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Feature | June 2017

On the Right Track

India targets around 30 GW of peak load energy savings by changing into energy efficient home appliances and LED lightings.

Globally, 20 per cent of the total generated energy is used for lighting purposes alone. Experts are of the opinion that the said number has to be revoked considering the challenges arising from climate change issues.

According to some of the published study reports, it is now understood that this high percentage of energy consumption can be brought down to 4 per cent if one resorts to using more energy efficient solutions. Further the study has resulted in developing the more energy efficient Light Emitting Diode (LED) bulbs.

In the recent past, the world has taken a special interest in upgrading its lighting solutions from CFL to LED bulbs and India is no different. It has rolled out several schemes with Energy Efficiency Services Limited (EESL) as the nodal agency. EESL is a joint venture of state-owned companies NTPC Limited, PFC, REC and PowerGrid Corporation and was formed in 2009. According to EESL 'Overall size of the Indian energy efficiency market is estimated to be Rs.74,000 crore and till date the country could tap only 5 per cent of this.'

That unveils the whole picture of the tremendous potential in the Indian market. It is true that the cost of generation is much higher than the cost of energy saving. All are in total agreement when they energy saved is equivalent to the energy produced. Interestingly, the government has streamlined majority of its programmes by putting in place periodic reviews to ensure goals achievement. In one word, attaining energy security by way of energy efficiency is the goal. Here is the list of the parallel scheme running in the country under the EESL.

a) Ujala: The Unit Jeevan by Affordable LEDs and Appliances (UJALA) scheme was launched in 2015 replacing the 'Bachat Lamp Yojana'. In the first year, 9 crore LED bulbs were sold in the country. Resulting in savings of `55 billion ($850 million) in electricity bills.

As on date, over 23.67 crore LED bulbs are being used in the country, with over 16.7 lakh LED tube lights and over 6.3 lakh energy efficient fans. That is not all; the replaced LED street light numbers are as high as 19.7 lakh currently. The result is a saving of 6,156 MW of peak demand. In monetary terms the replacement has led to a saving of Rs.12,300 crore annually.

In carbon emissions too there has been a reduction of a whopping 2.49 crore tonne of CO2 each year. According to the Ministry of Power, 'As India moves towards becoming a 100 per cent LED nation, the potential savings would be around 112 billion units, that translates to reducing carbon dioxide emissions by nearly 79 million tonne every year. Consequently, India's peak load will reduce by about 20 GW and people will save around $6.5 billion worth of electricity bills annually.

b) Ddugjy: The Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) or village electrification programme, here REC is the nodal agency. The Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) programme which was running to for village electrification has been subsumed into the DDUGJY scheme.

According to latest numbers available, out of 597,464 census villages, 593,479 villages are electrified. That means 99.3 per cent of villages in India are electrified. According to www.Garv.gov.in (the dash board of the rural electrification programme), the number of villages that are to be electrified stood at 18,452 in 2014 of which electrified 13,525 (73 per cent) are electrified as on May 20, 2017 and remainder is 3,985, which is just 22 per cent. Earlier it was believed that the village electrification would be completed by May 2018, now the time line is revised to 2017-end.

The programmes also include extending the grid to maximum possible geographical areas of the country. Wherever there is a geographic challenge in putting up a grid, the plan is to have decentralised renewable energy supply mainly from solar and wind.

c) Power for all: While on the one hand, the target is to achieve the rural electrification, that means electricity has to reach every village. 'Power for All' means every house in the country will have access to electricity. When the mission was announced in the 11th Five Year Plan, it was envisaged to attain the goal by 2017 which was revised to 2022. According to Power Minister Piyush Goyal, electricity will reach every house hold by 2019. As on date, 29 states and 7 union territories in the country had signed the '24x7 Power For All (PFA)' document and the set roadmap is under implementation. Utter Pradesh was the last state to sign the document.

According to a World Bank report on Power for all: electricity access challenge in India, 'India has led the developing world in addressing rural energy problems. By late 2012, the national electricity grid had reached 92 per cent of India's rural villages.' Goyal in many instances has cited that 'providing access to reliable and quality power supply to all citizens/establishments by 2019 is the core aim and the Ministry of Power's 24x7 PFA program is aimed at delivering on it.'

d) Uday: Ujwal DISCOM Assurance Yojana (UDAY) is scheme announced to bring back financial strength into the power discoms. The scheme was announced in November 2015. This also is part of affordable and accessible 24x7 Power for All target programme.

According to the government data during the announcement of the UDAY scheme, discoms had accumulated losses amounting to Rs.3.8 lakh crore and outstanding debt of approximately Rs.4.3 lakh crore (as on March 2015). Outstanding debt of discoms has increased from about Rs.2.4 lakh crore in 2011-12 to about Rs.4.3 lakh crore in 2014-15, with interest rates up to 14-15 per cent. In the UDAY scheme, states are to repay 75 per cent of debt by issuing bonds while the remaining 25 per cent will be loans, discoms are required to raise funds through issuance of securities. Through UDAY's four initiatives it is aimed to achieve the following: (i) improving operational efficiencies, (ii) reduction of cost of power, (iii) reduction in interest cost of DISCOMs, and (iv) enforcing financial discipline through alignment with State finances. As on March 31, 2017, 26 states are part of the UDAY scheme. Kerala, Arunachal Pradesh and Tripura are the last three states that joined the programme. According to REC, state bonds worth Rs.2.09 lakh crore and discom bonds worth `0.24 lakh crore have been issued till March 2017.

