Smart Grids: Growth business in Indian energy sector

September 17th, 2014

SUMMARY of the Team Finland Future Watch Session

Introduction

‘Smart Grids: Growth business in Indian energy sector’ session brought together specialists from business and research institutions to discuss about the future business opportunities in Indian smart grid markets. In the session, we also defined the major barriers for the market entry and ‘ground rules’ to successful in energy business in India. The session was organized via video conferencing in Helsinki, Jyväskylä, Lappeenranta, Vaasa and Delhi.

This document summarizes the outcomes of the Future Watch session

Event info (in Finnish). https://tapahtumat.tekes.fi/tapahtuma/kasvubisnestaintianenergiasektorilta?key=051be2ae1e255408af5d82d

Indian Smart Grid market developments and future business potential for Finnish companiesRekha Salvi & Dinkar Krishnan (Smart Grid industry specialist, Finpro)

Introduction to India Smart Grid Forum, Smart Grid Vision and Roadmap for India, Smart Grid Projects and India Smart Grid Week 2015Mr Reji Kumar Pillai (President of Indian Smart Grid Forum, ISGF)

Case Ensto, doing business in IndiaJuhani Hovilehto, President - India Operations, Ensto Utility Networks.

Case Viola Systems, doing business in India Jyrki Penttonen, CEO, Viola Systems

Presentations

Workshop (done in all participating cities)

Goal of workshop was to define

Biggest business opportunities in Indian Smart Grid markets

Biggest Challenges in market entry

Needed action to exploit opportunities/ overcome the challenges. Team in Delhi also defined the ‘ground rules’ to be successful in energy business in India.

The outcomes of the local workshops were shared between the countries and shortly discussed. This document summarizes the outcomes of the Future Watch session

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WORKSHOP RESULTSTeam Finland Future watch

Smart Grids: Growth business in Indian energy sector 17.9.2014

HELSINKI TEAMBiggest business opportunities for Finnish companies in Indian Smart Grid markets1.Back to basic-Maximum impact with simple technologies and scarce resources (such as connectors provided by Ensto), and defining business opportunities by monitoring the smart grid (such as automated measurement solutions by Viola Systems).

Brings us back L1 (lowest price category) and large scale. Capacity building of infra at the areas with biggest need Enables creation of local livelihoods

2. Power for all-Island grids based on 1) Renewables (bio, sun, wind / Hybrid solar plants combined for example with methane), and 2) Franchising model

Small scale energy production to enable availability of electricity, heat and cooling

Ehancing recycling-Capacity building of infra at the areas with biggest need and, if possible, linking educational/ skills development programs to State schemes

HELSINKI TEAMBiggest business opportunities for Finnish companies in Indian Smart Grid markets… continue

3. Roof top solar & consumer integration-Demand elastacity/ Balancing energy peaks-Need is huge but there is a lack of money in the rural areas where the need is highest-Big cities offer best opportunities (For solar roof top project in office buildings, please contact Jatta Jussila, CLEEN Ltd (jatta.jussila@cleen.fi)

4.Consultancy services regarding the energy systems: -Especially motoring/metering services and data management and system optimization

Positive elements supporting new business creation:- All energy forms and the knowhow is in Finland (excluding production & storage)- Scale is huge 1.3 Billion persons. Different States have their own needs and resources there are a number of opportunities - New law regarding the CSR tax for companies operating in India may open business opportunities for Finnish SMEs

HELSINKI TEAMBiggest challenges/ obstacles in market entry 

1.Standards (if there are no standards it’s very challenging to build smart compatible solutiion)2.Buillding networks + selecting partners3.Defining IPR strategy4.Project financing 5.US & Japan have financed large scale pilots, what is an equivalent Finnish instrument for piloting?6.Forms of tenders (pricing 1st criteria)7.Access to energy forums and value networks 8.How to make value-based selling? In end-to-end solutions possible but regarding the single components very challenging. Requires: understanding of customer need/ current status of the grid/ continuous education/ co-development of system with the customer and other service providers9.The scale is so huge that there’s “no chance” with renewable

