Kirti Manian (01:00): Akshay, thanks so much for coming on the show. I am going to get started by asking you this. Where did this passion for renewable energy come from and has there been a defining moment in your journey so far?
Akshay Makar (01:12): First of all, thank you so much for inviting me Kirti. It’s a pleasure to be here.
Yes, I have always been actually keen about what are the challenge we are facing globally due to climate change. So, I knew that I had to be part of the industry actually which is helping to tackle this. As a result, I studied at the Guru Gobind Indraprastha University in Delhi which helped me receive a Bachelors of Technology in Mechanical Engineering. And I took it to the advanced level by learning some courses in entrepreneurship, innovation and the clean energy.
So, my career in solar thermal industry began with a job at the solar photovoltaic firm, it was more of a startup company, in late 2015 where I actually was working as a system designer for small scale solar photovoltaic plants with a capacity of five to forty giga, kilowatt. This allowed me to begin the learning, what the impact of solar energy developments would have on the environment as well as on the power sector, and also how these impacts can be mitigated and accelerated.
Later in 2016, I visited Morocco for a conference and got an opportunity to visit the Noor power plant which is a concentrated solar power plant. It was my first time when I saw a concentrated solar power plant. And at that moment I thought that this technology could create a revolutionary impact globally. That’s when I decided to start my own company, which we call today at Climatenza. So, there is a belief that this concentrated solar thermal technology both, in industrial and in the power applications will be a huge ...to create an impact at the global level.
Kirti Manian (02:53): Superb! Tell us more about Climatenza, what is your basic premise behind your company and what kind of challenges have you faced setting it up, you know going forward; and also, have the nature of your challenges changed since COVID-19?
Akshay Makar (03:09): Absolutely. So, basically, Climatenza is a solar thermal company which is in the business of revolutionizing how the industry generate their heat requirements, you can say the thermal requirements, for their various applications. We at the Climatenza, we design, we manufacture and we are promoting the concentrated solar thermal technology for the development of cost competitive, highly efficient solar concentrators that could easily meet the low and the medium temperature applications in these industries.
So, when we talk about the industrial application, for your information, we talk about the different temperature ranges; we talk about low, medium and high. In the low temperature, we talk about, from fifty degree centigrade to one sixty degree centigrade. In the medium, we talk from one fifty, one sixty to around four hundred degrees. And this is the part of the market we are highly interested upon. Almost 50% of the industries in the market usually do their application in low and medium scale temperatures.
So, now the question arises, is that why we do what we do. The answer is basically, when we talk about the clean energy transition towards the solar photovoltaics, we are always talking about and we are always concerned about power generation. We never think about what the energy as a whole means. So, energy as a whole means the primary energy in the form of the thermal energy requirements in industries and the power. In industries, almost three-fourth of the quadrant, which is 75%, the energy requirement is a thermal energy, which today also is being generated by burning of fossil fuels. A very interesting fact which was published by the International Energy Agency estimates that the total energy consumption will increase about 12,500 million tonne per year by 2040.
Kirti Manian (05:02): Good lord!
Akshay Makar (05:03): That’s a lot! And if we are going to implement that by burning fossil fuels, imagine, would we be able to reach the climate goals that we have set? The answer is no, right?
Kirti Manian (05:14): Yeah.
Akshay Makar (05:15): That’s why this clean energy transition is very important, and that’s what we are doing in Climatenza. A little bit about market, if you are interested in that?
Kirti Manian (05:24): Please, please, by all means.
Akshay Makar (05:26): Yeah, ahh, okay. We, at the Climatenza we are targeting, as I mentioned, low and medium temperature ranges. But when we talk about what is actual industries that falls into this. So, we talk about the food processing, we talk about the dairy industry, we talk about the manufacturing, textile, chemical, pharmaceutical. You name every type of industry, has some or the other application that falls into this. If we can bring a transition, we would be more than possible to bring clean energy transition across this entire asset.
