Manish Kalita
Case Western Reserve University - Weatherhead School of Management
Chris Laszlo
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The key idea is to facilitate investments in renewable energy in India. This is key to reducing carbon emissions globally, since India is one of the major energy consumers in the world, given its growing population, rapid urbanization, and increasing economic activities.
Investment bank Greenstone Energy Advisors has embedded sustainability across many facets of its business model. This story focuses specifically on an innovation called Energy Partnership. In August 2011, Greenstone and SoloPower Systems, a photovoltaic technology company specializing in the design, manufacture, and deployment of CIGS flexible thin-film solar technology, launched the first Energy Partnership in India. Since then Greenstone has entered into more than 40 Energy Partnerships and developed a unique partnership model with a variety of Indian organizations like Aditya Birla Group, Emergent Ventures, Kotak Urja, Longman Suntech, Zolt Energy, PAE Renewables, L&T Alkyl Amines Sunsource Energy and Apollo AMP Renewables.
Greenstone has a long-term vision of providing clean and reliable energy. Energy Partnerships are an important element in the climate strategy that has been developed to support this long-term vision. The strategy commits Greenstone to support a significant reduction in CO2 emissions stemming from energy production, and at the same time it serves as a strong driver for differentiation.
The major inspiration is that companies, municipalities, and other organizations are constantly faced with climate questions, and they all share the common goal of decreasing environmental impact of their activities besides running financially healthy operations. Through the new Energy Partnership concept, Greenstone set out to help companies do just that.
There is a severe lack of expertise in renewable energy finance in India which presented a significant gap to be filled in providing clean energy to around one-fifth of the world population. India may need about $9 billion of capital and equity investment in the next couple of years for a 32% increase in clean-energy capacity. The Indian government launched an unprecedented $200 billion expansion of solar, wind, and hydroelectric power by 2022. This presented the perfect platform for Rahul Goswami to found Greenstone, which forms collaborative financial partnerships with various corporations to switch to renewable sources of energy in a cost-effective way. India remains reliant on coal for about 60% of power generation capacity, part of the reason it’s one of the world’s biggest polluters. The Indian Prime Minister has pledged to slow the rise of greenhouse gases produced by India’s growing economy, which gives Greenstone the perfect opportunity to leverage its business innovation.
The overall impact is that corporations in India now get the perfect partnership to make judicious investments in the renewable-energy sector. The wide lack of expertise in the renewable energy finance sector in India gets bridged. India is now one of the world’s biggest polluters. Hence, the overall impact on the reduction of Indian corporations' reliance on non-renewable sources will be massive, thereby significantly reducing carbon emissions in the world.
The Energy Partnership concept offers a way to reduce pollution that benefits businesses and their customers. Both parties achieve energy savings and support renewable energy. Greenstone’s energy advisors locate and help execute these energy savings. When energy savings are realized, all or part of the reduction is used to finance the purchase of renewable energy.
The purpose is to support and strengthen innovation within climate technology, increase the demand for renewable energy, and strengthen climate initiatives in private and public organizations. The partner obtains a reduction in costs by saving money spent on energy, which increases revenue. For selected large customers with little or no resources to drive development projects themselves, Greenstone has offered to take on projects and help customers establish a business case, sell the project internally, analyze and discover potential, and build the implementation plan.
In short, Greenstone’s Energy Partnership concept bundles sourcing, energy savings, financial solutions, and project management into a customized value proposition that responds to customers’ new climate challenges. This helps customers reduce costs and meet a new type of market demand. Notable clients who have entered into Energy Partnerships with Greenstone are Aditya Birla Group, Emergent Ventures, Kotak Urja, Longman Suntech, Zolt Energy, PAE Renewables, L&T Alkyl Amines Sunsource Energy, and Apollo AMP Renewables.
When I asked Mr. Goswami about the Environmental Benefit achieved by the Energy Partnership innovation of Greenstone, he said, "Through the energy partnerships, we build strong relationships with important business customers. We work through common value sets to use less energy and help transform the energy supply to more renewable energy. When we produce more green energy, we emit less CO2. In India, we accounted for around a quarter of the country's CO2 reduction from 2010 to 2016." This summarizes the paramount environmental benefit Greenstone has achieved within just six years. And when the long-term aspect is considered, the potential of Greenstone to help companies reduce their carbon emissions is immense. This strongly promotes the UN Global goal of affordable and clean energy. And since Greenstone is focused on reducing carbon emissions in India, one of the world's largest energy consumers, it makes clean energy available to around a sixth of humanity.
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Rahul Goswami, Managing Director
