Thermax, Us Firm In Energy Venture

The Rs 600-crore Pune-based Thermax group has joined hands with Energy Performance Services Inc, a subsidiary of the $4 billion US-based Peco Energy Company, to form a 50:50 joint venture called Thermax EPS Ltd (TEPS). The joint venture company will offer energy efficiency solutions.

The energy services company (Esco), as the concept is known in the west, is comparatively new to India and is significant considering the acute power shortages India is facing, coupled with a low efficiency in energy use.

The mission of Esco is to implement performance based services by providing a complete package backed by a guarantee on saving of energy, Thomas K Dreessen, chief executive officer of Energy Performance Services Inc, said.

 

In the event of assured savings in energy not being achieved, TEPS will make good the loss. All savings above the assured figure will be shared by TEPS and the customer in a pre-agreed proportion.

The financing of energy cost reduction measures would be arranged for the customer by TEPS through finance or leasing companies like Thermax Capital Ltd, or through special programmes of financial institutions like the ICICI, IDBI and USAID.

The joint venture company in India will target the high energy user industries like aluminium, cement, steel, hotels and large building complexes. It has already initiated dialogue with companies in these core sectors and is close to signing some deals, company officials indicated.

In the first year of operation, the company hopes to generate business worth Rs 12 crore, which is expected to jump to Rs 150 crore by the year 2000.

The joint venture is a logical extension of Thermaxs deep involvement in the core sector of energy, said Anu Aga, chairperson of Thermax group.

Abhay Nalawade, managing director of Thermax, pointed out that the large potential that exists in India for energy savings has been elaborated in the eighth five year plan document which estimated that 5,000 mw of electric power and 6 million tonnes of petroleum products can be conserved through a national energy efficiency programme.

Even if the emerging Esco industry in India captures only 15 per cent of the conservation potential, he said the total revenue of the industry would be Rs 450 crore per annum at a cost of Rs 30,000 per kw saved.

The energy cost reduction measures offered by TEPS include, measures to recover energy lost as waste or exhaust, measures to improve efficiency of energy use in processes, substitution of high priced energy sources by cheaper fuel alternatives. The initial share capital of the joint venture company will be Rs 1.90 crore which will be hiked as the business expands.