Sell a service, not a product: the Indian way to wind energy

Top 10 country 2016 wind power installed capacity

India is becoming a very big market for wind energy.

After the decline of many European markets (Spain in primis) India is now fighting with Germany to be the third bigger nation in terms of yearly installed megawatts (somewhere around 3600 MW).

You can see the other in the graphic above, that I’ve stolen from the GWEC (Global Wind Energy Council) report 2016.

What is interesting (at least for me) it’s the “double role” of some companies.

As it happens in China, where energy utilities are also wind turbines manufacturers (like Guodian with United Power) also in India there is an “hybrid situation” where companies like Suzlon are also wind farms developers and providers of construction services.

As the developing of a wind farm is notoriously a mess (lot of contracts to be negotiated, lot of financial and technical risk, and in general lot of uncertainty – above all in “new” markets) Suzlon in India is selling the “full package turnkey solution”, including development risk, to his customers.

This is a model that has been used much more unfrequently by other competitors such as Vestas and Siemens/Gamesa.

Basically, the concept is to start from the very beginning: from wind analysis to land acquisition, all the way up in the chain (PPA, BoP, wind turbine supply, service, etc.).

This approach is particularly attractive for people with money, but without specific competence in the wind business.

In a nutshell, you have single counterpart who is selling a service (or maybe, more appropriately, proposing an investment).

This could be one of the factors that allowed them to get a very big market share in their home market.

In the word of the wind turbine manufacturer this is an end-to-end solution:

The major sections of the delivery process where Suzlon can add value are Micrositing, Grid Connection, HV/Substation creation, Electrical (Reticulation), Laying Roads and Foundations and Project Scheduling. (…) In India, Suzlon’s end-to-end solutions start at wind mapping and land sourcing and extend right across the entire value chain.

One response to “Sell a service, not a product: the Indian way to wind energy”

  1. Muthubalakrishnan Avatar

    Good Analysis about india

Leave a Reply

Your email address will not be published. Required fields are marked *