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One such practice that makes what is possibly the most significant contribution to this global movement is the production of green or renewable energy. Luckily for businesses, making this switch to greenenergy is a win-win situation because by harnessing sunlight, a freely available resource that Sri Lanka has no shortage of, they can minimise their environmental impact while saving on the high cost of electricity bills, making industries far more profitable in the long run.
The Daily FT spoke toEnergynetManaging DirectorRamesh Karunaratneabout the importance of green energy in today’s business environment as well as the solutions his company has to offer in terms of making solar panels more affordable and accessible to local businesses and even residences. Following are excerpts:
Q: Tell us a bit about the products and services provided by Energynet?
A:I think for us at Energynetit is all about clean, green electrical power. I believe that it’s the lifeblood of today’s businessesbecause they are so dependent on electronics and IT.Not only should power be clean, it also has to be green, because each of us has a responsibility towards the sustainability of our planet and towards reducing our carbon footprint.
If you ask about our product range, it goes from electrical energy audits to consultancy to battery backup systems, UPS systems and renewable energy. The renewable energy solution that we provide is primarily Solar PV.
Energynet is a fully-owned subsidiary of Fentons. Fentons is the oldest electrical and electronic engineering firm in Sri Lanka. It has over 94 years of experience in engineering services for buildings and has gained a reputation of being the top building systems engineering company that isalso responsible for innovative solutions and systems integration inICT infrastructure.
Fentons actually pioneered renewable energy in Sri Lanka because they were the first company to put up a mini-hydro system in the country in 1995 which was in Talawakale. I got involved in various methods of clean power and in 2000 we separated out as Energynetand our product portfolio is mainly into clean green energy.
Q: Why should being energy efficient matter to businesses?
A: Electrical power is the lifeblood and the oxygen of today’s businesses and I feel that a lot of companies tend to concentrate and focus more on the tangible areas of business trying to improve their competitive advantage and very often they don’t look at the electrical power,even though there is a lot of saving that can be achieved by reducing your electrical energy cost because electrical energy is very expensive, especially in Sri Lanka where, I understand, it’s about the highest in the region.If businesses can reduce their electrical energy wastage, I feel like it can have a financial impact on their bottom line and make the products that they manufacture more competitive in a global market.
If you have a properly designed electrical system that uses the correct size of cable or the correct switch gear,the heating losses that transfer as energy wastage can be reduced. I have seen people in the IT industry making a conscious effort to switch from the older CRT display computers to the new LCD screens and by changing that, they have a huge impact on their electricity cost so even while they increase their capacity expanding with more people their electricity consumption can come down.
You can put in practices to switch off computers when people leave offices. You can design the building in such a way that you use a lot of natural light so that you reduce your electricity usage. The lights you use can be LED lamps instead of the normal traditional lamps. When all of these are put together you can keep reducing your electricity cost and any wastage.
Not only should businesses be concerned about clean energy but also green energy. If a cheaper alternative or source of electricity is available then it must be exploited. Solar energy is definitely cheaper than buying the power from the grid.
Q: How conscious are local business owners about this importance of clean energy?
A:In my opinion, not enough. Electricity supply companies (which in Sri Lanka isonly the CEB) cannot guarantee clean power. When you look at power quality, you have voltage drops, voltage rises which we call surges, spikes, noise and ofcourse, blackouts.Most companies consider only the blackout or power outages because they are the most visible out of all these irregularities.The others that I mentioned are often forgotten.
If you take the voltage drops and the surges, these have a direct impact on the lifetime of electronic components which in today’s context, is almost everything. Even if you go into a factory or if you go into a manufacturing facility, everything is based on electronics and if the supply is not clean, these componentswill have a shorter lifetime and you have premature failures.
In a manufacturing environment, sudden prematurely failure is catastrophic. We have seen factories having to throw away large amounts of material because the machinesstopped operating.Noise on the electrical line affects the processes inside computers and can cause malfunction. In a technical term we call it the ‘bit error rate’. You will never attribute any of these to poor quality power.
Even if the machine fails prematurely you will never think it is because of the power, and think it is poor quality equipment that has failed prematurely. We have seen industries and manufacturing organisations save money in their maintenance cost by ensuring that their electricity is clean.
Q: With 15 years in the industry, since the formation of Energynet in 2000, what sets you apart from the competition?
A:Energynet was formed in 2000, but the experience of our team in clean, green electrical power has its origins within Fentons. Renewable energy systems are capital intensive and have long payback periods.The minimum lifetime of a Solar PV System is 25 years while with other renewable energy systems the life time will be even longer. It is therefore of prime importance that businesses select well-established companies that will continue to support them during the lifetime of the system.Fentons, with its 94 years of experience in electrical engineering and its pioneering efforts in renewable energy together with Energynet, has no comparison in Sri Lanka.
Further, I believe that the team at Energynet with its roots in an engineering company like Fentonsis dedicated to providing the best engineering solutions to the client whilst most of our competitors are more marketing and trading organisations. Our capability to understand client requirements and design suitable systems is far greater.
Our partnerships have always been with tier 1, global manufacturers like GE, ABB, SMA and Chint. This also sets us apart from others. So in terms of giving very solid engineering solutions we are better positioned.Since we import directly from manufacturers and due to our volumes and logistics, we are able to import at a much lesser cost. It is these that set us apart from our competitors.
Q: Completely switching to solar energy can be a huge financial commitment. How does your company make it more affordable for local business owners or residential clients?
A:Yes, putting in a solar PV is expensive, but from the time we entered the solar PV market, our intention was to make solar PV affordable as possible to a majority of users.
If you look at the Sri Lankan market we have roughly about five million households. Out of those five million households, I think it’s only about 5% which actually have high electricity bills. When I was having my initial discussions with the CEB and LECO they were telling me that the cost per kilowatt of solar power was in the range of about Rs. 350,000 and that was far too high. They asked if we could reduce it.Now, after we entered, you can see how the market has reacted to our competitive pricing. Others feel threatened and the current cost per kilowatt of solar PV has dropped to about Rs. 250,000.
We want to continue to drive the price down further and make it more affordable. We do this by using our connections with our suppliers. Most of our competitors operate through global wholesalers or distributors. There are no suppliers in the Solar PV industry for panels who sell directly to an installer. They sell to a global wholesaler and it’s from the global wholesaler that country installers have to buy the material, but what we have done is thatthrough our contacts we have managed to source directly from manufacturers. As a result we are more competitive. Also our volumes are higher and because we are involved in a lot of businesses and gain economies of scale through logistics. We have used all of this to make the solution more competitive and affordable to the Sri Lankan market.
Q: What industries are underserved and would benefit from your services?
A:I think that the residential market would be best served because of the tariff rateis the highest for residences. I believe that commercial establishments which are on GP1 and GP2 (that is the classification the CEB has given for their tariff structures)can have benefits switching to renewable energy and solar PV. The other sectors like hotels and manufacturing industriesare on the 11 and the I2 tariffs, which are more of ‘time of day’ tariffsin which they have different rates for the electricity and during the day.
During the day time, when the solar PV is working, the rates for the hotels and for industries are highly subsidised. For these sectors the marketability of their products will improve because they will be able to market it as green products, so their benefit is from a different side and not so much as financial.
