India’s buildings are silent power guzzlers. According to a 2017 survey conducted by the Ministry of Statistics, Planning and Implementation (MOSPI), residential and commercial buildings consume 32 percent of the country’s total electricity. As our cities grow, building energy demand is poised to balloon. According to the Global Buildings Performance Network (2013), by 2030, India would have an addition of 35 billion m2 of new buildings. This corresponds to an increase in CO2 emissions, with commercial buildings alone expected to reach 1370 million tonnes in 2030. Energy efficiency in the buildings sector requires immediate attention because India is building now and inefficiencies in new buildings will be locked in for the next 20-30 years.
Since 2007, the Bureau of Energy Efficiency (BEE) has launched several initiatives to promote energy efficiency in buildings. They introduced the Energy Conversation Building Code (ECBC), empanelled several energy service companies (ESCOs), and continued to build capacity for enforcement. However, these initiatives turned out to be non-starters, largely because mandating and enforcing the code was the responsibility of state governments and municipalities, which resulted in inconsistent enforcement.
India has an urgent need for better building efficiency policies and programs. In order to address this, targeted implementation support in pilot cities or states might be a useful way forward. This could take the form of a phased approach of implementation and enforcement based on the levels of institutional preparedness in different cities with gradual addition of more geographies. In addition, a comprehensive strategy involving implementers, consumers, financial institutions, and the private sector is crucial in order to encourage capacity building and dissemination of information, promote financial products and services, and facilitate innovation and entrepreneurship.
Capacity Building and Awareness
One of the key challenges is the lack of information to building owners and residents on building energy performance. There is also a significant gap in testing, standardization and certification of green buildings. In the absence of certificates or ratings, buyers are unable to make informed choices and remain unconvinced on the incremental costs of more efficient buildings.
Lack of technical expertise and inadequate supply chains make it difficult for implementation agencies to embed the ECBC into building bye-laws, as compliance by the industry and the government’s ability to enforce needs to go hand in hand.
Strengthening implementation capacity and increasing consumer awareness will help maintain consistency and standardization, as well as drive demand for energy efficiency solutions.
Although ESCOs were empanelled by BEE, their access to finance continues to be hampered by poor bankability of projects, which is dependent on reliable and verified energy consumption baselines to assess potential energy and costs savings. Financial products and instruments such as different types of equity, debt, and grants are needed that will help mitigate risks associated with the high initial investment.
Innovation and Entrepreneurship
Four types of building energy efficiency solutions have emerged in the recent past. Construction technology solutions, which promotes better materials, improved building design and technologies for construction; energy efficient appliances and equipment; renewable technology solutions, like rooftop solar; and monitoring and IT enabled solutions which include smart meters, Internet of Things (IoT), and building energy management systems (BEMS).
However, challenges exist when it comes to construction. The unorganized nature of the sector comprising of builders and contractors of varying sizes, capabilities and capacities, and the lack of skilled construction workers, most of whom are migrant labourers makes innovation and the implementation of sustainable building practices difficult. Builders lack incentives in training and skilling workers for construction projects that can run from a couple of months to several years.
The general perception among developers, buyers, and investors is that efficiency does not increase the building’s value as an investment. Split incentives aggravate this, since the developer does not see value in providing this information to prospective buyers as the electricity bills will be paid by the occupants.
Therefore, a greater push for further innovation and entrepreneurship in this sector is important, as well as an investment in building energy performance data to strengthen the market.
If we move forward with current standards and enforcement, existing architecture and ICT as they stand today, building owners and residents in India will face higher energy costs and high electricity consumption for decades, at the same time worsening air pollution and climate change impacts. Through TheCityFix Labs India, WRI India, in partnership with Citi Foundation, has created a platform to facilitate multi-stakeholder collaboration that will help scale innovation in sectors related to water, waste, and energy. The Lab will identify solutions and work with a cohort of enterprises on building efficiency, water management, and waste management that will contribute to building and scaling sustainable built environments.