Energy Efficiency Initiatives in India

Sanjay Seth
Energy Economist
Bureau of Energy Efficiency
Ministry of Power
Government of India
 Energy Efficiency – the Indian
experience

 Energy efficiency makes economic sense – and is

happening
 Yet, there are unexploited opportunities – due to
market failures
 Public policy aims to address these market failures
through:
• Information on energy performance
• Standards
• Promoting demand side management and performance
contracting
• Market-based mechanisms
 International cooperation can accelerate the
introduction and early adoption of energy-efficient
technologies
 Public policy nudges have led to real and verified
savings • Page 2 of 22
Energy Intensity continues to decline

• Page 3 of 22
Largely because energy is costly

 Scope for further

increases in energy
prices are negligible

• Page 4 of 22
Future Energy Use in India

 Energy demand is increasing due to rising incomes,

accelerated industrialization, urbanization and
population growth
• 2003-04 : 572 Mtoe
• 2016-17 : 842-916 Mtoe
• 2026-27 : 1406-1561 Mtoe

• Page 5 of 22
Regulatory Framework for energy
efficiency in India

 Energy Conservation Act, 2001

 Created Bureau of Energy Efficiency
 Appliance standards and labeling
 Energy consumption norms, and energy-use reporting
requirements for energy-intensive industrial units
 Energy Conservation Building Code for commercial
buildings
 Certified Energy Managers and auditors
 National Action Plan for Climate Change, 2008
 National Mission on Enhanced Energy Efficiency
provides mandate for market-based mechanisms to
promote energy efficiency
 National Mission on Sustainable Habitat seeks to
incorporate energy-efficiency requirements in building
byelaws
• Page 6 of 22
Technological change is the key

 Installation of energy-efficient infrastructure,

equipment and appliances is essential for
• Meeting energy demand
• Managing energy security, and
• Meeting climate goals

 Technological transitions – both deployment and

development - are important in
• Power generation
• Buildings, especially commercial buildings
• Equipment and appliances
• Industry
• Mobility

• Page 7 of 22
Information helps consumer decisions

STAR RATING FOR

BUILDINGS

Energy Performance Index:

kWh/ sq m/ year

Name of the Building :

Category of Building :
Type :
Climatic Zone :
Connected Load :
Build up Area :

• Page 8 of 22
Labels built up as a “brand”

 Voluntary labels for refrigerators and airconditioners

introduced in December 2006
 Aggressive advertising and outreach promoted labels
as a brand of superior products – manufacturers
piggybacked on label advertising
 In 2008-09, 75% of refrigerators, and 50% of air
conditioners sold in the market were labeled –
showing consumer preference and market
transformation
 Labeling became mandatory for four products (where
market transformation is well under way) from 7th
January, 2010
 Voluntary labels in place for eight other appliances
• Page 9 of 22
 In industry, new plant is amongst most
energy efficient in the world – but there
is large bandwidth of energy efficiency
16 6
2005-06
14
5

No. of Industries
12
Number of Units

4
10
8 3
6
2
4
1
2
0 0
550-600 600-650 650-700 700-750 750-800 800-850 850-900 900-950
3.0 - 5.5 5.5 - 8.0 8.0 - 10.5
Therm al Specific Energy consum ption, Kcal/kg-clinker
GCal/ton of paper
 A wide bandwidth of energy efficiencies
occurs in almost all industry sectors
 This creates a differentiated potential for
energy savings
 Trading of savings allows maximum cost-
effective savings as plants with “low-cost
savings” exceed their “mandated “
savings for trading them with other plants
which are unable to meet their targets
 “Perform, Achieve & Trade” mechanism
introduced for 580 industrial units which
have to meet SEC reduction targets • Page 10 of 22
 Perform, Achieve and Trade (PAT)

 The units covered by the programme consume about 200

million toe annually, of the total of 400 million toe of
commercial fuels consumed annually in India
 The goal is that the gate-to-gate specific energy
consumption of these units, collectively, is about 5% less
in 2013-14 than it was in 2008-09
• Each sector is subdivided into a number of clusters based
on input and output differences, and on the basis of
statistically significant differences in their SECs
• The allocation of SEC reduction targets within a cluster is
based on the relative SECs of units – less efficient units
have larger SEC %-reduction targets – so that the collective
SEC reduction in a cluster is 5%
 ESCerts (and penalties) would be based on the achieved
SEC and the target SEC, and will be computed on the
basis of the baseline-year production • Page 11 of 22
 Certification of Energy Managers and Energy
Auditors

 National exam to certify energy managers and energy

auditors
• Candidates who qualify in three base papers are certified as
energy managers
• Energy Auditors have to qualify in an additional paper
 Exam conducted by National Productivity Council
• Ten national exams have been conducted
• Over 15,000 candidates have appeared
• About 7,000 have qualified as energy managers; about 5,000
are also energy auditors
 EC Act mandates roles
• Each designated consumer has to employ an energy manager
• Periodic energy audits of DCs have to be carried out by
energy auditors
• Page 12 of 22
 Energy Conservation Building Code

