Bosch Ltd bets big on energy service business through investments in green buildings
Mar 10, 2014
Source : The Economic Times


BANGALORE: Bosch Limited, the Indian subsidiary of the world's biggest supplier of car parts, plans to earn more revenue from its energy solutions business as the company prepares to make it among the three leading players in the country by 2020 and help the company expand its business in the non-auto business.

The new business vertical of the company, formed last month in India, and in 2011 in Germany, aims to offer energy efficiency solutions to commercial buildings in the northern capital region and Bangalore in the south. "We have set a vision, by 2020, we want to be among the top three players in the country in the energy service space," said Venugopalan CM, head of energy division at Bosch India.

"Our focus area for the first three quarters of this fiscal year will be India. We have a team of 50 in the energy division and we remain optimistic that by the year 2020, the market for this would almost double," Venugopalan said in an interview.

Commercial buildings in the country consume 20-25% of energy while industries consume another 15%, making global firms, including Siemens and homegrown Voltas, offer solutions to make buildings consume less energy.

"Entry of Bosch is interesting (but) it remains to be seen if they would do much. There are many companies offering such solutions in market that has its own problems," said a Bangalore-based executive at Schneider Electric India. The executive declined to be named as he is not authorised to talk to the media.

One of the problems referred to by the executive is the costs. New commercial units planning to turn green drives up overall costs by 15%, thereby making many developers jumpy to the idea of constructing energy-saving buildings.

Bosch sees an opportunity in this problem and since it is willing to share the extra costs for a new building to have efficiency features, it believes swanky glass units that house Infosys and TCSBSE -3.11 % offices would seek its help in making buildings consume less energy.

"At this moment, we are a full-liner energy solutions company. We'll do energy assessment and implement without any client investment under the shared savings model," explained Venugopalan. The energy efficiency market in 2012 was estimated to be $16 billion, and the Bureau of Energy Efficiency forecasts it to grow to $148 billion by 2022. But Venugopalan says 90% of this market is "unrealistic" and so in the coming months, it will reach out to its existing clients.

However, industry players doubt if Bosch's entry in the energy efficiency market would make companies seek help of energy solutions firms to cut energy costs.





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