What are the Future Prospects of Start-ups in Renewable Energy Sector?
- 1. Copyright ©2014 ShARE. All Rights Reserved What are the Future Prospects of Start-ups in Renewable Energy Sector? 19 March, 2017 Presentation By- Sharat Sawhney Energy Network IIT Roorkee
- 2. Copyright ©2014 ShARE. All Rights Reserved 2 Executive Summary ⚫ With the increasing population (Annualgrowth rate of 1.13%)and corresponding demand,therehas been a rapid depletion ofthe non-renewable sourcesof energy. ⚫ Thus,thereis an urgentneed to overcome these demandsby the use of renewablesources of energy whose potentialis untapped. ⚫ To accomplishthis huge task of transforming energydependency,there is an inevitable role of start-upsespecially in India. ⚫ Certain Indian Start-ups suchas SELCO and HPS have shownthis transformation in the unexploitedsourceof solar energy and bio-gas(in particular). ⚫ However,mostof the startups in India show no interestto enterprise in renewableenergy sector. ⚫ Investments byVCs can help energy startupsto flourish and expandtheir outreach. ⚫ The involvementof startups in renewable energy sector in India can lead to a plethoraof economic benefits.
- 3. Copyright ©2014 ShARE. All Rights Reserved 3 With the increasing population (Annual growth rate of 1.13%)and corresponding demand,there has been a rapid depletionof the non-renewable sources of energy. ⚫The global annual energy demand growth is practically always greater than 1%, which shows that the vast reserves of fossil fuels would not help us too far. ⚫The world population is predicted to reach 10 billion by 2050 which puts us into great trouble in terms of energy dependency. ⚫Thus, there must be carved out a way to this energy scarcity. Global annual energy demand growth in period ending. Source: BP, IEA
- 4. Copyright ©2014 ShARE. All Rights Reserved 4 Thus,there is an urgent need to overcomethese demands by the use of renewable sources of energy whose potential is untapped. ⚫As indicated in the graph, renewable sources ofenergy have a much greaterpotential than conventionalsourcesof energy. ⚫By 2040,mostof the energy dependencywould be and needs to be based on renewable sourcesof energy. ⚫Thus,we mustfocus our attention on renewable resourcesand its development. Source: IEA World Energy Outlook 2015 0 5000 10000 15000 Oil Nuclear Gas Coal Renewables TWh energy Global Electricity Generaion By Source Change to 2040 2014
- 5. Copyright ©2014 ShARE. All Rights Reserved 5 To accomplish this huge task of transforming energy dependency, there is an inevitable role of start-ups especially in India. •A broad base of processes, practices and tools, in any industry that supports a sustainable business approach, including but not limited to: pollution control, resource reduction and management, end of life strategy, waste reduction, energy efficiency, carbon mitigation and profitability. •With rapid growth of Indian economy, demand for energy is increasing exponentially. At the same time, there is a push from global community to curb pollution and take measures to control environmental degradation. This has compelled Government of India to shift attention towards generating energy through renewable energy sources and encourage adoption of cleantech. •The government has decided to spend USD 20 billion for hydro projects by 2020 and USD 200 billion to add 150GW of power capacity over a period of 5 years. What is CleanTech? CleanTech needs and happenings Startups could bring not only the technological upliftments in renewable energy sector but would also pave the way for social poverty elimination through jobs, and trans- formation in energy dependency. Source:TechStory
- 6. Copyright ©2014 ShARE. All Rights Reserved 6 Certain Indian Start-ups such as SELCO and HPS have shown this transformationin the unexploited source of solar energy and bio-gas (in particular). ⚫SELCO India has played an instrumental role in improvingliving standards ofpoor householdsin ruralIndia especially in the state of Karnatakathrough solarenergy based interventions and low smoke cook stoves •SELCO India has been awardedthe prestigiousAshden Awards(also known as the Green Oscars)twice,in years 2005and 2007.SELCO India was foundedin 1995 by Dr.Harish Hande an alumnus ofIIT Kharagpurwith INR 15,000 fundingfrom its co-founderMr.Neville Williams. SELCO India has installed solar lightsystems in 125,000housesand plans to aims to reach over 200,000 householdsby 2014. ⚫HPS providesend-to-endrenewableenergy solutions byinstalling 25-kWto 100-kW ‘mini power plants’and then wiring villages and hamlets of up to 4000 inhabitantsto deliver electricity on a pay-for-use basis. •HPS uses a biomassgasification based proprietaryelectricitygeneration process, that generateselectricity using 100% producer gas based system (“singlefuel mode”). •HPS distributes electricity directly to householdsand smallbusinesses while keepingcosts low by runninginsulated wires along bamboo poles to subscribing households,businesses and farms. •HPS TotalLandedCostof Installation < $1,300 per kW * SELCO-Selco Solar India Husk Power Systems Source: selco-india, huskpowersystems.com
