Smart Grids: Growth business in Indian energy sector

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1 SUMMARY of the Team Finland Future Watch Session Smart Grids: Growth business in Indian energy sector September 17 th, 2014

2 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).

In the session, we also defined the major barriers for the market entry and ground rules to successful in energy business in India.

3 Presentations Indian Smart Grid market developments and future business potential for Finnish companies Rekha 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 2015 Mr Reji Kumar Pillai (President of Indian Smart Grid Forum, ISGF) Case Ensto, doing business in India Juhani Hovilehto, President - India Operations, Ensto Utility Networks. Case Viola Systems, doing business in India Jyrki Penttonen, CEO, Viola Systems

Projects and India Smart Grid Week 2015 Mr Reji Kumar Pillai (President of Indian Smart Grid Forum, ISGF) Case Ensto, doing business in

4 Workshop (done in all participating cities) Goal of workshop was to define 1) Biggest business opportunities in Indian Smart Grid markets 2) Biggest Challenges in market entry 3) 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

challenges. Team in Delhi also defined the ground rules to be successful in energy business in India.

5 1 2 3 WORKSHOP RESULTS Team Finland Future watch Smart Grids: Growth business in Indian energy sector

6 HELSINKI TEAM Biggest business opportunities for Finnish companies in Indian Smart Grid markets 1. 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

automated measurement solutions by Viola Systems). Brings us back L1 (lowest price category) and large scale.

7 HELSINKI TEAM Biggest 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

opportunities (For solar roof top project in office buildings, please contact Jatta Jussila, CLEEN Ltd (jatta.jussila@cleen.fi) 4.

8 HELSINKI TEAM Biggest 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 partners 3. Defining IPR strategy 4. 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/ codevelopment of system with the customer and other service providers 9. The scale is so huge that there s no chance with renewable

Forms of tenders (pricing 1st criteria) 7. Access to energy forums and value networks 8. How to make value-based selling?

9 JYVÄSKYLÄ TEAM Biggest business opportunities for Finnish companies in Indian Smart Grid markets 1. Small grid in rural areas 2. Single state project to avoid RFP process 3. Small windpark 4. Micro grid wind components 5. NG development funding What are the biggest challenges/ obstacles to enter to the market 1. Local partner 2. Building consortium with local partners 3. Financing 4. Price competition 5. To build the first prototype windpark with WS- Turbines (100 pc windside windmill windpark) Needed actions 1. Contact list of potential partners (SMEs) in India & Finland 2. CLEEN Ltd SGEM, linking SMEs to SGEM 3. 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

Price competition 5. To build the first prototype windpark with WS- Turbines (100 pc windside windmill windpark) Needed actions 1. Contact list of potential partners (SMEs) in India & Finland 2.

10 VAASA TEAM Biggest business opportunities for Finnish companies in Indian Smart Grid markets 1. Delivery/sales of systemic solutions instead of single component(s). Biggest challenges/ obstacles in market entry 1. Tough price competition 2. 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 1. A list of Finnish SMEs with experience and presence in Indian energy business (especially companies in the of electricity solutions).

Finding right contacts and cooperational partners. Contacts play a crucial role when operating in new markets. 3.

11 DELHI TEAM Best business opportunities for Finnish companies in Indian Smart Grid markets 1. Pilots and non-pilot projects Smart City Project (Key Features of Indians 100 Smart City ( 100 Smart City Project-Cheer for Modi 3. Negotiated projects 4. JNNSM solar ( 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

com/modi898). 3. Negotiated projects 4. JNNSM solar (http://mnre.gov.in/file-manager/userfiles/draft-jnnsmpd-2.pdf) 5. Digital India (Broad connectivity) 6.

12 DELHI TEAM Ground 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 projects 3. 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 state 6. 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 consortiums 9. 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

Identify projects, needs etc. with the help of local expertice (such as ISGF, Finpro, Embassy) 5. Very important: Field studies to validate the current state 6.

DELHI TEAM Ground rules to be successful in India Smart Grid business continue 10. Learning from /cooperating with other EU countries Sweden, Netherlands, Swiss 11.

13 DELHI TEAM Ground rules to be successful in India Smart Grid business continue 10. Learning from /cooperating with other EU countries Sweden, Netherlands, Swiss 11. India activities other Scandinavian countries IFBF, Big Finnish companies take a role of consortium leaders 13. Active presence in Indian Smart Grid forums. How Finland will be part of the India SmartGrid week March 2015 presence/ active sessions/ pavillion

India activities other Scandinavian countries IFBF, http://www.ifbf.in/ 12.

14 Interested to know more? Contact us Future Watch Team in New Delhi Silva Paananen (silva.paananen at promade.fi) Future Watch Team in Helsinki Heli Karjalainen (heli.karjalainen at tekes.fi) Laura Nurmi (laura.nurmi at tekes.fi)

THANK YOU for participating to The Future Watch session! Aki Koivistoinen Director, Business Evolution +358 50 309 4298 aki.koivistoinen@dazzle.

15 THANK YOU for participating to The Future Watch session! Aki Koivistoinen Director, Business Evolution LinkedIn_aki koivistoinen Dazzle Ltd Salomonkatu 17 B 12th floor Helsinki, Finland Co-designing next practices in innovation, business and strategy

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