Today, almost like fifty-two mega watts of thermal exist in the Indian market. But we can increase this up to 6.5 giga watt which is a huge, huge number. And the government has set an ambitious target of increasing this capacity in a scale of 160 mega watt to 200 mega watt just by 2022. So, in two years, from fifty to two hundred. That will be a huge jump, and that will depend upon the government policies and the other aspects of the market.
Kirti Manian (06:28): So, I am going to jump a little bit ahead in terms of my question because you have talked about government already. And I got this stats which said that as of March 2018, India had installed CST, which is concentrated solar thermal, as you mentioned, systems with around 55k square metres of collector area under implementation.
Since the start of the year, because of the way the world is right now, things have changed quite a bit in the renewable space. Has the CST space also been changed? And then, you talked about the government setting these targets. So, within this context, what is the future of the CST space in India?
Akshay Makar (07:03): Right. Actually, these days a new concept and a very interesting one which is known as net zero is evolving; you might have heard about that.
Kirti Manian (07:13): Yeah.
Akshay Makar (07:13): So, what is net zero; net zero is, the companies are bringing up the ambitious targets, specifically the big companies like the BP Energy, Shell, Nestle, Unilever; all of these major companies are bringing up the major energy targets where they want to bring a net zero. Net zero means, as per the entire value chain, they want to bring a new energy technologies, bring the high carbon technologies to cut their high carbon technologies. So, basically, when we talk about 55k implementation that have been implemented, I would say that have been implemented, but almost nothing for the industrial application. This 55k actually represents the low temperature water heating applications, and are basically done using the flat plate collectors and evacuated tube collectors, not by the concentrated solar thermal technologies.
Market demand is in huge; if you study the market within India, it is in thousands of giga watts, and this will, surely going to increase as the economy will scale up. So, that means that as much as we have to focus upon the economy scaling up, manufacturing sector building up in India and other different sectors growing up, we also have to think about how we are going to generate this energy. CST will be the game changer; it’s going to be implemented at right pace and as a right scale. So, to meet these targets that are being set by these big companies, the evolution of solar thermal technology across the entire value chain is extremely important.
And recently, I discussed with Unilever's global leader, and they are quite interested in adapting these new energy technologies, and we would see that how it goes. But I strongly believe that the concentrated thermal technology for industries as well as for the concentrated solar power in the future with thermal storage totally holds the key for dispatchable nature for the renewables.
And then, you also asked about what is the government policies that has to be discussed, right?
Kirti Manian (09:08): Yeah.
Akshay Makar (09:09): We have also already mentioned that 55k square meter has been implemented. When we talk about this size in mega watt or kilo watt capacity, this is equivalent to thirty-nine mega watts in India. And the plan is to reach to 160 mega watt thermal or up to 200 mega watt thermal by 2022. To achieve this, basically the government has adopted some good policies. So, there are subsidies, as they are in the power sector, and the subsidies depend upon state to state. So, majority of the states have thirty percent subsidy, but some special states like the Himachal Pradesh, north, north-east, they have sixty percent as well.
The other good point is, there is a coalition between MNRE, GEF and Unido that have a special loan scheme with low return on investment. That is quite motivational for the companies. That was in existence until the March of this year. But we have to see that how, after the COVID these new policies come up for the promotion of concentrated solar thermal technology. But I feel that as this market gets more attention and as the cost goes down, efficiency becomes more, there will be a strong bend towards the concentrated solar thermal market. And that, this surely will be the decade of the concentrated solar market because we have to think above the power and also as the key demands in the industries.
Kirti Manian (10:30): I love this idea that you have like, you know, you are talking about CST as a game changer, right?
Akshay Makar (10:36): Right.
Kirti Manian (10:36): It’s very interesting; we have had people coming up on the podcast saying you know coal has just completely gone and we need to look at new ways, and here you are talking about new ways to take the industry further along as well; so, that’s brilliant.
I wanted to ask you about your offices in Chile, right; how did that get kicked off? And I also read that Climatenza has started to conduct pre-feasibility studies to build your first commercial scale solar thermal power plant in Chile. So, please do tell us more about setting shop there.
