Greenko group Founder, Group CEO & MD’s Message

 

Founder, Group CEO & MD’s Message

Parallel to being “Large Scale Clean-Tech IPP”, we are already an “Intelligent Energy Market and Deep Decarbonisation Specialist”.

Dear Stakeholders,

I am delighted to share with you, Greenko’s fifth Integrated Report “Making Green Sustainable”. In this report, we present our performance on financial and non-financial aspects, during the reporting period FY 21-22 and Calendar Year 2022.

As you are aware, Greenko is a leading Energy Transition and Industrial Decarbonisation Solutions Company with an operational portfolio of ~7.5 GW; pipeline of 93 GWh per day Integrated Renewable Energy Storage projects across different states in India and building manufacturing facility, 2 GW per year Alkaline Electrolyser and producing 3.1 MTPA Green Ammonia by end of 2026.

Parallel to being “Large Scale Clean-Tech IPP”, we are already an “Intelligent Energy Market and Deep Decarbonisation Specialist”. Developing “globally cost competitive long duration energy storage” and engineering “green molecules” is congruent with our transition to becoming “deep capabilities machine” and “innovation engine”. We are building world’s largest energy storage cloud platform to RE-electrify to transition to Low Carbon Economy.

Greenko delivers solutions to accelerate energy transition and sustainable growth. We have architected our business to add value in the Complex and Mid-Stream segment of the Energy Transition.

Symbiotic Partnerships

Keeping with the UNFCCC’s Race-To-Zero commitment, Greenko has signed ‘The Climate Pledge’ to achieve Net Zero, 10 years earlier, by 2040. Our business model is aligned to be a trusted partner of businesses, cities, regions, and countries that ‘Race-to-Zero’.

We recognise the significance of symbiotic partnerships to co-create solutions for deep decarbonisation. Accordingly, we have collaborated with hard-to-abate sectors – depending on the context, our role varied from providing dispatchable RE solution to substitute power from captive fossil fuel-based power plants to provider of storage and energy cloud service. We formed joint venture with technology providers to manufacture electrolysers. Our partnerships extended to enabling greening of grey molecule manufacturers to the users of green molecules.

We are working along the emerging value chains for Green Metals, Green Chemicals and Green Marine and Aviation Fuel. We are increasingly finding that industrial ecosystems realigning as value chains are decarbonising and symbiotic collaboration in this context is an opportunity, we harness.

Energy Transition - an opportunity for India

India is making tremendous progress to reach the climate goals that it announced at COP26 and subsequently communicated enhanced NDCs to UNFCCC. Today, it is amongst top three markets for energy, electricity, hydrogen, and base materials. The growth trajectory of India’s economy will likely make India the leading market for clean energy in a decade.

India is expected to remain the world’s fastest growing large economy for several more years, which means emissions could rise as our economy grows. But growth need not necessarily be carbon-intensive. While the developed nations must repair and refurbish their carbon-intensive infrastructure, India can decarbonise its growth. By scaling infrastructure, such as renewables, energy storage, zero carbon fuels and chemicals, circular economic approaches to manage materials economy and finally carbon capture, India can maintain a healthy growth that is significantly less carbon-intensive. India has an opportunity to become an exporter of Net Zero Fuels and Chemicals and be the destination for low carbon-intensive manufacturing.

India’s energy market is approx. 200 billion USD of which electricity comprises 18% and in which RE market is about 4 billion USD. In addition, the country’s current energy consumption is 1.4 TWh and is expected to be 2.5 TWh by 2030. Given the opportunity of the role to play in decarbonising future needs, the growth opportunity for RE assets, energy storage and ZeroC fuels is amazing. I believe there is a great opportunity for decarbonising electricity, in parallel to engineering ZeroC molecules to displace oil and gas in many use cases. This will be a critical step in India’s decarbonisation journey. Also, there are significant low hanging opportunities which the country and the industry can harness in near term.

India is blessed with geographical advantage of the Himalayas, Deccan plateau and southern peninsula, diverse climatic conditions and long coastline. The “One Grid - One Nation” initiative that we pursued over a decade is a great resource to fulfil our addition of 300 GW of RE capacity till 2030 if complemented with Intelligent Renewable Energy & Storage Platform.

Electrifying transport and producing zero carbon fuels /chemicals present a promising opportunity for India to become energy independent and even consider the potential of becoming an energy / chemicals exporter over time. India can build more RE and Energy Storage capacity - exceeding its NDC, to become a destination for Low Carbon Manufacturing and a New Energy Exporter.

