According to reports, It is almost ironical that on one hand the Munjal family, with Hero MotoCorp, is the largest two-wheeler manufacturer in the world and on the other it wants to be the biggest player in the renewable energy market in the country.
Incorporated in October 2012, the Hero Group’s Future Energies (HFE) – spear led by the third generation of the Munjal family – is generating and distributing renewable sources of energy, thus creating an alternative for the harmful fossil fuel economy.
“My fascination with sustainability and respect for environment propelled me to set up Hero Future Energies,” says Chairman and MD of HFE, Rahul Munjal. “We were able to create large scale clean energy assets over the last five years, making us one of the top five Indian IPP (Independent Power Producer) players in the renewable energy sector today,” he adds.
Rahul, who is the eldest grandson of Brijmohan Lall Munjal, firmly states that the company is not optimistic, but rather, is realistic. “This is the motivation that drives us to work towards a renewable energy future,” he says. Rahul is the eldest son of Hero MotoCorp Ltd founder, late Raman Munjal and his uncle, Pawan Munjal, currently heads Hero MotoCorp.
In conjunction with climate change, rising population and depleting resources are inspiring creative ways to be inventive about alternate sources of energy. HFE is one such venture.
For Rahul, this is his second venture after he started Easy Bill, a one-stop bill payment company. In fact, this is where the idea of HFE was born after Rahul got a chance to look closely at how discoms worked. For the Hero group, HFE as a startup in the renewable energy space is an opportunity to create a large business and replicate the success it has seen in its two-wheeler business.
From the first wind project of 37.5 MW commissioned in March 2013, the energy arm of the $10 billion industrial conglomerate has come a long way and will reach its first milestone of achieving a portfolio of 1 GW in the next few months.
“The milestone after that will be 2.5 GW by 2020,” says Rahul. “In rooftop solar, HFE – which has a presence in nearly ten states – plans to implement 100-200 MW by 2018-19,” he adds.
India’s power sector is currently undergoing significant changes, buttressed by the government’s push to lead an aggressive clean energy growth drive. According to Rahul, global capital flows into India are also playing a key role in encouraging the positive policy moves of the government.
HFE recently raised outside funding for the first time from International Finance Corporation – a World Bank arm. In fact, it raised nearly $125 million in 2017 alone.
“Forming valuable partnerships and making them succeed has invariably become our mantra,” says the leader of the company that is collaborating with firms like Indian Oil, Carrier, ACE, AG Industries and Hindware, among others.
One such partnership was with the recently launched Kochi Metro Rail Corporation (KMRL), which had used HFE’s solar engineering to power its stations. Admittedly, it has been one of the key milestones in rooftop solar vertical for the company. HFE has also been actively participating in green initiatives for Western Railways.
Despite being an annuity business which is not entirely consumer-driven, prevailing conditions offer a great opportunity for the renewables market in India. The company’s focus on a futuristic and clean energy comes at a time when national priority towards abundant untapped resources coupled with high economic growth rate is at a hot spot.
“The major factors affecting investment in the power sector in India is around land acquisition, grid connectivity and payment uncertainty,” says Rahul. “Although India has a strong, clear and transparent renewable energy policy framework, a long-term policy will enhance developer’s confidence,” he adds.
According to him, with the core business of the company in implementation of wind and solar projects across India, a more collaborative approach of private players and regulators could provide further impetus to achieve its targets in a sustainable manner.
“We are exploring options in other parts of the world, we intend to globally grow both in solar and wind. Our expansion plans in storage space are also shaping up satisfactorily,” says Rahul, who was the recipient of the Renewable Energy Leader and Entrepreneur of the Year-2015 by World CSR Congress. “The growing competition in the sector is not a limiting factor but rather a growing opportunity for sectoral growth,” he adds.