Akshay Makar (11:09): Yeah. So, basically let me start with why we plan to extend to Chile and why not to be in other countries, right. So, our plant to extend our operations to Chile was based on the two parameters. First of all, it is the geographic condition of Chile that differentiates it. The northern Chile has a desert which is known as Atacama desert. And that is the most driest place on the planet Earth. That provides a good source of solar energy. And basically, the Chilean economy is actually dependent upon the mining, and majority of the mining operations is found in this northern part of the Chile. Which means that while these type of companies, the mining companies are using the fossil fuels, and mainly these fossil fuels is getting imported. Ninety percent of the fossil fuel in Chile is imported from the other countries which adds to the economics of those fuels which is very expensive these days. And majority of the fuel that is being used is either the diesel or the gas, that’s high cost fuel.
With these geographic conditions, we can get exceptional solar energy that could easily be used to produce the energy in the form of the heat or the hot water, whatever the company requires. And that’s why it’s a good place to exhibit as well as scale up our technology.
So, second point now is, when we talk about, there is a term known as solar DNI which is known as the direct normal irradiance. It’s a common term we use in our solar thermal industry. In Chile, northern Chile, it is roughly around three thousand two hundred [3200) to three thousand five hundred (3500) in comparison to the two thousand two hundred (2200) maximum which is reached in the Ahmedabad part of India. So, we can imagine 1.5 times more comparison to the India. And therefore, the better output could be provided. The return on investment would be lower.
Just to make it more clear, for example, if you have to get the output of two tonnes per hour of steel, you will have to implement the less solar thermal concentrator in Chile compared to that of India. Which would mean that lower investment would be invested in that projects and a better returns for the companies. This motivated us, that while these all companies, mining, minerals, food processing, tobacco are there in Chile. They are still utilizing the fossil fuels and we have to give them a better way and better market opportunity to enter the Latin America as well, to enter Chile.
We were truly honoured that the government of Chile, that is the CORFO, and with the support from the leading Latin American accelerator that is a Startup Chile, we went on to receive the Chilean market. We also received the support from the Ministry of Energy of Chile as well as the Comité Solar which is the Ministry of Solar energy.
We started working with leading mining minerals and tobacco companies to bring the energy transition, and we are doing a couple of pre-feasibility studies now. So, that’s a good starting point to start with. But we believe that Chile would be a huge pace to start and showcase these projects for entering the other parts of the Latin America including the Brazil and the Mexico.
Kirti Manian (14:16): So, do you know Spanish, or have you started learning Spanish?
Akshay Makar (14:20): [laughing] Hahahahh! I have started learning Spanish.
Kirti Manian (14:22): Right, okay. And how big is your setup in Chile, and are you working with local partners as well to kind of facilitate…
Akshay Makar (14:29): We do.
Kirti Manian (14:29): You do, right, okay.
Akshay Makar (14:30): Yeah, we do.
Kirti Manian (14:31): So, within Chile itself and within India, what kind of impacts have you had with Climatenza? It would be great to hear some examples please.
Akshay Makar (14:40): Absolutely. So, when we talk about impact, we believe that our company was created to meet the Sustainable Development Goals which was initiated by the United Nations. So, our vision have always been how we can provide this affordable and clean energy solution, that is majorly focussed on the Sustainable Development Goal number seven and Sustainable Development Goal number thirteen, to provide equal opportunities to everyone both, in the form of semi-skilled, skilled, unskilled labour so that we could bring a huge impact in the markets.
So, basically, we have five parameters which we use for, as our success and impact metrics. First of all is the number of projects that are being implemented year over year.
Second one is the size of the project that is being implemented. Bigger the size, more carbon emission will be replaced. So, the size have a direct relation with the carbon emission that will be replaced.
So, the third point is, the bigger the size, the oil equivalent that is being replaced by those industries will be also huge. So, that will benefit them economically as well as in carbon neutrality.
