As part of an effort to make available clean improved cookstoves to people who rely on traditional cookstoves and fuels which lead to Indoor Air Pollution, First Energy has been focused on delivering Oorja cookstoves to rural & tribal India. First Energy is an alternative energy startup that spun out of BP. In an interview with Think Change India, Mahesh Yagnaraman, founder of First Energy speaks more about their operations. Here are the excerpts.What do you think is lacking in the sector of your organization’s interest in spite of your intervention? The policy framework for energy is very lop sided. Subsidies are making fuel unaffordable for the Government and the country. At the same time, the alternative energy subsidies have not led to any adoption of scalable, sustainable alternative energy development. In the case of the specific business of FE, the company faces twin challenges – cooking gas, LPG, is subsidised to the extent of Rs 290 per bottle and the wrong incentives for biomass power generation has driven up the prices of agri-waste artificially.
Who are the founders and management? What do they do? The founders are myself, Mukund Deogaonkar, Sreeram Thiagrajan and Raymond Moses. I have been the Managing Director of FE since 2006, Mukund is the Operations Director. Sreeram & Raymond are executive directors on the board and actively support the team through their guidance and coaching.
At the Alchemists Ark, Sreeram and Raymond consult for and add value in sales, marketing, supply chain to several MNCs and large corporates in India and abroad. Raymond is alumnus of IIT Kanpur while Sreeram is an alumnus of IIM Ahmedabad.
I have been at the helm of the business in India since its start in Feb 2006 bringing together an initial team of talented people, and setting up the company. I did my MBA from XLRI Jamshedpur and have a career spanning 19 years in different countries/continents and across strategy, sales, marketing, supply chain and IT implementation at Unilever, Castrol and BP.
Mukund Deogaonkar has been associated with the business from the start and has been the part of the team that was responsible for creating business concept and heads the operations. He has sales and marketing experience for over 17 years in fuels and lubricant industries and has strong proven ability to forge partnerships and relationships across the value chain.
How is it funded? The venture is self-funded at this point by the founders.
How do you measure your effectiveness? We use the two straightforward metrics of profitably and stoves sold.
Assuming this problem exists in similar forms throughout the world, what unique challenges do you face in fighting it here in India?
India’s energy framework is still very closed and not liberalised. The heavy subsidies make the entire thing very inefficient.
How do you intend to scale this model going forward? What are the future goals/plans for the venture? We aim to be profitable this year, at least at the per unit level. In the next 3 – 5 years we want to reach 1 million households. Beyond that, however, like 10 years out we have not thought that far.
What criteria do you use to identify partners/beneficiaries? We look at their ability to provide channel or route to market, share the same values and commitment in serving underserved markets, willingness to exercise patient capital, and have the ability to influence or shape policy.