JYVÄSKYLÄ TEAMBiggest business opportunities for Finnish companies in Indian Smart Grid markets1.Small grid in rural areas2.Single state project to avoid RFP process3.Small windpark4.Micro grid wind components5.NG development fundingWhat are the biggest challenges/ obstacles to enter to the market1.Local partner2.Building consortium with local partners 3.Financing4.Price competition5.To build the first prototype windpark with WS- Turbines (100 pc windside windmill windpark)Needed actions1.Contact list of potential partners (SMEs) in India & Finland2.CLEEN Ltd – SGEM, linking SMEs to SGEM3.Some Indian governemental body to contact Finnish cluster of SMEs (once gathered together) with cooperation 4.Some Indian governemental body to contact Windside Production Ltd Oy with cooperation

VAASA TEAM

Biggest business opportunities for Finnish companies in Indian Smart Grid markets1.Delivery/sales of systemic solutions instead of single component(s). Biggest challenges/ obstacles in market entry1.Tough price competition2.Finding right contacts and cooperational partners. Contacts play a crucial role when operating in new markets.3.Challenges in business environment and society: byrocracy, old practices/traditions/ ways of acting in business, and corruption.

Needed actions•A list of Finnish SMEs with experience and presence in Indian energy business (especially companies in the of electricity solutions).

DELHI TEAM

Best business opportunities for Finnish companies in Indian Smart Grid markets

1.Pilots and non-pilot projects2.100 Smart City Project (Key Features of Indians 100 Smart City (http://thinkingcities.com/key-features-of-indias-100-smart-city/, 100 Smart City Project-Cheer for Modi https://www.facebook.com/MODI898). 3.Negotiated projects4.JNNSM – solar (http://mnre.gov.in/file-manager/UserFiles/draft-jnnsmpd-2.pdf)5.Digital India (Broad connectivity)6.NSGM bigger projects

Challenges in Smart Grid market entry in India  

1.Procurement process Especially governmental, bilateral, multilateral projects

2. Supplier credit, bankfinancery at self- funded projects To build business case Consultancy (local) requiery

3. Need to have right partners, right advisors

DELHI TEAMGround rules to be successful in India Smart Grid business

1. Prepare for long haul (Don’t expect things to move from beginning 2-3 years)2. Local partnerships demonstrated projects3. Be careful with the bidding process. Indian companies compete on unreal targets ( Red flag)

Other options - Direct projects as demonstration projects Other models Loans from multilaterial agencies

4. Identify projects, needs etc. with the help of local expertice (such as ISGF, Finpro, Embassy)5. Very important: Field studies to validate the current state6. Try to identify very spesific/ concrete problem areas and try to solve it (rather than look at big ticket)7. Japan also promoting small & medium companies. Similar approach needed for Finland?8. Subcontracting with bigger consortiums9. Campus Microgrids, industrial parks The U.S. Trade and Development Agency (USTDA) – planning and optimization

Renewables intergrated, Energy storage H/w funded by Owner S/w funded by USTDA/ US

DELHI TEAMGround rules to be successful in India Smart Grid business… continue

10. Learning from /cooperating with other EU countries – Sweden, Netherlands, Swiss11. India activities other Scandinavian countries IFBF, http://www.ifbf.in/12. Big Finnish companies take a role of consortium leaders13. Active presence in Indian Smart Grid forums. How Finland will be part of the India SmartGrid week – March 2015 presence/ active sessions/ pavillion

Interested to know more?

Contact us

Future Watch Team in New DelhiTekes partner Silva Paananen

(silva.paananen at promade.fi)Finpro Leena Österberg

(leena.osterberg at finpro.fi)

Future Watch Team in HelsinkiHeli Karjalainen (heli.karjalainen at tekes.fi)Laura Nurmi (laura.nurmi at tekes.fi)

Aki KoivistoinenDirector, Business Evolution+358 50 309 4298aki.koivistoinen@dazzle.fiLinkedIn_aki koivistoinenDazzle LtdSalomonkatu 17 B 12th floor00100 Helsinki, Finland

Co-designing next practices in innovation, business and

strategy

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THANK YOU for participating to The Future Watch session!