Welcome to Soham 2.0

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Soham’s official website is soon going to be on the Web 2.0 platform. Which means, it will be integrated with all the social networking sites and this blog. We are changing because the world is evolving rapidly.

Web 2.0 is sweeping online communities and websites because of the revolutionary manner in which people get to interact in ways never thought possible. It is literally unstoppable now as it is radically changing online business models. Now corporates are being given a voice and a platform to express their views in a bolder way than ever thought before. There is no doubt that interesting times lie ahead and great opportunities loom large for brave corporate organisations who are willing to go this route. And we clearly don’t want to miss the action.

If Web 1.0 was about information retrieval, Web 2.0 is about information sharing by anonymous users (YOU) through social networking sites (Facebook, Twitter, Google+, etc.), user-created websites, self-publishing platforms (WordPress, Blogspot and so on), tagging and social bookmarking.

If a Tsunami strikes anywhere in the world, people measure the onset of it and even create a timeline of its exact occurrence by measuring the magnitude of Twitter posts. If the American president makes an important decision, there’s a twitter wave of people reacting and discussing it threadbare. In the world of Web 2.0, there’s no censorship to prevent people from voicing themselves. That is its true power.

Take blogs such as this one. Inner Strength is a remarkable way to put out my word to the world at large, without sending out a press release to media outlets, who may or may not choose to publish my point of view. Which is why CEO and MD blogs are a good way to usher in transparency and create a platform for companies to give their side of the story. For corporates, this is indeed manna from heaven. Many already use a web search facility on their corporate websites that aggregates all the things people are saying about it in ‘real time’. This way, they not only get feedback, but can also respond to it on time, every time. No longer is it a one-sided affair. It is this two-way interaction of Web 2.0 that has radically changed the way we communicate with ourselves and the world at large.

In essence, the world has become truly democratic with Web 2.0. It has become the voice of the voiceless. And therein lies its intrinsic appeal.

We, at Soham, have embraced Web 2.0 with all our heart, making us more scalable and relevant in today’s technology-driven times where you take off today and arrive yesterday!

Karnataka leads Renewable Energy usage in India

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Today is May Day, more popular as Labour Day, when we take a day off work and celebrate our ‘8-hour work, 8-hour rest’ work regime. I greet every Soham employee on  International Workers’ Day and urge you to labour selflessly for the wellness of our future generations. That’s what Soham stands for. A clean, green future for our next generation!

Sorry for my month-long absence from the blog. I am just back after a hectic and fruitful month at Harvard. And just when I am back, I hear some great news. The well-known environment watchdog, Greenpeace reports that Karnataka achieved 122% of its green purchase obligation. It’s laudable because our state has emerged a frontrunner while Delhi, our country’s capital, has proved to be a laggard.

The report ranked the performance of all the states on RE supply where Karnataka was fourth among the seven states that achieved its Renewable Purchase Obligation (RPO) target. The other states that did well in RE generation were Meghalaya, Nagaland, Uttarakhand, Himachal Pradesh and Tamil Nadu. They not only led from the front, but also ended up generating over and above the targets set for them. However, there was the sad news, too. Among the 29 states examined, 22 failed to meet their RPO targets, which led to a loss of over 25% electricity that could have been generated from RE sources last year.

The news is heartwarming, but not surprising to me. Last year, Karnataka topped renewable energy usage in the country. This was revealed through a study by PricewaterhouseCoopers that pointed out that Karnataka is emerging as an attractive destination for wind and solar energy sectors. However, it also mentioned that challenges like land acquisition and clearances, power evacuation (moving power from generation source to load centre), relocation of cancelled projects and strict enforcement of Renewable Power Obligation (RPO) need to be addressed to realise the true potential of the state. This year’s report suggests that things are moving in the right direction. But more needs to be done.

There is a need to implement new policies to make renewable resources, a more viable option. Infrastructure needs to be improved and we need to explore how technology can help balance the mix of fossil and renewable energy consumption. I would also urge the Energy Department to start harvesting power from garbage as it is done in the developed countries. I believe energy gas pipelines and renewable forms of energy should co-exist by 2017 to help the country get rid of its power problems.

Why investing in small hydro makes financial sense

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There are so many myths and fallacies associated with small hydro. I would like to dispel those myths and drive home the point that investing in small hydro makes perfect financial sense.

But first, some simplifications. Small hydro is power generated through the force of water with a generating capacity of up to 25 megawatts. With minimal reservoirs and civil construction work, small hydro does not impact the environment compared to large hydro. Ofcourse, this also depends on the balance between stream flow and power production.

And the best part? Not only does small hydro produce cleaner electricity than fossil fuels, but as the water passes through the generator, it is directed back into the stream and leaves almost no impact on the surrounding environment. It’s a great resource for all countries to tap into, given the long life of the equipment and the low costs involved.

