Convergence Energy Services Limited (CESL), a recently established subsidiary of Energy Efficiency Services Limited (EESL), is actively working in the decentralised solar power, electric mobility and energy efficiency segments. The company is also seeking to grow in the energy transition business by providing storage solutions, as well as explore avenues across international borders. In a recent interview with Indian Infrastructure, Mahua Acharya, managing director and chief executive officer, CESL, shared her views on the company’s operations, issues and challenges, and the key focus areas for the future…
Could you give us an overview of CESL’s operations and its key projects?
CESL is a newly launched venture of EESL, jointly owned by four central public sector undertakings under the Ministry of Power, Government of India. It aims to become an “energy transition company”, offering cross-cutting interventions that solve multiple gaps in the energy ecosystem by amalgamating seemingly independent sectors such as electricity, transport, batteries and home appliances, and introduce models for adaptation at scale.
At CESL, our core focus areas include three sectors – renewable energy, electric mobility and climate change. In the renewable energy spectrum, we have our decentralised solar project, which was started for realising India’s solar energy potential and the need for clean and reliable daytime electricity for farmers. Under this project, the company aims at providing cost-effective, clean energy to households in remote areas where proper power supply has been a cause for concern. The project also entails solarising agricultural feeders by setting up small decentralised solar power plants on vacant or unused lands owned by discoms.
CESL has entered the electric vehicle (EV) domain as a demand aggregator. We work towards providing an impetus to Indian car/bike manufacturers, EV charging infrastructure companies, fleet operators and service providers. We assist in gaining efficiencies of scale and driving down costs, creating local manufacturing facilities, and increasing technical competencies for the long-term growth of e-mobility in India. We lease electric two-wheelers, three-wheelers and four-wheelers to interested stakeholders. Additionally, we partner with state authorities to install EV charging infrastructure across the nation. We aim to become a one-stop solution for all the e-mobility needs of various kinds of clients.
Under the climate change spectrum is the Gram UJALA scheme, which is supported by carbon finance. We offer rural households the opportunity to exchange their incandescent bulbs for energy efficient LED bulbs at an affordable cost of Rs 10 per bulb. Consumers can exchange a 60 W incandescent bulb for a 7 W LED bulb, and a 100 W incandescent bulb for a 12 W LED bulb for Rs 10 per bulb. These LED bulbs consume less electricity than incandescent bulbs, while offering better illumination and longer shelf lives. Apart from the above, the company is exploring various new strategic initiatives such as interventions in the battery energy storage system (BESS) space, which will become the core of various technologies in the future. CESL is also exploring various projects outside India, especially in the Middle East and North Africa region.
What have been CESL’s recent operational highlights?
We have resumed the distribution of affordable LED bulbs under the Gram UJALA scheme in Uttar Pradesh and Bihar. With over 1 million bulbs distributed so far, the Gram UJALA scheme has helped save around Rs 592.6 million per year, reduced energy to the tune of 47.41 MW per year, and mitigated 0.159 million tonnes of CO2 emissions.
We are building on our decentralised solar development. Recently, CESL partnered with Meghalaya and the Union Territory (UT) of Ladakh to expand our decentralised solar portfolio in the country. With Meghalaya Power Distribution Corporation Limited, CESL signed an MoU for 60 MW, which entails finding synergies in business development to implement various sustainable solutions such as pump sets, LED lighting and solar power stations for agriculture in Meghalaya. With the UT of Ladakh, CESL is implementing various clean energy and energy efficiency programmes, including 5 MW of decentralised solar power in the Zanskar region. These are in addition to the 100 MW decentralised solar project that we are implementing in Goa.
In the e-mobility space, we have deployed 1,514 e-cars till date. These EVs have thus far covered 52 million e-km. We are also going to lease 25,000 EVs for government employees in Andhra Pradesh. CESL has also been entrusted with aggregating demand for e-buses and three-wheelers under the Faster Adoption and Manufacturing of Hybrid Electric Vehicles Phase II (FAME II) scheme.
All our public charging outlets are now equipped to charge e-buses. This will enable swift deployment of electric public transport, facilitating myriad value streams such as monetised greenhouse gas reductions, addition of new services for a new market and enhanced convenience for the public.
How is the ecosystem for EVs shaping up? What are some of the roadblocks hampering deployment?
The EV ecosystem is building up at a rapid pace now. The government is actively working towards setting up multiple charging stations in cities across the country. States are individually taking several measures to adopt e-mobility by not just providing subsidies on EVs (Maharashtra EV policy), but also starting trial runs for electric buses (Lucknow and Ghaziabad), electrifying autos (Delhi EV policy), and more. The key roadblocks, however, lie in convincing the masses to make the transition to e-mobility. High initial costs, lack of adequate and accessible charging infrastructure, unavailability of an electricity grid system that can charge multiple EVs at the same time, and limited public awareness of the benefits of e-mobility are the key challenges that need to be mitigated. There is a need for better financial instruments that can make EVs affordable for the common man. Awareness building can help in figuring out the triggers for driving consumers towards EV adoption. Wider adoption needs to come from states as well. While policies are being welcomed by manufacturers, whether these policies are convincing enough for consumers to buy EVs needs to be studied.
How can BESS be made more affordable?
While battery storage is technologically the most superior solution for energy saving, its costs are too high for applications at the formative stages. The central government has set up the National Mission on Transformative Mobility and Battery Storage, which seeks to establish large-scale, export-competitive integrated batteries and cell manufacturing giga-plants in India through a phased manufacturing programme. This can help in reducing the price of energy storage in the country and boosting indigenous manufacturing. The issuance of preferential market access guidelines for battery procurement is another potential measure that can bring down the cost. This would also encourage the domestic manufacturing of batteries in India.
Through partnerships with key technical partners, CESL is making way for opportunities to redesign solutions to include battery storage capacity. CESL is at the forefront of policy development and recommendations for enabling energy storage solutions for the Indian markets. Battery swapping has the potential to considerably reduce the wait time of charging by mimicking the experience of fuel pumps. It can also optimise total cost of ownership, reduce resource intensiveness, act as a demand-responsive unit for discoms, and in the future, become an enabler of the smart grid, among other uses. However, we are still at a nascent phase of exploring its utility and will be able to gauge its full potential with increased adoption.
Critical considerations for the adoption of BESS will require focusing on multiple areas – a conducive policy and regulatory environment, articulation of the correct business cases (which can capitalise on the value stacking characteristic), acquiring stakeholder buy-ins and designing programmes that create a win-win situation for all, and thereafter scaling up the same.
What are the key issues and challenges being faced by CESL and how are they being addressed?
One of the key issues is the company’s need for capital considering its aggressive plans, to mitigate which fundraising strategies are being adopted through investor outreach and strategic tie-ups. With new and evolving businesses, there is also a need to have more focus group discussions with industry leaders, and delve into new business models.
What are CESL’s key focus areas and priorities over the next two to three years?
We are looking to devise newer initiatives and fresh ideas in hitherto untapped sectors, combinations and geographies. There will be a strong push into sectors such as mobility, battery storage and decentralised solar. We look forward to intensifying partnerships with key stakeholders and state governments, both qualitatively and quantitatively, besides exploring avenues across international borders. We recently formed a Thought Leadership Unit to capture learnings from and analyse the changing landscape of India’s energy sector. It will especially focus on building robust and adaptative business models in e-mobility using various innovative methods such as carbon finance. Furthermore, we will implement internet of things to make our offerings more energy efficient, cost efficient and futuristic. A lot of this can be achieved by shifting our thinking from a damage-reducing perspective to a regenerating and enhancing one.