E-CUBE Energy Trading Private Limited is a financial and transaction advisory company working in the Energy & Emissions space that works alongside project developers in helping them raise project finances while also helping them manage and monetizeemission assets, covering the domestic and global emission trading schemes.In conversation with Abhilasha Dafria for Yourstory, Umesh Bhuotria tells us more about how he and his elder brother Amit co-founded E-CUBE Energy Trading to establish its niche in providing low cost emission asset management service to buyers and sellers alike.
Umesh, please introduce yourself to our readers.
I have been involved in the carbon markets for over 4 years now. Before founding E-CUBE Energy, I was working closely with a leading Indian CDM consultancy firm in helping them market their services to project owners spanning across sectors like steel, paper, cement and renewable energy. I have done my Honors in Physics from CalcuttaUniversityand during this time, I also held various leadership positions in the local chapter of AIESEC in Kolkata. During this term as the President, the local committee successfully hosted the first Youth Leadership Conclave-Yuva in association with companies like Tata Steel, SREI, Forum Projects, The Telegraph, Ambuja Realty & Patton International.
I have co-founded E-CUBE Energy with my elder brother Amit. He holds an undergraduate degree in Aeronautical Engineering fromIIT Kharagpur and has worked with Goldman Sachs and Minekey Inc before moving back home to co-found the company. In his last job with Minekey Inc, a venture funded company hq’ed inSunnyvale, he worked as a Product Manager and the Program Lead for the company’s research wing based out of IIT Kharagpur. While at Kharagpur, he co-founded the Entrepreneurship Cell and a research group on educational technology.
And to describe E-CUBE Energy in a nutshell would mean?
E-CUBE Energy is a leading player in the energy and emission markets space inIndia, providing financial and transaction advisory services to project developers and funds, banks and international buyers. Our services span both the global (Clean Development Mechanism(CDM) and Voluntary Emission Reduction(VER)) and domestic energy markets(Renewable Energy Certificates and PAT(Perform Achieve & Trade) Scheme). With just under two years of operations it has successfully transacted over 3 millionCERs and are aggressively rolling our offerings for the REC and PAT.
So how did you come up with this idea and since when are you operational?
After completing my graduation, I got in my family business which is into distribution of electrical products. I started to work with the industries to help them reduce their energy consumption through our power quality and energy management products and solutions, getting an opportunity to closely follow some of the largest energy consumers in the region and got an sense of the prevailing trends in the energy and emission markets. I then worked closely with a CDM consultancy company which made merealize that although there were companies consulting the clients on navigating through the registration process for generating carbon credits. There were very few companies that were helping these clients in best monetizing their assets thus generated. That’s how we got the idea of creating a company which would focus on helping industries and project developers best manage andmonetize their energy and emission assets.
We have been operational for just around 2 years now.
What are the services and products currently offered at E-CUBE Energy?We are basically a financial and transaction advisory company working across global and domestic energy and emissions markets. We work alongside Project developers in helping them manage and monetize their emission assets. We also work with international buyers who are looking at sourcing quality credits to meet their or their clients’ environmental obligations back at home.
Our service verticals are Emission Asset Management, Investment Advisory Services, Project Advisory Services and Transaction Advisory Services
What social impact are you creating? How do you measure the impact of your venture?
By working with industries and power generators to become efficient in their energy consumption and by helping them transition to renewable or non-conventional sources of energy generation, we indirectly contribute our bit to the overall mission of helping India and the World at large to attain Energy, Economic and Environment sustainability.
What were the challenges you faced while starting up? Tell us about your initial hurdles.
When we look back in times there are three major hurdles that we had in pushing in our idea through (at times to clients and at times to prospective investors).
The first was, the very nascent and often volatile markets – Some of the markets that we operate in (esp. the global carbon markets) have been very volatile, due to the inability of different countries across the global being unable to decide on a concerted global effort to tackle climate change, thereby affecting the rate at which we could have grown. Some of the domestic schemes are still in their inception stages and will take time for them to mature and reach a scale that makes it attractive for companies like ours to grow rapidly and thrive.
Secondly, A services company – Conventionally services industry in general and brokering/ trading in particular in India is not looked at as an investment opportunity by most early stage investors limiting access to early stage capital for companies like ours.
And the last hurdle was the background of us founders. Both of us had no prior relevant experience of the emissions or the financial markets when we started and it therefore took us more time to establish our value proposition and brand name within the developer community inIndia. With time we have had the opportunity to work closely with a handful of clients and to be able to do bring value addition to them.
How big is your team? How hard is it to hire in this field?Just two of us, should expand into 5-7 member team by the start of next FY. This being a new industry segment, it is hard to find people with relevant experience so that they can be productive right away. That said, there is a lot of buzz within graduating students about the cleantech and allied sectors and it is not very difficult to hire employees at a junior level. Finding committed guys to stick on for longer (esp. if you are a small company) is still a problem though.
What is your clientele like? Which cities are they based in?
We have worked with around 20 clients from acrossIndiaandEurope. Our Indian clients are from industries like Iron & Steel, Cement, Textiles, Power etc. As on date we have around 10-12 clients from cities likeHyderabad, Pune, Mumbai andDelhi.
We also work with international institutions – banks, funds, brokers, aggregators etc- mainly fromEurope.
Do you plan to take your services to the rural market?
We do not offer any product or services aimed at the domestic/rural consumer. However, if there are NGO’s that are running programs in, like distribution of cooking stoves or solar lighting, we do have an opportunity of working with them in helping them in generating assets that could be monetized to offset the cost of implementation of such schemes.
Are you predominantly focusing on the domestic market or do you make international sales as well?
In the medium short term, our focus is to consolidate on the opportunities available inIndiaitself. With more and more developing countries adopting schemes similar to those being rolled out inIndia, we feel there would be a sizeable global opportunity in our segment.
What is your market size?
We are working across three major market schemes that is: CDM, Perform Achieve and Trade Scheme, Renewable Energy Certificates Trading. In the coming 3-4 years, all the markets put together would have a market size of around 5-7 Billion USD as far as brokering or trading is concerned. These are based on the estimates for sales of emission/energy assets happening out ofIndia.
Did you fundraise to start up?
E-CUBE Energy is a self funded venture till date with the initial capital coming in from within the immediate family.
Any other partnerships that help you boost sales?
We have focused on building strategic partnerships both locally and globally in strategic areas so that we are able to provide greater value addition to our clients. For instance we have a MOU with one of the leading consultants inIndiain the field of Renewable Energy and Energy Efficiency, through which, we aim to provide end to end services for the domestic PAT scheme. Likewise, we are working very closely with some of the leading international players in the global emission markets to bring in a range of hedging products to Indian project owners.
Do you have a revenue model? How you sustain yourself?
We provided services to our clients in return for a fixed fee or a success fee (or a combination of both) based on the nature of engagement with the client. We have been profitable since inception. We are however looking at raising external capital to fuel our growth plans.
For more information please check out E-CUBE and do share your thoughts by dropping a comment here!
- Abhilasha Dafria
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