Galician Bethlehem: Welcome, ladies and gentlemen, to this session of the Renewable Hotline. And with us today, we have Vaibhav Joshi, who is the head of international business of Sterling & Wilson Renewable Energy. Welcome, Vaibhav. How are you?

Vaibhav Joshi: yeah. Thanks, Bethlehem. And hi, everyone. My name is Vaibhav Joshi and I'm head of the International Business Development for Sterling & Wilson Renewable Energy, one of the largest global solar EPCs. I have been in the renewable energy sector for the last 11 years and passionate to be a part of an industry which is leading the energy transition and carbon reduction across the globe. And I have worked across the value chain of solar energy, including product sales, engineering, procurement and construction and project development.

Galician Bethlehem: Thank you very much for that. Now that everyone knows what you do, tell us about Sterling & Wilson Renewable Energy and your experience and the renewable energy sector, please.

Vaibhav Joshi: yeah. So, Sterling & Wilson Renewable Energy has been active in the renewable energy sector for almost 11 years now. We started our journey from India in 2011, and after becoming the number one EPC in India in 2016, we ventured out into the international market. We started by signing off two projects in South Africa and the Philippines, and then came the Abu Dhabi Project, which established us in the global arena. From then until recent times, I would say pre-COVID, Sterling & Wilson Renewable Energy has expanded its horizons globally, with projects in 18 countries and offices in 25 countries and in all the continents of the world. We have consistently remained one of the top ten solar EPCs for the last few years. We reached number one ranking in 2018 as pariah. In 2021 we became the largest solar EPC in Australia. Today I would say Sterling & Wilson Renewable Energy has an impressive EPC portfolio of over 250 projects totaling 11.2 gigawatts of capacity. And then when a portfolio of 7.2-gigawatt peak and we are offering solutions across utility scale, hybrid and energy storage, floating solar waste to energy and operation and maintenance from my site. Personally, I have been in the renewable energy sector for the last 11 years and I have worked with module manufacturers EPCs and IPPs in India before joining Sterling & Wilson Renewable Energy in 2016. I have been a part of this fantastic journey since 2016 when the company decided to venture into international arena. I started my journey with Southeast Asia, Latin America and then moved to Australia in 2018 and since September 2021, I'm working in the current profile of Head International Business Development for solar and energy storage based out of the bay.

Galician Bethlehem: Thank you very much. It is quite a lot. I mean, did you say 250 projects, 11 gigawatts? It's a lot. And rank top ten in the business in the world it's a lot to achieve in a little time. So, congratulations to you and of course, to your colleagues. But it has been quite a rough couple of years now in general, not specifically for you guys, but for the sector. First, with the pandemic, EPC businesses went through hardship, let's say, in difficult situations. And now we have the current logistic costs that are really high and we don't know when it is going to end. So, I just wanted to ask, how has Sterling & Wilson Renewable Energy been faring through these difficult times?

Vaibhav Joshi: yeah. So, for the last two and a half years, post-COVID, it has been hard for the industry and in Sterling & Wilson Renewable Energy has also felt the heat of it. We saw module price increasing by almost 15% due to a steep surge in the commodity prices. And what typically happened with COVID 19 restrictions was that they continued at different times in different countries, so which led to a disruption of the supply chain. And also it led to a very lower demand for last couple of years due to lockdown, restricted mobility, etc. And in terms of execution, it led to labor shortages, price hikes, and it affected us a lot in terms of project execution delays, cost overruns. And another thing which happened during these last two years is that in the utility segment if you see multiple projects and auctions got canceled or delayed. So, with all this happening, honestly, we have been watchful and diligent, I would say more than ever. It has been a slow business period for us, but we are hopeful to regain our momentum as we now see the COVID restrictions and COVID as a concept going out of the world. So, we are hopeful we'll regain our momentum and bounce back, you know, this year and onwards.

Galician Bethlehem: At least the mean is not usual. Generally, I think the whole industry has kind of gone through this and hopefully we're going to be coming out. I wanted to ask you, we started saying that, you know, you guys are focusing on Europe. You've been already present in Europe for a number of years. But now, you know, it kind of gains momentum as you are focusing more and more on this market. So, what are you doing in Europe and what lessons learned are you bringing with you from your experience as well?