The final, fourth point is basically how much jobs we can create; so, basically both, at the, from the highest level to the lowest level, from the full-time opportunities to the part-time to the contractual basis. This is the fourth important metric that we follow.
And the fifth one is the health metric. So, we have come up recently with this idea that, imagine if you create our plant in the factory. So, we would take a case study of how the health would be improved in current times versus in two years later at the community stage level to those communities as well as the employees of the company. So, that would help us to create also the impact that would, the solar thermal technology can generate in comparison to these fossil fuels.
So, all of these, each five parameters are directly-indirectly linked to one another, and Climatenza actually aims to facilitate this deployment of solar thermal technology to reach these targets. Just to give you an example in some numbers and to be on concrete side. Our focus currently is one of a pharmaceutical project that we are going to build after this lockdown gets over in Pondicherry which is of a scale of like over 4.1, 4.5 megawatt. And it will directly and indirectly, will provide an opportunity to over like sixty-five people. So, that’s something that we target upon.
Kirti Manian (16:58): I also like this health impact. I think so many times at so many instances where companies tend to focus on only the economics of it, right?
Akshay Makar (17:08): Right.
Kirti Manian (17:08): Like you, you judge it in that sense, right. So, I really like this, you are looking at it from a different viewpoint. So, I really, really appreciate that.
Akshay Makar (17:17): Thank you.
Kirti Manian (17:17): You are also One Young World Lead2030 Challenge winner. Congratulations on this.
Akshay Makar (17:23): Thanks.
Kirti Manian (17:23): For those of you who don’t know, this is One Young World’s program for sustainable development goals, Lead2030 which has the largest cash prize fund for young leaders working on the 2030 agenda. Can you tell us more about the prize and how are you being supported by BP in this endeavour?
Akshay Makar (17:42): Absolutely, thank you so much first of all. We are actually truly blessed to have been getting this support from the experts at the BP. BP actually very well understands the growth of the renewable energy sector. And they themselves being a leader, they have invested heavily in clean energy or alternative energy source in the recent past and have a huge plan for the future as well. Recently, they also have plans to invest in India in the coming years and that would be a good matching point for us as well.
While photovoltaics has been expanding rapidly worldwide, and as I had mentioned that from, since 2008, 2009, photovoltaics has been expanding like a wildfire. We see this partnership as a blessing to move towards the energy transition phase. So, the industrial energy revolution is yet to happen in a way that the energy transformation is going to change worldwide. And here the solar thermal technologies and the new energy technologies, they are going to play a big picture.
Climatenza and BP both understands this very well and in, just to give you a small update about what BP did this year in February. Earlier this year, they have set very ambitious targets about the net zero that I have been talking about, to achieve by 2050 or sooner. And this means that the BP’s operation across their entire value chain will be net zero. It’s not only emphasis on the operation, but also focussed on the impact that they are going to make on the carbon, a reduction in the carbon level, as well as their primary products, that is the oil and the gas production will also see a huge sustainability in their production.
So, there is a huge, huge thoughts overlapping between us, and that’s why we believe that BP have trusted in us. We feel that this prize will provide us an opportunity to accelerate Climatenza’s gears forward towards our growth and partnership with the BP to work closely with them in the near future and be able to develop a sustainable and a carbon free industrial world in the near future.
Kirti Manian (19:45): That sounds really, really great. I also happened to read about the deal you inked in June with a Swedish concentrated solar heating specialist, Absolicon, is that right?
Akshay Makar (19:55): Right, Absolicon.
Kirti Manian (19:56): Yes. So, can you tell us more about any expectations associated with that deal?
Akshay Makar (20:01): Absolutely. Absolicon is actually a great partner with us. So, they have this solar thermal technology as well, and they are using the parabolic trough solar thermal technology which is ideal for temperatures up to 160. Like I told you about lower and medium scale temperature applications that we are in the market.
Kirti Manian (20:17): Yeah.
