Here are the financials of a state-owned company: turnover and net profit in 2014-15 were about ₹70 crore and ₹9 crore, respectively; likely turnover and PAT in 2015-16 are several times higher, at ₹700 crore and ₹50 crore.

And here’s more. The company’s Managing Director says turnover could better ₹2,500 crore next fiscal.

The company, Energy Efficiency Services Ltd (EESL), is jointly owned by NTPC, Rural Electrification Corporation, Power Finance Corporation and Power Grid Corporation.

EESL is an energy services company, or ESCO, which provides energy (mostly electricity) at a customer’s premises at its own cost, and lets the customer pay out of the savings in the energy bill.

At present, EESL has two lines of activity, the first of which is to engage with urban local bodies, doing ‘new lamps for old’ in street lighting. Since January 2015, 7.5 lakh street lights have been upgraded to LED, according to Managing Director Saurabh Kumar.

But the second activity is more eye-popping. It is again ‘new lamps for old’, but this time EESL does it with households. So far, 7.6 crore filament or CFL bulbs have been replaced with the far more energy-efficient LEDs. According to the company’s Domestic Efficient Lighting Programme (DELP) website, 2,000 MW of peak demand has been saved since January 2015, which roughly just half the country covered.

Ready to help Kumar says EESL is the largest and most successful domestic ESCO, and is willing to handhold other ESCOs.

There are scores of registered ESCOs in India, including names such as Bosch and Schneider, but the business has typically tripped over one simple logic — while energy consumption is easily measurable, saving is not.

ESCOs and clients have bickered over the quantum of savings over a measured baseline. Such disagreements were perhaps inevitable because conditions of use of appliances are never constant.

EESL had its share too, says Kumar. The company went with a ‘deemed usage’ model, but when they measured the electricity consumption of the newly-installed LED street lamps, they found that it had actually gone up — because while the LEDs all worked, a number of old lamps had been long dead.

On the household side, EESL overcame the issue by selling the bulbs straight to customers. Since it buys the LEDs in tens of lakhs, EESL has been able to offer a bulb at around ₹105, while the market price is at least twice that. Still, customers pay only ₹10 upfront, and the rest is collected in instalments through their electricity bills. The electricity supply company collects the money and pays EESL.

Kumar is thinking of expanding the portfolio — ceiling fans, agri pumps, etc. Since EESL has to invest upfront, all this will cost a lot — ₹80,000 crore over five years, says Kumar. Debt has been organised with lines of credit. An IPO is possible in 2018-19.

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