Vaibhav Joshi: So, we started our operations in Europe almost two years back. And I would say this is the last market we entered. Before that we had ventured out everywhere across the globe. So, we started two years back out of our office based in Seville, Spain. We have a team of experienced professionals who are from different backgrounds business development, engineering, project development, execution. We do have a project in Europe for which we are awaiting the green signal to start the execution on ground. And, we are in a preferred position in a few other projects. So, I would I assume that within this year, by the end of 2022, we would have projects in hand for execution in Europe market. But in terms of experience, you know, and you know from other markets. So yeah, every market and every project has shown unique challenges. But if we leave the site-specific challenges, the main challenges which we have seen are mostly around grid connection commissioning and manpower availability. I think these are the three fundamental problems apart from the site-specific challenges. So, we have experienced from similar challenges faced in Australia, Middle East, Latin America and US and other markets. So, we have developed more and more internal capabilities around this, and we have identified right solutions around this. So, whenever it comes to execute a project in Europe, obviously all that knowledge and IP will be utilized in Europe so that, you know, the progress and the path of execution is much smoother than any other market.

Galician Bethlehem: Thank you very much, Vaibhav. And how does Sterling & Wilson Renewable Energy add value to your customers in Europe. What is your key differentiator with other companies that are present in this market?

Vaibhav Joshi: See, one of the good things about Europe market is that, you know, most of the developers, IP suppliers, financial institutions from Europe, we have worked with all of them but in some other market. So overall, as I would say, our solution, the execution approach and the on-ground performance that we have demonstrated is something which has been accepted and signed off by all these all these clients and all these stakeholders. It's only about getting onto the first project in Europe and start executing it. But fundamentally, I would say that we are known well by the stakeholders in Europe market. Secondly, I would say the if you see it's not about only constructing the plant. If you see the measured performances and availability of the plants that we have constructed across the globe, we have been fairly moving over and above the guaranteed performances and availability. Another aspect which Sterling & Wilson Renewable Energy brings on the table is that we work on the concept of LCOE levelized cost of electricity. We don't work on the concept of lowest EPC cost, which is fundamental being carried out by other EPC companies. But our concept is always lcoe. And another unique feature, which we say is that we are backing our projects by offering long-term arrangements. So, this is a niche, I would say segment wherein EPCs do not offer a long term or a name, but we Stirling Wilson, we back our design, we back our execution and we are willing to sign long term memorandums. So, I would say our global experience, bankability project performance and the technical prowess that we carry, it places us in a unique position to cater to the Europe market. And I would say these are some of the unique advantages that we are carrying, and we will bring it to Europe market.

Galician Bethlehem: Thank you very much, Vaibhav. It's going to be like meeting old friends then. You know, you've already worked with them. They know you, you know, just in a different setting. So, I'm sure that is going to work really, really well. So, let's focus on storage because this is the event that you're attending next week. And also, you know, to understand what you guys are doing, what are your plans for the services you will be providing in Europe?

Vaibhav Joshi: See if you see fundamentally last few years there has been a few changes in the way storage business was carried out. So earlier the companies get into the storage projects by offering turnkey solution with supplies and finances bought on the table. Now, what is happening is fundamentally now these guys have established themselves in the market and now they have moved from a turnkey project supplier and finance service provider to a pure play system integrator and operator. And what we are also seeing a change is that the battery OEMs, which were earlier offering sell module and sometime racks, now they are offering a containerized full the best solution. So, what happens is the in this case now that they have moved against their own customer base so they are providing these battery racks to the turnkey project providers, but now they are offering a full time solution. So now there is a need of someone who comes and offers a turnkey EPC solution for the containerized or the best solution provided by these OEMs. And that's where Sterling & Wilson Renewable Energy will come in as a turnkey EPC. So fundamentally, as I would say that there is a there is a lack of someone who can integrate the entire battery solution and can guarantee it and can back it for the entire lifecycle. So, what we are doing here is we are catering to the entire lifecycle of the projects by providing turnkey solutions. We are offering a very right mix of, I would say, low initial CAPEX and then augmentation later. So, in battery solutions, there is always a provision of augmenting the battery at a later stage rather than putting everything upfront.

Vaibhav Joshi: And then as a system integrator, as an EPC, we are giving the performance guarantees and end of life support. So effectively, I would say similar to solar EPC, we are providing a one stop solution for the end-to-end requirements of the client. And that is something which is a unique selling point. And we already have an established EPC heritage. We have we take the undertake the entire construction of the large scale and complex projects. So, I think that is something which we will bring across the storage project because this is I would say this is a particular segment which is missing from the from the piece of the cake in terms of EU specifically. So, I would say the highest demand for storage right now is across the UK market and we are now seeing the market, the demand is started to grow in other European markets also. So, we are keeping a keen eye on the projects. We are offering our solutions. There are a few cases wherein we are we are in the preferred EPC position. So overall, as I said, you know, the heritage of our EPC and with the combined solution and a turnkey EPC offering for storage is something that we are bringing to the market and hopefully Europe after UK, I would say Europe, other parts of Europe will also pick up as a market and it's going to be a big storage market after us and Australia.

