Energy Efficiency Initiatives in India

1. Energy Efficiency Initiatives in India Sanjay Seth EnergyEconomist Bureau of Energy Efficiency Ministry of Power Government of India

2. 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

3. Energy Intensity continues to decline

4. Largely because energy is costly • Scope for further increases in energy prices are negligible

5. 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 Future Energy Use in India

6. 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

7. 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

8. 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 :

9. 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

10. In industry, new plant is amongst most energy efficient in the world – but there is large bandwidth of energy efficiency 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

11. 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

12. 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

13. 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

14. 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 Enhancing Energy Efficiency of Existing Buildings

15. 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

16. Verified energy efficiency gains – 11th Plan Fuel Avoided Savings GenerationCapacitymillion toeMW 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

17. 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

18. 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

19. 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

20. 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

21. www.bee-india.nic.in