EESL’s perspective on implementation of Bachat Lamp Yojana

1. EESL’s perspective on implementation of Bachat Lamp Yojana N.Mohan (Asst. Manager) & Pramod Kumar Singh (Technical Expert) 16th March, 2011

2. Outline • Focus areas of EESL • Different business models likely to be adopted by EESL • EESL’s strategy to identify project areas for BLY implementation • EESL’s approach to maximize project returns in BLY projects • EESL supports BLY to be showcased as utility driven program • Mitigation measures to minimize perceived risks • Outlook on CDM market beyond 2012 • Suggested way ahead to underpin investment in BLY

3. BLY is one of the main focus areas of EESL • ESCO • Investment & Implementation of EE • Buildings • MuDSM in sewage & drinking water pumps • Agricultural Pumping System • Bachat Lamp Yojana • Monitoring & Implementing Govt. Schemes • S&L Programs • EM & EA Certification Examination • PAT Scheme • SEEP • Consultancy Organization • CDM & EE Consultancy • Tendering support for EE projects • Annual Energy Saving Plans • EE in Industrial Sector • Demand Side Management • Resource Centre • Capacity Building of SDAs, Utilities & other stakeholders • Training under 3L Program • Operation of energy manager training website

4. Different investment models likely to be adopted by EESL in BLY • Model 1: Finding an investment and implementation partner through open competitive bidding • Model 2: Finding an investment partner through competitive bidding and then finding a supplier and implementer on lowest cost basis • Model 3: EESL partnering with state agencies (SDA/REDA/SPV etc.) in investment and implementation on mutually agreed shared benefits Model 1 adopted in 7 circles of Punjab allotted to EESL

5. EESL’s strategy to select project areas • Target utilities having higher potential of CER generation • Select areas with low existing CFL penetration – Bring benefits of scale to the project • Select areas having dense population – Ease in distribution / survey / collection / disposal at reduced cost • Meticulous CDM project area (CPA) demarcation – Decide project size close to threshold criteria (60 GWh) to reduce fixed cost associated with documentation, survey etc.

6. EESL’s approach is to maximize project returns • Identification of project area having higher CER generation potential • Negotiating terms with utilities for continuous support • Making the arrangement/model/agreement bankable for convenient financing– e.g Escrow account in partnership, forward agreement for CERs offtake • CFL of higher life time and superior quality to ensure longevity of performance • Disposal as per CPCB/International guidelines for greater acceptability of CERs from buyers • Low gestation period for early registration and CER generation • Performance guarantee from bidders to screen non-serious players that otherwise could result in project delay

7. Extended support from utilities is pertinent for program success – Illustrative examples • Awareness creation – better penetration, lesser misuse, eased distribution • Support during mandatory surveys – baseline, Qpj, monitoring etc. • Periodic spot checks through utility’s billing personnel • Role in case of misuse – sending notice to households involved in misuse • Role during disposal of ICL/CFL – collecting information from households regarding fused CFLs through billing personnel

8. Conducting detailed risk analysis and addressing it through proper planning • Risk in buying inappropriate CFL mix – Two stage baseline survey first from utilities and second by EESL before implementation. Flexible tie up with CFL supplier to cater to deviation in lighting mix • Risk in erroneous inclusion – Documents needed to prepare CPA DD are cross checked before submission and substantiated with proofs – e.g. latest tariff order of states for T&D loss, recent CEA baseline report for grid emission factor etc. • Risk in high CFL failure – CFL specifications to tolerate power quality variation, selection of higher life time CFL • Risk in CFL distribution process – Conducting pilot distribution, Prolonged awareness campaign, Final distribution through kiosks and/or household visits, • Risk in leakage – Qpj survey immediately after CFL distribution, periodic spot checks by utility personnel, action against households in case of misuse with utility support • Risk in non performance by different agencies – Partial investment by EESL, performance guarantee from agencies involved • Risk in monitoring – Survey samples based on random households selection • Risk in carbon market – Portfolio of CERs under bilateral and spot selling options

9. Can BLY survive amidst looming CDM uncertainty? • Post 2012 the market may allow migration of pre 2012 registered CDM projects to other regional markets • Other emerging schemes may have provision of international offsets making CERs fungible – Japanese Voluntary Emissions Trading Scheme • BLY being a small scale CDM project, may have the advantage of less stringent MRV procedures whereas other projects may face tough MRV criteria beyond 2012 • BLY being a social development project, may have higher degree of acceptability as compared to other projects

10. Suggested ways to take BLY forward • Participation through PoA – ease in monitoring & verification, less transaction time & cost as compared to standalone CDM Projects. • Registration before 2012 – high probability of CER off take • Partnership with EESL – to maximize project benefits and sharing investment risk • Extensive role of utilities – for greater program acceptance

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