 ECBC covering the following components prepared:

• Building Envelope (Walls, Roofs, Windows)
• Lighting (Indoor and Outdoor)
• Heating Ventilation and Air Conditioning (HVAC) System
• Solar Hot Water Heating
• Electrical Systems
 Voluntary introduction of ECBC in May 2007; mandatory
after capacity building and implementation experience
 Easy to use guides, tip sheets launched
 Panel of architects prepared to help dissemination of ECBC
 Curriculum enhancement in architectural institutions
 Government agencies taking the lead in ECBC
implementation
• Page 13 of 22
 Enhancing Energy Efficiency of
Existing Buildings

 Program for energy audit and retrofit in central

government and state government buildings
• 8 building retrofits completed; 6 buildings used ESCOs
to carry out retrofits through performance contracting
• Experience used to develop model agreements for
ESCOs
• Over 500 buildings now being targeted for upgrades
through ESCOs
 ESCOs promoted through model contracts,
accreditation, ratings, and financing
• Identification, accreditation and rating of ESCOs
• Project-based financing of accredited and rated ESCOs
 Also being promoted for:
• Municipal lighting and water pumping
• Agricultural pumpsets
• Supporting initiatives by electricity distribution
companies • Page 14 of 22
 Bachat Lamp Yojna
(Lamp Savings Project)

• Of the approximately 1 billion light points in India, about

600 million use CFLs
• CFL penetration in commercial sector is almost complete –
but low in household sector
• “Bachat Lamp Yojana” facilitates firms in providing CFLs to
households at the price of incandescent bulbs
• The difference in cost would be recovered through the
carbon credits that accrue because of their lower energy use
- CDM Programme of Activities has been registered to enable
quick registration of many small projects
• About 300 to 400 million lamp replacements are targeted
- Approximately 20 million have already been replaced since
October 2010
• Page 15 of 22
Verified energy efficiency gains – 11th Plan

Fuel Avoided
Savings Generation
Capacity
million toe MW

2007-08 2.86 623

2008-09 4.98 1504

2009-10 3.96 2868

2010-11 4.44 2882
2011-12 4.207 2959
(upto Dec 2012 )
Total 59.21* 10,836
* Compounded cumulative fuel savings
• Page 16 of 22
 Both supply “push” and demand “pull” are
necessary

 Coal-based generation
• Minimum efficiency requirements for new plant
• Tariff-based bidding to sell electricity
 Commercial buildings
• Energy conservation building code
• Retrofits by ESCO-driven performance contracting
• Energy performance labeling
 Industry
• Energy consumption norms in industry
• Market mechanisms to promote energy efficiency in industry
 Equipment and appliances
• Minimum energy performance standards
• Energy performance labeling
• Page 17 of 22
International Cooperation can accelerate
introduction of energy-efficient technologies

 Rapid development and adoption of much-more energy

efficient technologies is often constrained by:
• Costs that are higher than those which a large number of
consumers are able and willing to pay
• High risk perception regarding performance of new
technologies
• Lack of large markets that incentivize manufacturers to
bring super-efficient products early into the market
 Global cooperation – especially on appliances/devices
amenable to global standards – can help in aggregating
demand and finalizing specs
 SEAD (Super-efficient Appliance Deployment) initiative is a
good first step in this direction
• LED standards have been finalized
• TV standards are in the process of being finalized
• Page 18 of 22
International Cooperation has been central
to our efforts

 Programme design has been influenced by, and has

drawn on:
• Energy Conservation Law of Japan, and the Japanese
energy manager and top-runner approaches
• Building energy efficiency programme of the US
• Appliance standards and labeling programmes of the EU
and US
• DSM programmes in EU and France
• Institutional outreach for energy efficiency technology
dissemination in Germany
 Several national experts (from Germany, France and
Japan) have been located in BEE to support programme
design
 International study tours build capacity of public sector
officials and private-sector experts
• Page 19 of 22
Public policy nudges are important to
enhance the rapid adoption of cost-effective
technologies

 Energy efficiency makes sense – in most instances,

people and firms make energy-efficient choices; yet
instances of non energy-efficient investments – which
are of economic disbenefit - continue to abound
 Lack of information, risk aversion, and high discount
rates seem to be drivers of these (irrational) decisions
 Public policy nudges help create and strengthen
markets for energy savings which are sustainable
• Voluntary programmes a good way to find out if people
will respond; this also helps fine-tune them
• “Branding” has turned out to be a very effective tool
• Market “creation” incentivizes early introduction of
energy-efficient technologies
• In retrospect, perseverance, consultation, impact
assessment and course-correction have been of most
importance • Page 20 of 22
www.bee-india.nic.in

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