- 7. Copyright ©2014 ShARE. All Rights Reserved 7 However,mostof the startups in India show no interestto venture in renewable energy sector. •Commercialization barriers faced by new technologies competing with mature technologies •Price distortions from existing subsidies and unequal tax burdens between renewables and other energy sources •Failure of the market to value the public benefits of renewables •Market barriers such as inadequate information, lack of access to capital, "split incentives" between building owners and tenants, and high transaction costs for making small purchases •Array Converter (Module-level power electronics) bankrupt, IP to VC investor •Avancis (CIGS) discontinuing production •Bosch (c-Si PV module) exits module business •Concentrator Optics (CPV) bankrupt •Cyrium (CPV semiconductors) bankrupt •Direct Grid (microinverters) closed •EiQ (Module-level power electronics) closed •GreenRay (microinverters) closed •Helios Solar (c-Si modules) bankrupt •Hoku Solar (silicon) bankrupt Hurdles for Start-ups Failed Solar Start-ups Source: UCUSA
- 8. Copyright ©2014 ShARE. All Rights Reserved 8 Investments by VCs can help energy startups to flourishand expand their outreach. •VentureCapitalists have decreasedtheir investments over the long run in renewable energysector.Thereason is high-risk and low profit margin. •Valued at around $7 trillion globally,energy is the most valuablemarketsegmenton earth.Deliveryof usable forms of energy to the world’s seven billion people is responsible for 10% of the world’s annualgross domestic product. •Accordingto the International EnergyAgency,globalenergy demandwill grow by more than 30% by 2035. •To meetrising energydemands, the world mustinvest$37 trillion in related production and supply infrastructureacrossall sectors of the energy industryover the nexttwo decades. Source:MIT 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 2007 2008 2009 2010 2011 2012 2013 2014 $Billion Investments by VCs in Energy Sector
- 9. Copyright ©2014 ShARE. All Rights Reserved 9 The involvementof Startups in renewable energy sector in India can lead to a plethora of economicbenefits. •Making the switch from fossil fuels to renewable energy sources could provide the much-needed kick to the economy. According to a 2007 study from the University of Tennessee, the state of Pennsylvania could generate about 44,000 new jobs and increase net farm income by $460 million by adopting renewable energy. •Among all renewable sources of energy, bioenergy arguably has the most lasting influence, locally and regionally. This could be due to the fact that the fuel is created, prepared and transported within a small area. It is also extremely labor- intensive. •Production of renewable energy isusually more efficient compared to traditional energy. •The American Wind Energy Association claims that a sufficient number of wind plants – that could be built in four years – could eliminate the gas shortage. All other forms of renewable energy sources also turn out to be way cheaper than traditional non-renewable sources. •What this meansfor consumers is that they can save money on their utility bills. •Dependence on fossil fuels continues to distort the energy market resulting in a significant number of people having no access to power. I •It is estimated that almost 1.3 billion people across the world had no access to electricity in 2011. •A total of 2.6 billion people relied on traditional biomass for cooking for the same year. •The vast majority of these individuals were in Asia and sub- Saharan Africa. Renewable energy can reach even these deprived areas. •For many years, environmentalists have argued for the adoption of renewable energy asa replacement for traditional energy resources. Today, governments and corporations are singing the same tune simply because it makes good business sense. •Investing in renewable energy can also have a massive impact on the government’s expenses. For example, Germany isa major net importer of power. As per estimations, the country could be using only renewable energy by 2050 that could help it save billions of dollars as it would not need to import energy. Increase in Jobs Lower Consumer Expense Universal Access to Energy Good Business Sense Source: UCUSA, RNP
- 10. Copyright ©2014 ShARE. All Rights Reserved 10 Q&A The choice before us is simple. Will we continue to subsidize the dirty fossil fuels of the past, or will we transit to 21st century clean , renewable energy? -Elizabeth Warren !&? Thank You