Now, you can rent renewable energy
After working seven years in management consulting and spending the majority of that time in utilities and the renewable energy sector, Daniel Zywietz decided to set out for an entrepreneurial journey.
"When I left consulting in 2011, I looked around for potential business opportunities in the cleantech sector in the Middle East. Unfortunately, due to the significant energy subsidies still in place at the time, most business ideas didn't make any sense - except for one: replacing diesel fuel with solar power. The business model looked very profitable because of the very high oil prices at the time (over $100/bbl). As most diesel generation is considered temporary, there were a number of technical and business problems to be solved. So I spent some time bouncing around ideas with my partner, and together we came up with the concept for a solar generator rental company, which ultimately turned into Enerwhere," Daniel explains.
Enerwhere, a solar utility company based in Dubai, is the world's first provider of MW-scale transportable solar generator rental solutions for the construction, mining, logistics and manufacturing industries. With the introduction of solar net metering in Dubai, Enerwhere also offers fully-financed solar rooftop solutions under Dubai Electricity and Water Authority's Shams Dubai initiative.
"It took another two years of R&D until we finally deployed our first 25 kWp pilot solar plant on the World Islands in 2014, and our first commercial-scale deal followed soon afterwards (with TDIC in Abu Dhabi). Today we have 50 employees across offices in Dubai, Abu Dhabi and Northern Nigeria, managing over 20MW of generation capacity and providing power to several thousand people in camps and on construction sites, as well as several factories and industrial facilities. In the same period, our revenues have grown from zero to over $7 million last year, with the business roughly doubling in size every year," says the founder and CEO of Enerwhere.
The company is currently in the process of opening an office in Oman, and working on a number of mining projects in Africa.
"We've recently commissioned the largest commercial solar plant in Nigeria, and by the next month we will complete the installation of a much larger (1 MWp) solar plant at the Bayero University Kano in Northern Nigeria. At the current growth rate we should hit $50 million in revenue and the strength of 100 people in about 3 years," he continues.
Describing his strategy Daniel says Enerwhere competes with other companies on reliability, price and data visibility.
"Unlike diesel generator rental companies, who generally leave fuel handling to their clients, we are incentivised to reduce fuel consumption. We do that using multiple technologies, including solar, batteries, remote monitoring and efficient air conditioners. Together we can save 30-50 per cent of the previous diesel fuel consumption, and roughly 10-15 per cent of the total power costs compared to conventional generators," says the CEO.
"Compared to other technology-focused solar hybrid system vendors, we tend to be around 20 per cent cheaper due to our detailed knowledge of energy load profiles in this region, which allow us to optimise the equipment for maximum performance at the lowest cost. In addition to reliable power, we also provide our clients with transparent, easily understandable, and continuous data on their energy consumption, allowing us to identify further optimisation potential over time. Together we believe that this is a winning package that is not currently offered by anyone else in the temporary power market in the region," he claims.
Describing the challenges, Daniel says: "Our unique approach, providing short term contracts to private sector clients, is perceived as risky by the banks, in spite of the good track record and attractive economics of our business. Another natural investor group, venture capital funds, are geared more towards technology companies, rather than energy startups, meaning we have to spend a lot more time talking to 'non-traditional' sources of financing like family offices and asset financing providers."
Enerwhere recently closed a funding round on the crowd investment platform Eureeca, where it raised over $850,000, making this the largest equity raise on the platform and in the Middle East.
"We are looking to raise a multi-million dollars Series A equity round this year. We expect these funds to come from institutional investors, who can continue to help us add both equity and debt capital to support our growth rate of over 100 per cent for the next several years. Most of our future financing will be used to finance solar and battery assets to service existing and future contracts, for geographic market expansion in the Middle East and Africa, and to expand our data analytics capabilities, particularly around machine learning," said Daniel.
Alex Reuter, investor and board member, says he saw significant potential in the company based on its business model, the growth potential and the management team.
"It was clear to me that the major themes in energy are not simply a shift to more sustainable resources but also to more efficient management - there has to be a clear value proposition to the client and users in terms of cost savings and return enhancements (as opposed to simply ethical considerations), which is what Enerwhere provides. If executed correctly, this model is applicable in most geographies that have sufficient solar radiation, thus the attractive growth aspect," he says.
Stefan Muckstein, Enerwhere's chief operating officer, says the company focuses on providing cleaner energy and improving reliability of the power supply while at the same time reducing costs.
"Enerwhere looks at the energy solutions of its clients and prospective clients and sees significant potential. Once we know something isn't as good as it could be, we are passionate to fix it. But we know this is only the beginning of a new energy era, with much more to accomplish. This is our inspiration and this is why we feel our work is never done or good enough," Stefan says.
Daniel believes that technology is important but more as an enabler for his business model, rather than as a standalone solution.
"Enerwhere uses data analysis in combination with multiple technologies to find optimal client-specific energy solutions. We have developed a few technologies in house - such as transportable solar PV mounting structure and a hybrid manager to integrate solar power with diesel generators and batteries - however, a lot of our success is really down to our innovation on the business model side," he concludes.
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