Message from the Chairman
“Greenko has committed to be a ‘Net Zero’ Company in Scope 2 by 2025 and Scope 1&2 in the next five years and in all scopes by 2040.”
The last two years are marked by climate-related events, across the world, such as excessive rainfall, floods, cloud bursts, drought, fires, hurricanes and tsunamis point to the inevitability of the planet hurting, and, ultimately becoming uninhabitable, unless urgent, collective, sensible, steps are taken on a global scale to prevent this. In tandem with this, we see across the board, increased Business and Investor engagement, by the expanding set of first movers’ coalition, Glasgow Financial Alliance for Net Zero and 1.5 Degrees Supply Chain Leaders. This is evidence that business and industry accept responsibility and sense an opportunity in climate mitigation and sustainable development action.
Consequent to India’s committed increase in the share of renewables in the electricity mix, there is acute awareness that this requires deep structural changes in regulation and policy, in technology and finance, in skills and in grid management, policy on production of green hydrogen, storage obligations for electricity generators and distributors, production-linked incentives, and a general all-round improvement in the entire related ecosystem. Greenko is an active participant in the thought and policy eco system that is working to enable this.
India is sensing an opportunity of becoming Energy Independent through electric and biogenic ZeroC fuels and “Make-in-India”, as global companies seek low carbon destinations. Interestingly, the national regulators across the globe are competing to attract the anticipated trillions in decarbonisation/green investments. The IRA bill of USA attracts green investments into their country; the Cross Border Adjustment Mechanisms aligns manufacturers and exporters in developing countries to global benchmarks. The complex labyrinth of emerging regulations across the globe and rapidly evolving technology developments and cost competitiveness landscape, presents both opportunity and risks to Greenko’s business. It is necessary to steer through this challenging environment and we, at the Board, are doing our best to address this.
Greenko has committed to be a ‘Net Zero’ Company in Scope 2 by 2025 and Scope 1&2 in the next five years and in all scopes by 2040. Greenko also facilitates a smoother and effective transition of other businesses in India, especially in the hard-to-abate sectors, towards its ‘Race to Zero’. Towards this end, Greenko has made a strategic shift from being a mere renewable energy producer to being able to address the challenges of delivering reliable renewable power, on demand, through a balanced combination of Intelligent Energy Platforms and Pumped Storage Systems (PSP). The response from the Indian Industry to this solution is very encouraging. Some industries have gone beyond procurement of Carbon Free Energy but have also partnered or invested in co-creating the solution. Companies in the public sector too have shown trust and confidence in these cost-effective, reliable and low-carbon solutions and have invited multiple bids to procure “tailored renewable energy” with energy “storage” and “cloud”. As you are all aware, the first off-stream, grid-scale, long-duration-energy-storage project at Pinnapuram is expected to commence operation during the current financial year. This will herald large scale decarbonisation of the grid and many Industries, resulting in up to 50 million tonnes of CO2 emission reduction till 2030. Greenko team is relentlessly working towards meeting the timelines and global performance benchmarks, and the stakeholders viz., customers, regulators and the society are eagerly looking forward to successful outcome of this project. The risk committee and the Board are closely monitoring all developments.
Decarbonising Energy and Materials
The emissions from electricity generation constitutes a fraction of GHG emission in comparison to emissions attributable to fuels, chemicals, and materials. Hence, it is important that the new fuels, chemicals, and materials be green with RE origin or biogenic. Both these routes require cost-effective carbon free energy for which the pivots are pumped storage, intelligent energy platform and cost-effective electrolysers. To enable this, Greenko ventured into manufacturing electrolysers, and Green hydrogen, fuels, and chemicals in India. This will result in deeper decarbonisation. Greenko is growing its portfolio of energy sources through PSP systems and investing in zero carbon molecules, leading the momentum towards decarbonisation of ‘hard-to-abate’ industrial sectors. We believe that this transition is a major route to build an Energy Independent India by 2047.
Global annual investment in clean energy infrastructure is expected to increase from around 290 billion USD over the past five years to about 880 billion USD in 2030. Annual investment in low-carbon technologies in end-use sectors rises from 530 billion USD in recent years to 1.7 trillion USD in 2030. The energy and industry transition to Net Zero is very capital intensive and requires large patient capital. For emerging and developing economies to attract international finance will require improvements in regulatory and policy frameworks that facilitate the international flow of long-term capital to support the development of both new and existing clean energy technologies. Paris Climate Agreement and the Market Mechanisms under Articles 6.2 and 4 may support a carbon price that enables this transition to begin and scale up. Countries that speed up the processes to harness the opportunity in Paris Climate Agreement and channel the investments to right transition projects may garner early capital and build momentum.
New Organisation for New Energy
It is imperative that the organisational transformation be in sync with the business transformation. The transformed business of decarbonisation and industrial transformation solutions requires new and different competences as well as structural change in the organisation. Moreover, the employee expectations, nature of work and norms are also changing. We continue to improve on employee wages, benefits, and other service conditions. It is critical that we impart creativity and agility to our organisation as well as to the employees. We need to revisit the concept “Empowered Employee”.
New Normal of Stakeholder Trust
Greenko is proud of its code of conduct and foundational values. The unwavering commitment to these in the evolution of Greenko’s business activities and its business model has been a source of continued stakeholder trust in Greenko.
ESG factors such as Climate Change, Circular Economy, Diversity, Equity and Inclusion, Agility and Innovation, Digital and Cyber Security, Compliance, etc., have a linkage to the Company’s ability to sustainably create value. Our main shareholders, GIC, ADIA and ORIX, view Environmental, Social, and Governance (ESG) factors, as central to their core tenets and believe that companies with innovative, creative mindset and good sustainability practices are more likely to perform well in the long term. Greenko’s integrated strategy centres around value creation for all stakeholders. Greenko has articulated and internalised its ESG framework and augmented its ESG risk management.
During the reporting period, the Board and its committees continued to be active. It continued its deliberations on the Company’s transformational strategy to harness the opportunities arising out of ‘Energy Transition in India’ and regularly reviewed strategy and capex deployment. As the Company is treading into innovative technologies, novel partnerships, and new markets, the risks are diligently identified, mitigated and appropriate provisions made for residual risk. Greenko’s value creation story, delineated in this report, is about opportunity for India to harness new energy transition to Make India ‘Energy-Independent’ by 2047 and build ‘Aatmanirbhar Bharat’. The Company is excited about the congruence of opportunity for India and itself and will be keen to listen to stakeholders’ concerns and suggestions.