way and branching off early on in the game. The reason that all ReNew Power has been able to undertake such immense expansion in such a small period is due to two factors. One is the streamlined approach to delivering cutting-edge projects and keeping the core focus to a few but key aspects of the renewable energy industry like solar and wind, which are on the rise in developing nations like India. Between 2019 to 2020 ReNew Power’s Projects contributed to nearly 1 per cent of the total electricity generated in the country and mitigated 0.5 per cent of the carbon emissions. A massive accomplishment, especially given that it is a start-up.

The other reason for success is the powerful backers that the company has managed to garner since its inception. It should be noted that the renewable energy sector, while lucrative and growing, is very capital intensive and requires a lot of funding just to get the business off the ground. The only way a new start-up like ReNew Power was able to secure these necessary funds was to prove to investors that it was worth their time. In more recent times ReNew Power has garnered the backing of players like the aforementioned Goldman Sachs, Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, JERA (a joint venture between two of Japan’s largest utility companies, Tokyo Electric Power Co., Inc. and Chubu Electric Power Co.) and Global Environment Fund, bringing the total enterprise valuation to a staggering $ 8 Billion and earning it a spot on the coveted NASDAQ (National Association of Securities Dealers Automated Quotations) listing.

With this combination of streamlined quality projects and big-ticket backers laying the foundation, it is a clear entrant into the exclusive unicorn club and what makes it one of India’s largest and fastest-growing titans in its respective industry.

Over the years ReNew Power has hit quite a few milestones. For instance, today there are more than 100 active projects active across eight different states that have been set up within the 10 years of the company’s inception. In that same period, it has seen steady growth in its operational capacities via organic growth and smart-move acquisitions like that of Ostro Energy in 2018. This was the largest acquisition made by the company to date and further cements its position in the renewable energy market as a giant. It has also serviced some of the biggest client names out there like Tata Services Limited, BigBasket. Tata Communications, Toyota, Mercedes, Marriot and Delhi Metro to name a few.

In light of these achievements, ReNew Power has won many awards. A few notable ones are the United Nations SDG Pioneer Award (2020), the Mahatma Award for Social Good (2021) and the Reuters Clean Energy Transition Award (2020).

Individuality Makes All the Difference

Even with all this success and recognition, the thing that sets ReNew Power and its projects apart from the competition is the integration and consideration of CSR. Apart from the business aspect of building a great empire in renewable energy, each and every project is established around the core concept of empowering communities and improving their lives through education and access to better resources. As per the company website, the projects are built around three main factors: Human, social and natural capital.

ReNew Power holds extensive social awareness on how every project can impact (negatively or positively) the environment and the people. With this knowledge in mind, these projects are structured in a way that the threshold between unsustainable practices and sustainable living are soon closed. This is what makes ReNew Power and the products they offer such a game-changer in the renewable energy industry.

For more inspiring stories like this, read our Inspire Section.

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