Harnessing the Sun: Reducing Energy Costs and Emissions at Everest Spices

Introduction

Everest Spices, a major player in the spice manufacturing industry, is undertaking a significant sustainability initiative aimed at reducing fossil fuel-based electricity consumption and GHG emissions. By transitioning from conventional power sources to solar energy, Everest Spices seeks to lower both its operational costs and environmental footprint. ASQI conducted an in-depth analysis of Everest Spices’ renewable energy shift, highlighting potential cost reductions and sustainability benefits.

Current Energy Consumption and Emissions

Everest Spices’ current electricity demand is fully met through conventional energy sources, consuming around 6.18L units monthly. This translates into approximately 506,750 kg of CO₂ emissions every month, contributing significantly to the company’s Scope II emissions.

Proposed Solar Power Shift

• Phased or Complete Transition:
  • The transition to solar power could be carried out in phases or as a complete shift depending on the available infrastructure. By adopting solar energy, Everest Spices plans to replace 70% of its energy needs with renewable sources, equating to 4.32L units monthly.
  • The remaining 30% (1.85L units) would still be drawn from the grid, which includes existing conventional energy sources.
• Potential Environmental Benefits:
  • This shift would result in a 67% reduction in Scope II emissions, cutting Everest’s emissions from 506,750 kg to 170,000 kg monthly.
  • This reduction is equivalent to saving around 4,000 tons of CO₂ emissions annually, a substantial contribution to Everest’s sustainability goals.
• Economic Benefits of Solar Power Adoption
• Cost Savings:
  • The transition is expected to result in significant savings in energy costs. By shifting 70% of its power usage to solar energy, Everest Spices could save INR 2 Crore annually.
• Return on Investment:
  • The proposed solar power shift involves an upfront investment of INR 1.5 Crore for a Group Captive Solar Farm, with an anticipated ROI in 1 year.
  • Depending on the model chosen—Captive, Group Captive, or Third Party—the ROI can range from 1 to 3.5 years, with Group Captive offering the highest return.
• Solar Power Implementation Options
• Captive Solar Power:
  • Everest Spices would bear the full CAPEX of INR 13.5 Crore.
  • This option provides the highest monetary benefit of INR 5.5 per unit and 0.8 kg CO₂ savings per unit.
  • The expected ROI is 3.5 years but comes with high upfront costs.
• Group Captive Solar Power:
  • This model splits the CAPEX with other parties, with Everest contributing 26% of the equity and external parties covering the remaining 74%.
  • The ROI is faster at around 1 year, with an estimated power cost savings of INR 4 per unit.
• Third-Party Power Purchase Agreements:
  • Everest would not incur any CAPEX, but the power rates would fluctuate depending on market conditions.
  • This option offers the lowest return but eliminates the need for upfront investment.
• Key Outcomes and Future Considerations
• Everest Spices would not only achieve significant cost savings but also substantially lower its carbon footprint by reducing its reliance on fossil fuels.
• A 67% reduction in Scope II emissions aligns with the company’s long-term sustainability objectives, reinforcing its commitment to green practices.
• Exploring different solar energy procurement models—such as Captive or Group Captive—ensures flexibility in balancing capital investment with long-term financial benefits.
• Conclusion
• By transitioning to solar power, Everest Spices has the opportunity to lead the spice manufacturing industry in adopting renewable energy. The projected savings in energy costs, alongside the reduction in greenhouse gas emissions, will make Everest a pioneer in sustainable operations. This bold move not only enhances the company’s operational efficiency but also strengthens its environmental credentials.