#dnaEdit: Focus on efficiency

The government’s decision to launch three energy efficiency initiatives for multi-storey residential buildings, hospital buildings and diesel generator sets is an attempt to tap into the huge potential for energy efficient design that exists in India. By 2009-10, the annual savings on electricity generation had reached 2,868 MW and conservative estimates pegged the energy efficiency industry at Rs74,000 crore. Ever since the Energy Conservation Act came into effect in 2002, energy efficiency measures have revolved around a standards and labelling programme for consumers, phasing out inefficient agricultural pumpsets, mandating municipal bodies to shift to energy efficient practices, and incentivising builders to follow the Energy Conservation Building Code (ECBC). 

By 2009-10, the National Productivity Council(NPC) verified the electrical energy saving from the five-star rating programme for air-conditioners, refrigerators, tube lights and transformers and the technological shift to LED screens and lights at 2,179 MW or 75 per cent of the saving achieved. In contrast, the savings from the BEE’s Energy Conservation Awards was 358 MW and the demand side management efforts targeting agricultural pumpsets and municipal bodies was 304 MW. The savings through ECBC was negligible at 3.08 MW and from the Bachat Lamp Yojana, which subsidised CFL lamps at Rs15, was 22.43 MW. The figures show where government action is needed urgently. Contrary to popular perception, the agriculture sector contributes to a third of the electricity demand. With subsidised power and no incentive to save power, farmers opt for unregulated pumpsets. In 2012-13, Karnataka’s 20 lakh pumpsets accounted for a subsidy bill of Rs52,000 crore. A study has found that savings of 30-37 per cent could be achieved in areas where energy audits were conducted and standardised pumpsets installed. Similarly, the ECBC went unheeded because it was voluntary; the success of the star ratings labelling system could be replicated to create a market push for energy efficient buildings.

A consulting firm, ICF International, has concluded that India’s energy intensity, the amount of energy used to produce one unit of GDP, reduced 25 per cent from 2000 to 2011. By implication, India is using lesser energy for economic activities. However, India’s energy intensity is much higher than those of many developed countries. With annual energy consumption growing at five per cent annually, India has been desperately tapping multiple sources of energy. Given this context, the savings from energy efficiency measures, estimated at one per cent, is significant. In terms of greenhouse emissions, a 2007-08 NPC study estimated the annual CO2 emission reduction at 9.6 million tonnes. The study also indicated a total energy savings potential of 75.4 billion kWh in various sectors. Interestingly, this figure is larger than the national electricity deficit of 73.1 billion kWh. As is evident, the economic and ecological benefits of energy efficiency have been recognised for over a decade. While the success of voluntary measures is reassuring, increasing recourse to penalties is the best solution going forward.

Often mandatory BEE norms are delayed by industry pressure. The BEE norms on a two-phased increase in car mileage by 10 and 30 per cent, was held up for five years until February 2014 following auto-industry lobbying.

This has delayed the phased roll-out until 2016 and 2022, impacting both oil imports and CO2 emissions. With climate change negotiations reaching a critical period, the energy efficiency programme is a crucial bargaining chip.