2. GESCO Business Model
Energy
Bartering
Farms
CHP GESCO CHP User
Investors Grid & 3P
Model (CHP) Industries
Cost Success or Revenue
Structure Failure ? Streams
4. The GESCO Scope
Fuel
Vegetable Oil Steam
Bioethanol
Biomass
Biogas
GESCO Power
Municipal Waste
5. GESCO Viability
A configuration of 25 MWe with a 100 TPH boiler operating
@ 80%+ CHP efficiency generating (over 320 days a year)
70 TPH of steam for industrial processing priced @ Rs. 500 per
ton (for 210 days a year) – revenue of Rs. 1764 Lakhs
125 MKWh of power with 20 MVA in maximum demand priced
@ Rs. 5.00 per KWh (allowing for 9% in aux. and 17% towards
wheeling & metering) – revenue of Rs. 6250 Lakhs
Using a bio-mass fuel costing
Rs. 500 to produce a ton of steam – cost of Rs. 3840 Lakhs
Will yield
45%+ in EBITDA – operating income of Rs. 4000 Lakhs
30%+ in ROI (EBITDA/Capex) @ $1000 per KW
6. Business Potential
India being a tropical country, the use of heat will be
maximum in the process industries like paper, sugar,
fertilizer etc. (In cold countries, heat will be required for
domestic use as well)
The industrial opportunities in India are in excess of
50,000 MWe (not covered captive yet)
60 clients of size 25MWe each would make GESCO (3%
marketshare) a billion dollar enterprise!
The key to success is in delivering a standardized
package solution to each client against long-term
contracts
7. De-Risking the Model
Availability of bio-mass fuel
Tie up with micro-finance companies to promote the
development of energy farms near each installation
State Electricity Boards are not financially sound
With the Electricity Act 2008, maximize the third party sale
to eliminate receivable exposure
Heat energy demand fluctuations
Engage in long-term contracts for process steam
consumption with one client per installation
Operations & Maintenance
Automate using SCADA and build a central MRO facility
(equipment, spares, and people)
8. Build Green Assets
Register each installation with UNFCCC as a CDM
project to earn CERs
Minimize the energy losses with the use of Heat
Recovery units to pre-heat the fuel
Develop the O & M SOP and implement the ISO 9001 for
the company
Implement the ISO 14000 in every installation
Move towards trading through the power exchange
9. Leverage with Inclusiveness
Synergy derived from inclusiveness maximizes profitability
A can grow to A2 ; B can grow to B2
(A + B)2 (inclusion → synergy) can additionally bring 2AB
Whereas
(A – B)2 (exclusion → resistance) will remove 2AB
In the real world, A gains more by including B, C, D…
Greed/Myopic Vision curtails the gains
Eco-
Business + Partners + System + Society …
10. Mobilize the resources to
commence the journey…
GESCO
I can be reached at
the.kvr@gmail.com
