You are here: Home » Companies » News
Business Standard

Reining in power guzzlers

Energy mgmt firms help corporates slash their power bills

Rajiv Rao  |  New Delhi 

are bonafide champions of the ‘green’ industry as they go about slashing power bills and saving piles of cash for corporates.

Ramandeep Singhand A. Vaidyanathan, two Bangalore-based entrepreneurs could not be more different. Singh, 39, is a supremely confident, occasionally bombastic founder of Autoboxx, an energy management company, given to saying things like “My next company is going to have the combined market cap of Google, and ” Vaidyanathan, 52, on the other hand is more measured and soft-spoken, and looks positively aggrieved when talking about things like the impact of (CFCs) on the environment.

A. VaidyanathanWhat the two do have in common, however, is a genuine concern for wasteful energy consumption and the compulsive urge to opportunistically innovate, market and sell deceptively simple, ground-breaking solutions in a country that is very likely heading towards a massive energy crisis.

Autoboxx’s Singh, a self-dubbed ‘South Indian Sardar’ has devised a ‘smart box’, of about the size of a brief case, which hangs on a wall and controls all the air conditioners and lights in an ATM kiosk, thus limiting the reliance on poorly paid and meagerly incentivised guards who are responsible for doing these things. It also monitors grid power access, sends information about voltage spikes, records ambient temperature and reports the condition of the UPS to a central server which managers can evaluate later. If there’s a grid meltdown, an inbuilt battery pack allows it to send alerts to specified people.

* Indian industries pay some of the largest energy bills in the world, relying heavily on costly diesel generators
* Energy demand is to grow more than triple in twenty years, much of it fueled by poor-quality local coal
* India's potential energy efficiency market is estimated at more than $3.1 billion 
* Most of this potential in India lies with SMEs—some 3 million—who churn out 60% of India’s GDP—but targeting them is a challenge

The box’s most cherished attribute, however, is its ability to bring smiles to the faces of operations’ heads, having shaved off 25% of their monthly electricity tab.

HMX’s Vaidyanathan —or ‘Vaidy’ as he is popularly called—is an air-conditioner man, a long-time former Carrier franchisee and a mechanical engineer by training who has developed a ‘green’ air-conditioner called an Ambiator that uses a cooling module made up of a polymer that Vaidy invented on the rooftop of his house. This polymer is kept constantly wet with a water drip which cools the air that is passed through it. It can provide less than 26 degrees celsius temperature almost all-year round with relative humidity in the range of 60-70%.

If a regular AC touches 8 on a scale of one to ten in terms of cooling efficiency and an air cooler is 4, Vaidy’s Ambiator delivers a 6.5 or a 7 in terms of comfort. In doing so, however, it uses 60% less power, costs a fifth less than an AC-driven cooling solution and doesn’t vent noxious, ozone-killing CFC’s into the atmosphere. It also provides 100% fresh air on a continuous basis versus 10% for ACs—crucial for factory floors and large central wells in big offices.

 “It’s been a great experience,” says Vineet Edaghara, head of plant engineering and infrastructure at Volkswagon. The German car-maker decided to retro-fit its main plant in Pune with the Ambiator and found it a Godsend. “We didn’t expect it to be so good, especially since the Germans are very particular about the kind of technology they use,” he adds.

HMX and are both ‘Energy Efficiency’ companies—a dynamic global industry that is part of the Cleantech revolution currently sweeping the world, where solutions from solar to fuel cells try to address both shortage of energy as well as the spectre of climate change. Last year, Energy Efficiency ranked third  globally, trailing only solar and clean transportation in terms of money invested, according to San-Francisco-based Cleantech Group.

It’s easy to see why this sector is such a darling amongst investors. Instead of spending large amounts of money on R&D in order to design alternative forms of power like most other sectors in the cleantech arena, in this sector approach the problem from a much simpler angle of attack—by simply limiting the amount of power that consume. With oil and gas prices see-sawing and with the energy tab making up at least 10% of production costs, Energy Efficiency is a no-brainer of an industry to get into. With India’s chronic—and rapidly burgeoning power problems—one would imagine that Venture Capitalists are making a beeline for in this space.

A Bangalore-based company that devises remote management solutions for passive infrastructure solutions for passive infrastructure equipment, such as cell towers or renewable energy power plants. Neureol’s solution systems detect aberrant behaviour patterns,  generate alerts, and prevent situations that lead to down-time or inefficiency on a 24x7 basis. 
A Hyderabad-based company focused purely on lighting controls for increased efficiency and savings. The company has  patented infrared sensing and micro controller technology for automatic switching and dimming solutions for indoor and outdoor applications, including street lights. 
A Bangalore-based competitor to Autoboxx, but focused on different customer segments, such as telecom, utilities and construction Like Autoboxx, the company collects data remotely and uses domain specific analytics to come up with solutions by using proprietary hardware, embedded software and web-based applications using wireless cellular networks. 
A Hyderabad-based company that uses its patented technology to harvest sunlight through pipes so that the interiors of buildings such as office spaces or museums can be lit naturally for 10-12 hours a day. The company says that unlike solar PV systems, these products are cost efficient. 

