EESL

Leading presence in the distributed clean energy space

Energy Efficiency Services Limited (EESL) is an energy services company focused on areas such as renewable energy, lighting, electric mobility and energy efficiency. Promoted under the Ministry of Power, EESL was established in 2009 as a joint venture of four central power sector undertakings – NTPC, the Power Finance Corporation, REC Limited and Power Grid Corporation of India Limited – to facilitate the implementation of energy efficiency-related projects in the country. EESL works closely with the Bureau of Energy Efficiency and is leading the market-related activities of the National Mission for Enhanced Energy Efficiency.

The state-owned company also has a recently established subsidiary, Convergence Energy Services Limited (CESL), whose operations are focused on energy solutions that lie at the confluence of renewable energy, electric mobility and climate change. One of the major operational areas of CESL is decentralised solar power development in remote and rural areas. The range of solutions provided includes applications of battery energy storage, agricultural pumps, street lighting, domestic lighting and cooking appliances. Another area for CESL is battery-powered electric mobility and its infrastructure, for which it will help design business models to increase the uptake of electric vehicles (EV) in India. Such business models will be a blend of concessional and commercial capital, carbon finance and grants.

Decentralising solar

EESL had set a target of installing close to 2,000 MW of solar power capacity by 2021. These projects are expected to generate 3,066 GWh of renewable energy and avoid 2.5 million tonnes of carbon dioxide per year. By setting up decentralised solar projects, EESL aims to reduce the burden of subsidy on state governments, as well as the burden of transmission and distribution losses and network augmentation on distribution companies. To this end, EESL launched a decentralised solar programme offering solutions for discoms, government, industries and institutions, among other entities.

Under the programme, EESL will sign power purchase agreements (PPAs) with the concerned entities for decentralised solar PV-based power projects ranging from 0.3 MW to 10 MW, which are being developed in vacant, unused or excess lands near the discom substation premises. The power generated by these will also help in solarising agricultural feeders to meet the power needs for farming activities. EESL will undertake financing, designing, engineering, manufacturing, supply, installing testing and commissioning, and operations and maintenance (O&M) for the project period of 25 years. EESL and Maharashtra State Electricity Distribution Company Limited (MSEDCL) have already signed a PPA for 500 MW of decentralised solar projects in Maharashtra. At present, around 100 MW of cumulative decentralised solar projects have been installed and commissioned in the state. Earlier, in December 2020, EESL also announced the commissioning of its 7.9 MW solar project for MSEDCL, located in Devdaithan village in Ahmednagar, Maharashtra. This was part of EESL’s commitment to the state under the Mukhya Mantri Saur Krishi Vahini Yojana, wherein it will supply the state discom with 679 MW of solar power.

EESL is in the process of executing similar agreements with several other states. Further, in support of powering agriculture through solar, EESL invited bids for the development of 317,975 off-grid solar water pumps across 30 states and five union territories under Component B of the Indian government’s Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan programme.

EESL is also implementing a rooftop solar PV-based power project programme. Under this programme, EESL will undergo an agreement with consumers for setting up rooftop solar-based projects, mainly under capex and opex models. EESL will undertake the design, engineering, manufacture, supply, installation, testing and commissioning, repair and maintenance for five years under the capex model, and O&M for 25 years under the opex model. While the rooftop owner will make the entirety investment in the case of a capex model, EESL will carry out the investment and maintenance of the plant in the case of an opex model.

In the off-grid space, EESL is implementing the Atal Jyoti Yojana (AJAY), a sub-scheme under the Off-Grid and Decentralised Solar Application Scheme of the Ministry of New and Renewable Energy (MNRE). Under AJAY, solar LED lights are being installed in rural, semi-urban and urban areas lacking proper access to power. Under AJAY Phases I and II, EESL has installed over 0.197 million solar LED street lights in rural areas of Uttar Pradesh, Assam, Bihar, Odisha, Jharkhand, Madhya Pradesh, Uttarakhand, Rajasthan and Gujarat.