India’s Solar and Wind generation capacity and its cost effectiveness is amongst the top in the globe. In contrast, the present electricity architecture in India, about 407.79 GW installed capacity to meet 210 GW peak demand, is characterised by low flexibility and high cost, due to the dominant share of coal and in-firm renewables. This amongst other factors pulls down India’s competitiveness as a manufacturing destination. To improve the electricity generation-supply flexibility and to generate power at a lower cost, it is imperative that the country instals Stand-Alone, Make-In India, Long Duration Storage capacity and morph the Renewable Power to Round-The-Clock. In addition, the CEA Report identifies Pumped Hydro Storage System (PSP) and Battery Energy Storage Systems (BESS) as the commercially deployed solutions for providing requisite storage capacity. The new flexible electricity architecture – Low-Cost Storage in sync with RE, drives the cost of power down by 20% in the next few years. Availability of low-cost decarbonised power will:

Position India as the destination for responsible global supply chains

The Global Supply Chains with ‘Net Zero’ goals will prefer ‘Make-In-India’ due to low cost and low-carbon electricity amongst other factors

Catalyse the manufacturing of cost-effective Zero Carbon molecules in India (hydrogen, ammonia etc.) for variety of use cases in industry and transportation in India and outside

The cost-effective Zero Carbon Molecules will not only substitute imports to support an ‘Energy Independent India’ but also could power the decarbonisation of many OECD countries who have declared Net Zero ambition.

Greenko envisions India as a powerhouse for global decarbonisation through transformation of its energy architecture from and to catapult ‘Aatmanirbhar Bharat’ to 5 trillion USD economy.

At Greenko, our focus is to generate more value and share with all our stakeholders. Through sharing value, we contribute to the sustainable development of India and the Globe.

Greenko accelerating energy transition and industrial transformation

We have architected our business to add value in the Complex and Mid-Stream segment of the Energy Transition. By transforming Renewable Energy to a Firm, Reliable and On-Demand Energy, we are capable of deeper industrial decarbonisation.

While significant technology progress is required as we Race-To-Zero, greener technological options are already available in many cases. These need to be discovered and contextualised to situation. Most importantly, innovation and exploration is required to make the existing and known cost-effective, acceptable and accessible. We, at Greenko, call this “Making Green Sustainable”. Unless, the known and mature technologies like pumped hydro storage is adopted with appropriate innovations or new architecture of Green Hydrogen with known alkaline electrolysers and firm RE power is deployed or exploring use cases in specific geographies where green ammonia has near price parity with its grey counterpart, i.e. Making the Green Sustainable - it is not possible to accelerate transition to achieve 2030 goals.

To achieve the transformation of the energy architecture, we have identified projects and investments that include:

About 15 billion USD investment over the next 3 – 5 years in Intelligent Renewable Energy Storage Platform by combining multiple RE resources (Solar & Wind) with Long-Duration, Stand-Alone, Off Stream, Closed Loop Pumped Storage Projects capable of delivering ‘Firm, Schedulable & Dispatchable RE power to meet the long-term Energy & Climate goals of India and its neighbours

About ~ 5 billion USD to produce Zero Carbon molecules at scale through electrolysis of water (including sea water) and other supplemental processes; and supply to industry, gas utilities and transportation sectors in India and outside

These projects contribute to significant reduction in Greenhouse Gases (more than 25 million tonnes of CO2e per year beyond NDCs) and pave the way for India’s transition to low carbon pathway beyond NDCs and ensure sustainable socio-economic development.

Stakeholder Trust

At Greenko, our focus is to generate more value and then share the value with all our stakeholders. Through sharing value, we contribute to the sustainable development of India and the Globe. Our business has been aligned to contribute to UNSDG 7 - affordable and clean energy and UNSDG 13-climate action. Further, our circular economic approaches contribute to UNSDG 12-responsible production and consumption and our commitment to social responsibility contributes to UNSDG 11-make cities and human settlements inclusive, safe, resilient, and sustainable.

Infusion of 20% of equity investment, subscription to Green Bonds of 5 billion USD and interest from many investors gives us the confidence that the stakeholders trust the Company and its business model. Going further, we will be partnering with global upstream clean energy investors and accelerate the energy transition. We are thankful to all the partners who joined us in our challenging endeavour in Pumped Storage and Energy Storage Cloud. We have actively initiated the implementation of pumped storage project at Pinnapuram and began execution at a few other sites.

Our employees and communities have been on our side through this journey, during this tough and trying times. The regulators and policymakers have given us a patient hearing, understood our concerns, and responded very positively. Further, I place my gratitude to the businesses and industry that have made us partners in their climate stewardship journey. Many of them are eagerly looking forward to our firm renewable energy generation to twine us in their NET ZERO EMISSION plans.

Our new ESG Framework

Increasing focus on environmental, social, and governance (ESG) factors is a welcome development. While investor attention is increasing, the regulators in all geographies are requiring adherence to ESG. We have taken steps to be responsive to all these demands including EU Taxonomy.