Not so, apparently. “I got boxer’s knuckles while trying to attract people to my company, but no one would listen to me,” says Vaidy. “VCs are lovely people to talk to. Just don’t trust their smiles,” adds Singh who even after proving that his technology worked, and receiving an order for Rs  2 crores worth of business, was unable to satisfy the VC who was at the time eyeballing his company for a possible deal. Instead, Singh was asked to go out and demonstrate more traction. Each time he returned with results, the answer was the same, upping the ante on the previous commitment.

This may seem like strange behaviour considering the huge, untapped opportunity in this space —$3.1 billion worth, according to the World Bank. After all, Indian industries pay some of the highest energy bills in the world. Moreover, grid power is fickle and firms spend a fortune on diesel generators and fuel. The problem is, most of India’s potential in cutting power consumption lies with the 3 million or so small and medium enterprises (SMEs) which power 60 per cent of the country’s GDP. Implementing projects across such a fractured terrain is a herculean task. “We’re still trying to figure out how to unlock the potential in this sector,” says Saurabh Lall an analyst with the World Resources Institute in Washington, DC

Singh eventually became fed up with many in the VC community and their sole fixation on pumping up Return on Equity numbers rather than the environmental benefit and energy savings that Autoboxx’s solution provided. So, he continued to bootstrap, won more orders, picked up funds from friends and family and kept trucking. Today, has booked Rs  2.2 crores over the past two years, most of it coming from boxes at 458 ICICI ATM kiosks at an average cost of Rs 20,000 each and has an average operating margin of around 25%. The box pays for itself in terms of reduced energy bills in twelve to eighteen months which is probably why other ATM vendors, retail chains and bank branches such as Chaipoint, Yes Bank and Euronet have signed them up.

How does one arrive at products like Ambiator? When does that ‘eureka’ moment arrive? For both these entrepreneurs, it was more about keeping your ear to the ground and nose in the air in order to sniff out opportunities to exploit, while motivated by a genuine need to make a difference in energy consumption.

One night, Singh was driving around Bangalore in his 1.6 Liter Opel Astra (one of two prized possessions in his life, the other being his pet Boxer ‘Saint’) with his childhood buddy and neighbour, architect Shivakumar (a co-founder of the company), when they stopped by an ATM kiosk with its lights ablaze. When Singh entered to take out some money, he was hit by an environment, so frigidly tundra-like that he left in a tearing hurry, partly to escape frostbite, he says, but also because a germ of an idea had begun to take seed: what if you can automatically control all the variables in an ATM kiosk so that the company saves money and customers avoid pneumonia?

Vaidy’s idea was not so much the result of one epiphanic moment but a result of connecting the dots. When he was still with Carrier, one client told him that the temperature was simply too cold. Another complained that employees in the central well of his large office were getting headaches because of a lack of fresh air. Finally, the Kyoto protocol that was taking place at the time underscored issues such as energy usage and the environment. Something clicked. Instead of hiring a team of engineers, Vaidy rolled up his sleeves and went to work and in a year or so, the first of his ‘heat exchangers’ was born.  “If you understand the core of a principle you don’t need a million dollar lab. Quite often in life, you may have a lot of know-how, but do-how is equally important,” he says.

For struggling entrepreneurs, attracting investors is  a tension fraught project of forging an alliance—really, a marriage—with the best kind of partner who can help organically grow the business.

Right after Singh’s ATM kiosk experience, he did the most natural thing he could think of, which was to rush to family friend K. Venkatasubramanian, a former scientist at National Lab, and an embedded space guru with 25 years of experience working out solutions for in the defence and aerospace arenas, including Bharat Heavy Electricals Ltd (BHEL) and Hindustan Aeronautics Ltd (HAL). ‘Venkat Sir,’ as Singh refers to him, designed the embedded hardware part of the system while Singh wrote the software code. In a matter of months was born.

“Raman is a person of passion, a go-getter”, says Venkatasubramanian. “When he takes up something, he doesn’t leave it easily”, he adds.

Vaidy wasn’t so lucky. It took him a couple of years to find his suitor in the form of Anuj Bhagwati, head of A.T.E. a textile manufacturing concern. Bhagwati, who is an MS in Applied Physics from Cornell University in the US, decided to deviate from the family’s traditional businesses and instead entered the Cleantech sector with a 51% stake in HMX. In Bhagwati, Vaidy found a fellow science mind, truly interested in delivering novel technical and market solutions rather than investment exits. In turn, Bhagwati found in Vaidy the three qualities that he sees as essential to being a successful entrepreneur: “Vaidy has tons of passion which is perhaps most important. He has enormous self-belief. If you don’t have that you won’t be able to sustain the hard knocks that you will inevitably experience. He has perseverance which you need to be able to mobilise resources.”

Today both have quality customers and an enviable future. The air conditioner market is poised to grow to $10 billion in ten years and HMX, which booked 12 crores last year, and anticipates booking 20 crores this year and 40 next year is poised to be an important specialty player in this market. Meanwhile, is poised a tremendous boost. According to Retail Banking Research, the ATM industry is going to add another 100,000 machines to the existing 72,000 in the next four years. Moreover, is also targeting larger spaces like restaurant chains, cafes and retail spaces which are all expanding furiously as Indian’s wallets become fatter.

In a few decades, India’s energy needs will go through the roof and its homes , offices, and factories will be forced to retrofit themselves with efficient lighting and appliances, embedded systems and advanced metering infrastructure, all of which will be plugged into a networked smart grid. hoping to storm this market would do well by learning from the experiences of these two entrepreneurs.

First Published: Thu, July 07 2011. 00:15 IST