Schneider Electric eyes ties with Indian firms as green energy push grows

Increasing investments across functions, GreeNext JV, focused on India, progressing well, says top executive

French major Schneider Electric, which provides energy management and industrial automation solutions to companies globally, is open to partnerships with Indian firms, as they seek to decarbonise their operations and transition to cleaner energy sources, a top official said.

The multinational, which counts India as its third-largest market after the US and China, has been ramping up investments in the country across research and development, manufacturing and sales support to data centres, buildings, commercial and industrial complexes, where energy efficiency and management is critical.

In a conversation with Business Standard, Olivier Blum, executive vice-president of Schneider Electric's global energy management business, said that the potential for growth was significant in India as general awareness had increased in recent years of meeting energy requirements through renewable resources.

"The need for energy efficient and sustainable solutions among Indian companies is rapidly growing. We want to be the digital partner for companies in energy efficiency and sustainability. We could look at partnerships in India depending on the opportunity," he said.

In December, Schneider Electric had launched a joint venture GreeNext with Singapore's Temasek to help industries and buildings produce electricity locally through microgrids and also provide storage solutions to them.

The initial phase of the JV would be focused on India, with potential for further expansion into Southeast Asia, the company had said. Blum says that the JV has progressed well since launch with a full operational team and a board in place with representatives from Schneider Electric and Temasek.

"Today, most big buildings, commercial institutions and complexes in markets such as India depend on grid energy, which is largely fossil fuel-based. There is a business case for creating microgrids, where the source is renewable, such as wind or solar energy, at a time when fuel costs are rising and there is a felt need to manage this entire operation sustainably,” he said.

Almost 90 opportunities had emerged for GreeNext in the past six months, Blum said, with the JV hopeful of executing around two to three contracts in the coming quarter.

Temasek has a 65 per cent shareholding in GreeNext, while Schneider Electric has a 35 per cent stake in the venture. The two have been historical partners, having invested jointly to acquire Larsen & Toubro's electrical and automation business in 2020 for Rs 14,000 crore. The business, which sits in Schneider Electric's wholly-owned subsidiary Schneider India, has Temasek holding 35 per cent stake, while the balance (65 per cent) is held by the French major.

The acquisition had not only catapulted India into Schneider's top three global markets, but had also positioned it as a fourth hub for research, innovation, manufacturing and exports for the company, after France, US and China.

"We will do less and less of manufacturing in one place as localisation needs steadily grow across markets. Therefore, the hub in France will take of client requirements within France and the rest of Europe. The US hub will take of needs for the North American region including US. The Chinese hub is targeted at clients sitting in China. And the Indian hub is critical because it will take of customer needs in South East Asia, Africa, Middle East apart from India," Blum said.

The company had indicated earlier that it intended to double exports from India in the next four years, for which it would expand its manufacturing units in the country. That process has been set in motion with the company kicking off its capacity expansion at its Vadodara plant in Gujarat recently.

A few more factories out of Schneider Electric’s 30 domestic manufacturing units would see an increase in capacity in the future as the company sought to target more regional markets from India, Blum added.