Climate change
The fight against climate change began in 1992 in Rio de Janeiro at the Earth Summit in which the UN Framework Convention on Climate Change (UNFCCC) took shape. The UNFCCC has been instrumental in initiating climate change mitigation among the countries. It's Conference of Parties (CoP) had taken a serious note of the changes in rise in temperatures and had called for stricter actions. The aim is to limit the temperature rise at 1.5 degree Celsius (this is the pre-industry level of expected temperature rise).

As per International Energy Agency's (IEA) India Energy Outlook-World Energy Outlook special report-2015, fuelled by an affluent population and industrialisation, electricity consumption in India will increase by 4.9 per cent per year till 2040.

Ashok Ganesan, Managing Director at GE Power India Ltd, said 'The size of clean market related to coal-based power generation in India is $3 billion for efficiency and $6 billion for emissions. As on February 2017, thermal (coal, oil and gas) based power generation accounts for 68 per cent of total installed capacity while hydro, renewable and nuclear make-up for the rest.'

To control emissions of greenhouse gases and their impact on climate patterns, it's imperative to usher in energy efficient technologies for coal power generation, especially for old plants to control emissions of gases, dust, and fumes. Energy-efficiency can be the pivot for India to attain its sustainable goals and improving air quality.

He was quick in throwing some light on the solutions and way forward, 'As per a study, 1 per cent efficiency improvement in power generation would typically result in 2-3 per cent reduction in the GHG emissions. A typical R&M solution would improve the efficiency level by minimum 10 per cent. If one assumes ~40 GW of coal capacity currently operating at poor efficiency levels deploys R&M solutions improving their operating efficiencies by say ~10 per cent. The GHG emissions from them would get reduced by at 42 Million Tonne/year from current levels.'

While modifications and retrofits can drive efficiencies and curb emissions, switching to new technologies like carbon capture and storage (CCS) are needed to ensure a sharper reduction in carbon dioxide.

The ongoing efforts from the government side to mitigate the climate change commitments, India has recently unveiled its programme to the world. Minister Goyal presided over the launch of world's largest efficient lighting programme, UJALA - UK (UK Joins Affordable LEDs for All) by EESL in London.

Goyal pointed out, 'A sustainable lifestyle is important for the future of the planet and if the globe has to be saved for the generations to come, it is I, you and we all who have to collectively make a difference and act today itself. We are running out of time. The EESL LED programme in India has grown 140 times in less than two years and I don't think we will find any parallel to that anywhere in the world. EESL would achieve the turnover target of $1.5 million by 2019, concomitant with the GoI's target under the UDAY scheme and 100 per cent rural household electrification.'

Energy efficiency
In addition to the above said programmes there is a dedicated plan in place to improve energy efficiency in all segments. When it comes to power, energy efficiency is the norm, any improvement in equipment especially the volume holding segment of lighting and home appliances. That is where the Bureau of Energy Efficiency (BEE) certification plays the crucial role.

The efforts are not limited to this. The new in the category is the Energy Efficient Buildings programme, wherein the buildings will be retrofitted with energy-efficient lights, fans, ACs. Maharashtra signed an MoU to retrofit 1,500 buildings under PWD in the state with energy efficient appliances. Under the programme EESL intends to bring investment to the tune of Rs.1,000 crore covering more than 10,000 large government/private buildings in next two-three years.

The market
India's share in the Global LED market has increased from a mere 0.1 per cent a couple of years back to around 16 per cent currently. According to the World Bank report, India's energy efficiency market is to the tune of Rs.1.6 lakh crore. This is four times the estimate of Rs.44,000 crore which was made in 2010.

'The success of UJALA has reinforced stakeholder confidence in the promise of DSM (demand side management) and re-established the utility DSM market potential from Rs.44,000 crore estimated in 2010 to Rs.1.6 lakh crore by considering the end use energy efficiency opportunities alone,' said the World Bank report.

This potential will come from the residential end-use appliances, agriculture or irrigation pumping and municipal infrastructure - the top three DSM markets, according the report titled 'Utility scale DSM opportunities and business models in India'. Further to strengthen the green initiatives and fight against climate change, there is a push in the direction of tapping renewable energy with thrust on solar and wind energy. If GoI's numbers to be believed, then nearly 57 per cent of the country's electricity capacity will be from non-fossil fuels by 2027.

Recalling here the Paris Climate Accord, India has set the target to make 40 per cent share of its energy mix renewable by 2030. Going forward, the expectation is that more investments will be flowing into the country's energy efficiency programmes.

Unlike the earlier days, banks and financial institutions also will be looking at the large opportunities in India.

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