No wonder, India is one of the largest producers of small hydro power (SHP), which makes up 13% of the total renewable energy generation capacity in the country. However, only 3.4GW is being generated compared to a potential of 15.4 GW. That means, almost 80% of the energy potential still remains untapped.

It makes great sense to invest in small hydro power because the technology today is far superior and allows for generating high PLFs (plant load factors) despite seasonal fluctuations. The other advantages include a long project lifetime, relative flexibility in the sale of power, favourable government regulations that favour the private sector, the competitive cost (Rs 3.5/unit) and the project’s focus on rural development.

India is home to quite a few places where small hydro can thrive. And these include the Himalayan Region (Himachal Pradesh, J&K, Uttarakhand), the North Eastern states and the Western Ghats (Karnataka). And compared to large hydro power projects, small hydro scores because it’s cost effective, less affected by social and environmental issues, has lower gestation period due to fewer clearances, a shorter development cycle, meets the power requirements for remote and off-grid areas and has the potential for captive usage.

The regulatory support comes from four main avenues. The MNRE offers upfront capital subsidy and technical assistance. There is support for older projects from the central government and state subsidies for all kinds of projects, old and new. The developing REC market plays a key role in the sector’s growth potential. The focused developers and aggregators consolidate the capacity, making small hydro quite an inviting field to venture into.

But, wait. Like every other field, the hydro sector has its set of peculiarities. To begin with, it’s quite a fragmented industry. The portfolio of projects result in operational and developmental synergies. It is a highly capital intensive business. There is a constant need for private equity investment. And this results in constant asset churn, leading to much activity on the mergers and acquisitions front.

Which brings me to the sources of finance. Well, you have Equity. Take that to mean, developers, private equity, Mezz & Carbon Financing. And then, there’s Debt – you can borrow from PFC, REC, IREDA, PFIs and commercial banks. And lastly, you have the others (multilateral, Export Credit Agencies and Vendor Financing) as a last resort.

Now you know why it makes sense to invest in small hydro.

More power to our collective Green Thumb!

P.S: Here are a couple of charts that showcase the comparative cost matrix while another chart shows you how much it costs to set up a small hydro project and gives you a breakdown of capacity generation of small hydro vis a vis other alternative energy sources like biomass and wind.

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APPL: Taking you on a photo walk

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If there is one project that keeps playing in our eyes, it’s the way we commissioned our Ambuthirtha power project (APPL).

Here is a chronological order in which it was set up and finally made operational in 2007. Take a look at the scene ‘before’ and ‘after’ the project became operational, and you will realise that setting up a 22 MW hydro power project was no small potatoes.

Our photo story begins with the ground-breaking pooja and dwells on the construction of the powerhouse, surge shaft, pressure shaft, switch yard, tunnel and the dam. After much stress and sweat, and overcoming two flood devastations, when the transmission finally began, we drew collective sighs of relief.

For the record, this project is located near Jog Falls in Shimoga. Jog Falls is created by the Sharavathi River which rises at Ambuthirtha and falls from a height of 253 m (830 ft), making it the second-highest plunge waterfall in Asia.

APPL is every Soham-ites’ pride. And rightly so! It is our best ‘before-after’ story to tell everyone :)

Without further ado, here goes the photowalk…

Happy viewing!

CSR is no joke!

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An employer tells a job applicant that he is looking for someone who is responsible. Unblinkingly, the applicant says, “I’m the one you want. On my last job, every time anything went wrong, they said I was responsible.”

I am starting with a joke to talk about CSR because some people view CSR as a joke. But when these very people spend time with the CSR team of top corporates like IBM and SAP, they realised that there is a real opportunity here. With spiking energy prices and global warming, CSR is being re-assessed. Talking about efficiency is no longer the game. Now the CFO expects the organisation to actually deliver it. Sustainability is not just a buzzword any more, which means CSR is not window dressing any more either. CSR is becoming a window itself – an important gateway between the business and us: individuals, customers and stakeholders.

We need to move beyond good intentions. And Soham began doing this even before we made our first project operational. Pray why? Because we believe that Corporate Social Responsibility is both a mindset and a method. As a green renewable energy major, I feel an immense responsibility to all my stakeholders, internally and externally.

CSR is more than aligning strategy, it is about identifying and taking the steps that lead towards outcomes. It is identifying the leaders who can bring both business and CSR visions together, and it is about evangelising the learnings, successes and even failures along the way.

At Soham, CSR enables us to remain focused on the community and people, especially our focus being students, India’s future. We are investing in community-related activities called ‘Vidyas’ to empower ordinary citizens. All our CSR activities are based on the principle of helping people to help themselves. Our flagship ‘Vidya Ganaka Program’ aims to equip students in rural schools with access to online education, building life skills and self-confidence. We are doing this because sometimes, we need to go beyond
CSR and improve access to quality education and healthcare.

Now you know CSR is no joke. It’s the corporate template we live by.