Galician Bethlehem: I mean, there is no doubt, I 100% agree with you as more variable renewable, you know, in the framework of decarbonization is going to be a huge market for storage. There is no two ways about it. I am really intrigued by your idea of ​​a turnkey EPC. I think this hassle-free approach to storage in a way that you can just worry about your job, you know, and have someone else worry about the construction and the maintenance and operation is a great service that indeed, you know, at the moment we don't really have a lot in the market. So, thank you very much. I'll be I'll be looking forward to hearing more about that. Sure. I have one last question before we go. And it's about the EPC business in general and how do you see it evolving? You know, what are the opportunities for the business in the next few years, considering, you know, what is going on in the renewable energy industry right now?

Vaibhav Joshi: Yep. So one of the one of the changes that has come in this industry is about the joint risk management. There has to be a correction in the way EPC business is being driven now and in the way the contracts are modeled. So somewhere, the suppliers, the project owners, the financial institutions, they will have to step in and the project execution and the current price and logistic risks. They have to be managed jointly because in the current scenario, the way all the risks are being passed onto the APC, it is leading to, you know, bad health or exit of EPCs. So that is a fundamental which needs to be correct in terms of EPC health. So, five years ago, we were talking about a 100-megawatt plant to be a big plant and now we are talking about a two-gigawatt plant as a normal plant. So, and adding to this, you will see mega green hydrogen projects and ultra-projects for power transmission like the Australia Singapore power transmission across countries. But these size of projects and these sizes of CAPEX know you would need large EPCs which have experience and which have financial health. So having said that, I foresee that there will be a strong consolidation of the EPC market and you know, there will be large EPCs which will be driving more of the market. Another change which we are already seeing, which will further grow, is about the development and EPC intertwining of the model.

Vaibhav Joshi: So you will see that EPC will diversify more towards development model and so that they have more skin in the game and they can manage their bottom line better. And you will also see more acquisitions happening in the EPC space. So IPPs and developers will acquire EPCs to address execution of the huge pipelines which they have are talking about. So. Almost all the big players in the world are talking about 100 gigawatts by 2030 and to execute them. So, they need they need strong, robust EPCs. And as I said, this might lead to more and more acquisitions of EPCs to develop the internal capabilities. Lastly, I would say there will be a huge level of focus from EPCs on improving the bottom line, which will be through more digitalization, more automation and technology advancement. There will be cost saving solutions, more modernization and use of advanced construction material. So overall, I would say a more streamlined, well monitored, better collaborative approach and automated approach will come in from EPCs in coming times, and that will be the differential between who becomes the better EPC out of the competition. So, I think these are a few of the fundamentals that need to be seen over the next few years.

Galician Bethlehem: Thank you very much, Vaibhav. I love your vision. There is a lot of opportunities and consolidation. You mentioned that a lot. So, a lot of changes in the next few years. But I suppose as industries grow and professionalize, you end up pretty much, you know, and this in this in this place, I suppose like economically wise or financially wise and.

Vaibhav Joshi: Fundamentally Belen, you know, solar is the cheapest source of energy. There is no doubt about that. We all know it isn't. The idea is to make it more dispatchable, more available, you know, and available around the clock and available everywhere. So that's the fundamental where this industry will move into, and everyone will work towards it. But I'm sure, you know, solar is going to grow and overall renewable is going to grow, there's no doubt about it.

Galician Bethlehem: So how do you make solar work around the clock? Essentially, that's what we're going to be focusing on.

Vaibhav Joshi: Exactly.

Galician Bethlehem: And this focusing on digitization. You mentioned several things modularization. Are there any specific technologies that you see coming to the fore?

Vaibhav Joshi: yeah. So, we are talking about, you know, more and more automation during the execution stage, the survey, the right surveys, you know, sitting at the desk, at your computer, you can see the entire execution, which piles have been installed , which inverters have been stored. You can track all your installations. So, in that sense, it will become more digitalized, you know, rather than on working on the papers. In terms of modernization, you will find more and more concepts wherein at the site you might have to only plug and play. You don't have to do lots of civil works at the site. And when it when they talked about use of materials which may better your execution in terms of, you know, using lesser steel, using lesser of concrete, using less or less of other materials and making it more using more robust material which are light to handle, to manage, easy to install. So those are the kind of changes we are looking at.

Galician Bethlehem: Thank you so much for sharing all this time and knowledge with us. I think it's been great getting to know you a little bit better and I'm really looking forward to meeting you in person in Granma del Mar Amato in Toledo. And and thank you.

Vaibhav Joshi: Thanks, Bethlehem. It's always a pleasure talking to you and see you in Renmark soon. Take care.

Galician Bethlehem: We keep talking in storage there. Thank you very much. Bye.

Vaibhav Joshi: Bye bye.