At Greenko, we have been always addressing ESG aspects diligently, not just limiting to operations in our control but, the activities along the value chain. During the reporting period, we initiated deployment of a structured ESG framework. We will continue to address the risks and opportunities presented by climate change mitigation and adaptation, and circular economic approaches. On social aspects, we will improve diversity, equity and inclusion, and practice innovation across our businesses We are delighted to report our gender pay parity which is 5.4%. Our new products and services improve the sustainability of energy and industrial systems and services. We are curating our customer relationship commensurate to the changing profile of our products and services. On governance aspect, we will continue to reinforce digital and cyber security and deploy enterprise risk management to address the uncertainties and challenges in energy transition. Many a time, the imperative of ESG is recognised and appreciated at the highest level but, the action and momentum is conspicuously absent. At the level of senior management, incentives linked to ESG performance will drive long-term momentum.

Progress against Commitments

New Energy also heralds viable decentralised energy models. The green hydrogen and zero carbon molecules production will be significantly decentralised and would move closer to the use. Such decentralised energy system supported by well distributed water, wind, sun across the Indian sub-continent would offer significant advantages to India in self-reliance, cost-reduction, and equitable distribution of wealth. Further, these can be harnessed by growing entrepreneurship in India. With this decentralised green hydrogen and zero carbon molecule business models, we are exploring elements of Greenko 4.0 that we envisioned to reach by 2025.

We, at Greenko, realise that we are a salient part of electricity sector transformation that makes clean, reliable, and affordable electricity and reinforces #Atmanirbharbharat with #EnergySecurity and #EconomicStability. Further, we are working on the novel manufacturing architecture for zero carbon molecules with domestically manufactured cost-effective electrolysers, for use in a range of industries across the energy chain, including the production of green ammonia, methanol, and other sustainable fuels. New Energy solutions would drive 50% of our long-term investments in the following years and contribute to 50% of our revenues thereafter. Keeping with our commitments, around 30% of our long-term investments during 2020-21, are in the new energy solutions viz. pumped storage projects and intelligent energy platforms.

We have been diligently picking organic and inorganic growth opportunities. Strategically, we have improved our access to hydro power in different geographies of India. Our equity stake in Teesta Urja Limited with an underlying asset of 1,200 MW of Hydropower project in North Sikkim and acquisition of assets of 121 MW is a part of our transformation. Besides pursuing inorganic opportunities, we continue our pursuit of developing greenfield projects.

We continue our focus on high capital productivity and accordingly, we made investments in operation and maintenance through intense deployment of digitalisation. We have been improving our asset performance and reducing the O&M costs of our wind generation under the WINSOM program. Besides significant investment focus on Integrated Renewable Energy Projects, we have continued with the renovation and modernisation of some of our wind assets. During the reporting period, we sold 5.68% of our power to the B2B segment as against 7.19% in the previous year and this demonstrates our ability to access energy users directly, which will be a salient feature in our transition to Greenko 4.0.

Our commitment to complete the IRESP in 36 months is based on a solid edifice of PPP - employee commitment, peoples’ cooperation, and support of the government. We are confident to achieve the target and complete our first IRESP by Calendar Year 2023.

In the reporting period, we achieved per capita training hours of 39.33 and retention rate of 89.38%. Further, we have added significant new skills, knowledge and innovation capabilities through recruitment and corroboration. Our collaboration with C-MET to establish Centre of Excellence in Electronic Waste Recycling has resulted in development of two new technologies and we strive to maintain and enhance the same in the future. These efforts, in combination with innovation hub activities, goes a long way in upskilling and aligning the organisation to be “High Capabilities Machine” and “Innovation Engine”. The number of hours devoted to the safety training has significantly increased over the previous year. We continue to achieve zero fatalities in this reporting period. Moving forward, we will focus on improving retention in the age group of 30-40 years.

We owe our success to our external stakeholders, including suppliers and customers. More than 80% of our suppliers have been working with us for more than three years. As the new initiatives are technology-intensive and require deep expertise and experience, we are joined by many new partners. We are happy to realise that the satisfaction indices of our suppliers and customers are 80% and 95% respectively.

Our collaboration with C-MET to establish Centre of Excellence in Electronic Waste Recycling has resulted in development of two new technologies.

Our commitment to complete the IRESP in 36 months is based on a solid edifice of PPP - employee commitment, peoples’ cooperation, and support of the government. We are confident to achieve the target and complete our first IRESP by Calendar Year 2023.

Our Commitment to Community

Our community development initiatives are impacted and are realigned due to the pandemic. The number of beneficiaries reached to 2,02,390. Such an increase has become possible by strategic targeting and effective investment. Going forward, we would measure both number of beneficiaries and the benefit delivered.

We realise that the energy transition and industrial transformation requires significant efforts in R&D, Education and Skilling. To address this, Greenko has partnered with IIT Hyderabad to establish Greenko School of Sustainability and Climate Change. The school, in addition to conducting doctoral and post graduate programs will also work towards extension of this program to select engineering and technology institutions and skilling for the just energy transition.

Greenko is excited “Making Green Sustainable” congruent with UNSDGs and the socioeconomic progress of India. We seek active engagement of all stakeholders in our progress and your suggestions & views are valuable to us in further improv

ing our performance and contribution.

Anil Kumar Chalamalasetty

Founder, Group CEO & MD