CUMMINS CASE:

Background:

Quintesesence Group works in 4 segments:

1. Infrastructure: Construction of Roads, highways and bridges

2. Data Center: Provodes Multi-Cloud Solution to more than 2500 clients
3. Healthcare: more than 20 speciality hospitals in India
4. Hospitality: more tha 100 resorts accross India

NOTE: Group is planning to expand in Realestate and Telecommunications in next 2 to 3 years. EARMARKED 400
CRORES IN THESE TWO NEW BUSINESSES.

Founded in 1920- aggregate revenue: 1.5 LAKH CRORE.

MARKET LEADER in all businesses.
50,000 customer base.

CAO - startegy and roadmap to fulfill the next 10 years energy needs of the group while ensuing that the levelized cost of
enery (LCOE) is optimized

WHAT IS LCOE: https://en.wikipedia.org/wiki/Levelized_cost_of_energy 

POWER SITUATION IN INDIA: 

India has envolved from the state of significant power deficit to a point where the deficit number has come to down to zero
levels:

India- 3rd largets producer and consumer of electricity. power capacity of 384.11 GW as of june 2021. However, challenges
are still there. 

Role fo power Generators: 

to have a continuous supply of power, in case of power cut, power generators are used as an external or non-grid sources of
electric power. 

POWER GENERATORS (KNOW AS GENSET). 

INDIA POWER GENERATION MARKET: 

 2019- genset market- estimated 6000 CR (INR) and more than 1 lac unit of volume
 major portion is of diesel powered genesis and with small propotion of GAS powered gensets
 Solar and energy storage solutions(batteries, fuel cells etc) form only a small section of back-up power market.

 SEGMENTATION OF MARKET:
o categorized into
 Commercial
  Industrial
 Residential application
o Spread across end-use businesses l:
 ike telecom,
 construtiton/real estate
 Airport/metro
 defence
 Data centers
 healthcare
o based on Power Ratings:
 5-75 KVA
 76-375 KVA
 376-750 KVA
 750 KVA dieselt gensets

NOTE: Segment of 5-75 kVA is estimated to hold the largest market share (by volume) due to its wide applicability and
affordability.

Market is charachterized by the presence of:

 ORGANIZED
 UNORGANIZED genset manufacturers.

With power supply situation imporiving, running hours of generator have reduced significantly. becuase of which cusotmer
is now cognizant about initital price of the product.

MARKET DRIVERS:

because of economic development, commerical and industrial asegments have been growing fast.

 HIGH DEMAND OF GENSETS IN BELOW SECTORS:

o Telecom Towers
o Commercial offices.
o Hospitals
o Hotels

 Manufacturing industry is expected to grow which would lead to high-volume demand for gensets for industrial
applications

 Resedential real estate, grwoth in infrastructure and commercial projects is expected to translate into widespread
adoption of gensets.
 data centers is anticipated to increase gensets demand
 COVID-19- lead to remote work- which increase growth in telecom and cloud computing hence increase in genset.

POLLUTION CONCERNS:

CPCB(central pollution control board) has a mandate that caps the level of emissions that a genset can emit.
(Bharat stage norms for on-highway vehicles)

 CPCB demands greater compliance from genset Manufacturer

  Increase populiaton in certain part of the country have banned diesel genset usage under specifc conditions or for
specific period of the year.
 GENSET manufactures has been shifting towards low emission alternatives

UPCOMING TECH: - Alternate sources of power generation: 

 Gas powered gensets: based on non-dieselt fuel options

negative point: high initial cost and limited availability of fuel

 Energy storage solutions: energy produced at one time and for use at later time.
 Positive point: can address the intermittency of solar and wind power.
o key example: lithium ion and nickel-cadmium (Ni-Cd) Batteries.
 Fuell Cells: uses chemical energy of hydrogen or other fuels to cleanly and efficiently produce electricity.
o key examples: Hydrogen fuel cells and solid oxide fuel cells.
 Microgrid: local energy grid with control capability,.
o positive point:
 it can disconnet from traditional grid and opeate autonomously.
 can be powered by distributed generators,batteries, or renewable
resoruces like solar panels.
 acts as a back-up for the grid.

power needs of QUINTESSENCE GROUP:

 In 2020,the Group’s annual power consumption reached 350 MW. 

 based on current line of busienss and foreseen business, QUintessence group is expecting the power consumptions
to grow at 11% CAGG for next 10 years.
 esitmated cosumptions is 1000 MW by 2030

 Q group is committed to decouple its carbon emissions with the business growth. The group
aims to reduce
its existing annual carbon footprint of 1 million tonnes of CO2 by 30% in next 10years.
PROBLEM STATEMENT:

1. What should be Quintessence Group’s overall strategic roadmap to fulfil its energy needs for
next ten years, keeping LCOE (levelized cost of energy) optimized?
2. For each of the Quintessence Group’s business, which technology/ies (existing or upcoming)
would be most suitable to fulfil the next ten years energy needs and why? Provide your
assessment keeping in mind the different market dynamics and standby needs of each
business segment.