Electric mobility

EESL has had a key presence in the emerging EV ecosystem in India. It is developing the EV charging infrastructure across various regions and has signed MoUs with multiple stakeholders across municipalities and discoms for locational assessment study and setting up of charging infrastructure in their jurisdiction. These include locations under the jurisdiction of the New Delhi Municipal Council, South Delhi Municipal Corporation, Ahmedabad Municipal Corporation, Greater Hyderabad Municipal Corporation, the Telangana government, New Town Kolkata Development Authority, New Okhla Industrial Development Authority and PWD, Maharashtra. Other locations include premises under the Chennai Metro Rail Corporation, Hindustan Petroleum Corporation Limited, Jaipur Metro Rail Corporation, Apollo Hospital, Maharashtra Rail Corporation Limited, Kalinga University in Naya Raipur, BSNL and CSC e-governance Services. India’s first public charging plaza was inaugurated on July 20, 2020 at Chelmsford Club, New Delhi. The charging plaza can charge 14 electric cars at the same time.

On the EV front, EESL has completed the procurement process of 10,000 electric cars under the National e-mobility Prog-ramme. Till date, 1,514 electric cars have been deployed or are currently under deployment for government organisations. These electric cars are being given on lease or on an outright purchase basis to replace the existing petrol and diesel vehicles taken on lease by government organisations.

Solar and EV initiatives under CESL

CESL plans to support the development of 100 MW of solar power capacity in the state of Goa. Under this project, CESL will implement decentralised solar energy projects on government lands and the energy generated would be used for agricultural pumping. In January 2021, CESL commissioned 1 MW of Goa’s first solar energy project. This is CESL’s and Goa’s first milestone in the 100 MW project. In January 2021, its parent company, EESL also floated a tender for the development of 70 MW of solar power projects to be installed across various locations in Goa. CESL was designated to provide the required land for development and be in-charge of organising the competitive bidding process. CESL is also active in Goa’s neighbouring state of Maharashtra. In February 2021, CESL floated a tender for developing a total of 100 MW of solar power projects across districts in Maharashtra. The project will comprise individual systems ranging between 2 MW and 10 MW. CESL plans to scale up the distributed solar business that it inherited from EESL.

CESL plans to supply electric two-wheelers to states such as Andhra Pradesh, Kerala and Goa, to support India’s ambitious plans for green mobility. CESL has also recently signed an agreement to supply 25,000 electric two-wheelers to the New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP) for state government employees on a monthly lease. As per the agreement, CESL and NREDCAP will work to aggregate demand, deploy EVs and build the charging infrastructure. CESL will devise a suitable payment security mechanism, which will be facilitated by NREDCAP. In June 2021, EESL invited expressions of interest (EoIs) to empanel original equipment manufacturers to supply electric two-wheelers in Kerala. As per the notification, all vehicles should be technically compliant with FAME II guidelines and carry an Automotive Research Association of India certification. CESL is also involved in Goa’s budding e-mobility segment. In January 2021, the first public EV charging unit installed by CESL was inaugurated as part of the Green Goa Initiative. The 142 kW fast charger was set up at the Goa Legislative Secretariat complex. It is among the 12 public EV chargers to be set up by CESL.

In the northern region, the Ladakh government and CESL have signed an MoU, under which CESL will execute solar mini, microgrid solutions, energy efficient lighting, battery storage solutions, energy efficient cooking stoves and electric mobility solutions in the Union Territory of Ladakh. Further, a pilot project will be installed in the Zanskar valley area. CESL will also build the EV ecosystem for Ladakh. This will focus on EV charging infrastructure, based on renewable energy as well as high altitude EVs.

The way forward

A large part of EESL’s operations related to decentralised renewable energy and electric mobility have been inherited by CESL. To help CESL move forward in this space, it will also receive a capital infusion of Rs 6 billion-Rs 7 billion from the parent company. The asset-heavy business operations also cover battery energy storage, which is at the intersection of solar assets and the electrical mobility business. Thus, moving forward, the projects under CESL should be structured in such a way that they are bankable and provide lucrative investment opportunities for private players.

In sum, the areas of decentralised solar and electric mobility offer a promising future, and therefore offer a huge potential for EESL (through CESL) to scale up projects. However, battery storage and charging technology continue to be relatively expensive; hence, the financial viability of projects may need to be more carefully worked out for healthy returns.

By Meghaa Gangahar

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