Akshay Makar (20:17): So, their technology is ideal for this low temperature range. We are working closely with them actually to bring their production line to India. So, this is a company that is not in the business of selling the solar thermal concentrator, but in the business of selling the production lines, so, more of property solutions. We believe that the production line will truly impact the economics of the solar thermal concentrators, and it is necessary actually. When we talk about implementation of any projects, particularly the clean energy project, it is capital intensive at the front end.
Kirti Manian (20:48): Yeah.
Akshay Makar (20:48): And that’s why if we reduce the economics of those by mass manufacturing, that will be a game changer for everyone. So, it is as simple as understanding how the solar photovoltaic industry expanded. In the first decade of the 21st century from 2005 to 2010 the cost of solar photovoltaics was very, very high. We have seen that after that production lines were set up in Canada, China, later in India as well, developing the local supply chain. And then the cost of this photovoltaics today is marginal of those that were at that time. We want to follow the same case studies and we want to build this mass manufacturing production line that could reduce the logistics cost, supply chain complications and therefore develop an entire supply chain across the country. This is in tandem, this is in overlapping plans that we have for our market as well, and it will be a great partnership to build in association with Absolicon.
Kirti Manian (21:49): Sounds brilliant. So, you have already talked about government, you talked about politics, you talked about policy. In the context of entrepreneurship & renewable energy, what more does the government need to do to help you and others like you?
Akshay Makar (22:06): Right, I mean there are already some policies that have been implemented in the picture, so, such as the, that is subsidies and all. But I believe that there is a huge things in setting up the local supply chain. So, when we talk about the concentrated solar thermal technologies, there is a huge number of pieces that have to be joined together to create a solar thermal plant. You have the solar field, then you have the different mirrors that is the basic backbone of this solar thermal technology, being the optical part of that.
So, aluminium and other materials like the steel and all can be procured from India. But some special materials like the highly efficient solar grid mirror still have to be imported. So, I believe that there has to be a discussion at the corporate and government level. That should define how we can set the ambitious targets for the developing, local supply chain hundred percent so that all those logistics as well as import-export duties can be taken off, and that would reduce the cost.
The basic goal for the Indian stakeholder is how we can make it more economic so that they can get the better return on investment. Although there is a premium sometimes associated with renewables when the customers are using materials like coal or the waste material. But that premium should be paid because if we are looking forward for a better future, if we are not thinking only about making profits, but sustainable society, a better future for everyone, for the future generation, a premium has to be paid. But that premium could be decreased if we have a local supply chain, different financial models, local manufacturing. So, this is something I believe that should be focused upon.
But at the same time, I believe that with the technological advancements, new financial innovation is also, could be good. So, depending upon the soft loans or new energy like new policies in the form of how this investment would be made similar to the power purchase agreement that was initiated for the utility skill projects. If we are demonstrating some big scale solar thermal projects, similar to that is a heat purchase agreement that could be into action. So, we, at a company level, are thinking about HPS, heat purchase agreements. But if this can happen at national level or even at a local level, at a state level, that would be good to implement solar thermal technology to move ahead.
Kirti Manian (24:27): You talked about what the government might need to do. What about the media, is there awareness in the media about CST, and what more kind of needs to be done to push if that’s not happening, then what more needs to be done to push that knowledge ahead?
Akshay Makar (24:41): Right. Okay, so, I believe that there is a very low awareness about the new emerging clean technologies in media. And this could actually be because of the old players that were entering into the Indian market. These are the companies that mainly are based in the Europe or either in the Spanish market majorly or in the U.S market. And when these guys enter into the market, the cost is very high basically due to the extra logistics purpose, extra transportation, import-export duties and due to the high cost of labour over there.
But when we talk about the local manufacturing setting up or local supply chain manufacturing locally, scaling that up, that will reduce the economics. So, the major point of barrier to entry of these new energy technologies has been how we can reduce the economics so that it becomes affordable for everyone, not only the large players, but also for MSMEs as well as for the small companies to implement these new energy technologies in their factories.
