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Will Specialized Buyer-Seller Meets accelerate Renewable Energy adoption?

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  • Saturday, 27 July 2013
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  • Rajesh K
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  • Varadarajan-REHENA-TANSTIA-MSME-Energy-Efficiency-Conference-Chennai-July-27-2013

    Renewable Energy is more than just business - it's also a social cause. There is the real problem of power shortage and if we don't act now, situation will only get worse. But, if renewable energy equipment sellers treat this sector like any other business and focus on selling equipment, instead of power (which is what the customers actually need), it maybe difficult for customers to adopt RE, especially in the face of huge capital costs involved in setting up renewable energy generation plants. Can anything be done differently?

    REHENA is an organization based in Chennai and they are focused on increasing the renewable energy adoption among the consumers. They regularly conduct Buyer-Seller Meets (BSM) (so far in Chennai, but they have plans to expand this to other regions soon) where they connect buyers with sellers. This is not like a general RE expo as the entry is invitation-only (even for buyers) and the organization studies/evaluates the requirement/electricity consumption patters of the buyers, before determining whether renewable energy will suit their requirement and tries to connect them with the most appropriate system integrator. 

    Mr. PB Varadharajan, who is the working President of REHENA gave a short talk about the organization, the need for BSM and how they contribute for the development of RE in India, during the recently concluded, 'Climate Change and its Mitigation - A serious issue for SME's' conference conducted by TFSC (TANSTIA-FNF) on Saturday, July 27, Raintree Hotel, Chennai.  

    The first section of his talk revolved around whether there is a market for energy - Of course there is a huge market. The energy needs of companies/organizations will only increase in the near future, and we are faced with the big issue of shortage of raw materials (oil, coal, etc). Why still do consumers not do anything substantial to mitigate this energy crisis, and why do we have power shortages? Why aren't renewable energy equipment flying off the shelves?

    Then he stressed on the point that buyers buy energy and not power generating equipment. A diesel genset may cost Rs. 15-18 per unit (to operate) while the grid power comes at Rs. 6-8 per unit and RE power costs Rs. 8 per unit (to operate), but still there are so many diesel gensets in the market. Even though buyers are paying a lot of money for diesel (especially on the long run), they consider this as recurring expenditure and don't have to worry about moving a "P&L" item into their balance-sheet. 

    And then, there maybe some limitations to renewable energy sellers - First, there are so many system integrators (as the entry barrier is low and the business is not capital-intensive), but all of them are trying to sell high-value equipment. Renewable Energy equipment purchase is a long-term investment and customers expect technical expertise, financial stability and support structures in companies/products they are investing in. Also, typically, the decisions for buying such high-value equipment rests with top management. Engineers and administrators only evaluate the technical/financial feasibility. An effective dialog should involve both the parties. 

    In order to address these concerns, he says, REHENA is involved in the following activities - 
    • Organizing focused Buyer-Seller meets at industrial hubs and other places where customers are actually located.
    • Arranging credit, infrastructure funds for buyers.
    • Organizing trained RE technicians to manage/maintain RE equipment, where ever required.
    • PPA (Power Purchase Agreements) for large buyers via PPP (Public Private Partnership).
    • Coordinating with Government agencies and communicating policy related issues.
    • Creating an enabling RE ecosystem to increase renewable energy adoption in the country.
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