So, talking only about the CST technologies, I would say that this can be due to the misguiding information that the companies and institutes have regarding the economics. However, as the technology will get more mature and we as the private players will gain more experience on the ground, there will be a rapid change in the economics.
Also, as I mentioned that the mass manufacturing and innovative financial mechanisms are important and critical for scaling up the solar thermal technology. We believe that from fifty megawatts to two hundred megawatts as the plans are from 2022, there has to be a huge financial innovations as well, and that comes in the form of heat purchase agreement that we are doing. Therefore, in addition to all these, we are also trying to work with the non-profits, NGOs specifically so that we can create awareness at a major scale at the industrial level. So, we are trying to get connected to the WWF as well as all those environmental NGOs. That could be a major win-win situation for all the stakeholders, all the parties. I believe that once this happens, it will be a major push at the media level as well, and this would help us to implement at a scale.
Kirti Manian (26:47): And what advice would you give to young entrepreneurs who are interested in the field? You started off yourself with this passion for it, what advice would you give to other people who are just as interested?
Akshay Makar (26:58): Absolutely. I believe in only two things. I mean, follow your passion and build your vision that revolves around it. Basically, I believe in starting early because we have a lot of energy at this young age. We can play quick; we can take risks which could either lead to the success or a learning. If you learn, if you didn’t get success and you learn at your journey, hop onto next. Adopt those lean methodologies that could enable you to take rapid decisions. Make the right decisions, learn from them. So, that’s what we follow in the manufacturing stage. But when we are in the digital space, we are following this advice Y Combinator which is the leading accelerator. They say that never love your first product. First product is not the last product. Therefore, continue the iterations. Adopt the lean methodology of the startups to take your, accelerate your growth. So, this is something that I would recommend to all the young entrepreneurs.
Kirti Manian (27:57): I love that you said, you didn’t say failure, you said learning. And that is so true.
Akshay Makar (28:02): Exactly.
Kirti Manian (28:02): It’s so needed, right? Like in today’s time when you, so, if you just say, oh, you failed at something; but the fact that you are encouraging people to learn from it, I think that’s really great.
Akshay Makar (28:10): Absolutely, I mean, yeah, one thing I want to add is, I say learning because we see that after the Startup India initiative has been taken, this thing has to scale up. And if you use the, such negative words, that would actually impact the brains of those young entrepreneurs and that would not be motivating. So, to motivate those people and to motivate ourselves, never use a negative word, use always something like success or a learning. That will give you more positivity and motivation to move ahead.
Kirti Manian (28:40): And this goes perfectly into my last question, right. So, what would your call of action be to our listeners? And if you are talking about positivity, I would love to know considering every time I bring this question up with all our guests, and everyone says different things. So, I would love to hear your bit in what would your call of action be to our listeners.
Akshay Makar (29:00): There are two things that I want to mention. So, at a listener’s level, I would love to say that, if you are in the entering phase of this entrepreneurship and if you are learning about the new energy technologies, just go for it, just give it a try, learn it, be motivated. If you feel that the success is not accelerating, manufacturing do take time. So, we have seen that Indian entrepreneurs have been mainly focusing on the digital aspects and while not focusing on the manufacturing. I truly believe that manufacturing is the game changer and it will be a great starting point for the Indian entrepreneurs to enter this manufacturing phase. But at national and nominal level, I would like to call upon all those in your network who are at local, national or international level, who are in the global brands, governments and other stakeholders who are listening to this. Act starting now, start to implement the ambitious targets that would significantly reduce the climate spread, and that will build the new energy technologies for a sustainable future, because the next generation that have to follow us will have to get a better future and a sustainable future.
Kirti Manian (30:07): Thanks so much Akshay. We’ve had a lovely time talking to you. I think we have learnt a whole lot about CST technology, and you talked about it being a game changer. And we really do hope that’s exactly what happens. Best of luck to your company as well. And you know we really hope to see your name up there as well. So, thank you so much for making the time, we appreciate it.
Akshay Makar (30:26): Thank you so much Kirti for inviting me.
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