India is the fastest growing country in terms of demand for energy, as well as the third largest CO2 emitting country in the world. However, India has also placed climate change on high priority, committing to reduce its greenhouse gas (GHG) emissions intensity by 33-35 percent by 2030 from the 2005 levels as part of its Nationally Determined Contribution (NDC), calling for ambitious focus on energy efficiency and renewable energy. This must encompass a top-down approach with conducive, innovative and progressive policies and financial models, and a bottom-up approach that calls for proactive end-user involvement and significant capacity-building across sectors. In 2018, India showed significant determination to meet these commitments through seven key policy decisions which are important steps in India’s clean energy transition.
A unique energy efficiency program for industries, Perform, Achieve, and Trade (PAT), completed its first cycle (including trading) in 2017. In March 2018, targets were notified for the fourth cycle. Under this cycle, 109 Designated Consumers (DC) have been notified from existing sectors and two new sectors – petrochemicals and hotels, with an overall Specific Energy Consumption (SEC) reduction target of 0.6998 million tonnes of oil equivalent – have been included. Cumulatively, a total of 1152 DCs, covering 13 sectors, are now mandated to implement energy efficiency projects to achieve the assigned targets. Despite several challenges, PAT has resulted in significant energy savings, and the journey so far has evolved and provided immense learning on how to develop robust process and stronger trading mechanisms.
In June 2018, Minister R.K. Singh announced that smart prepaid meters would replace all electricity meters in the next three years, starting April 2019. Following the announcement, the New Delhi Municipal Corporation (NDMC) completed the process of installation. Smart meters have also been deployed in pilot cities such as Mumbai, Hyderabad, Mysore, and Chandigarh. This step is expected to revolutionise the power sector by reducing electricity theft, improving accuracy in metering, reducing aggregate technical and commercial losses, DISCOMs’ operational costs, and energy consumption.
The Bureau of Energy Efficiency (BEE) and NITI Aayog, along with the Alliance for an Energy Efficient Economy (AEEE) developed the State Energy Efficiency Index for all states in August 2018. The index examines state-level energy efficiency (EE) policies, adoption of EE interventions, and the resultant energy savings. It includes 63 qualitative, quantitative, and outcome-based indicators across five sectors—buildings, industry, municipalities, transport, and agriculture and the performance of distribution companies. This index can form a baseline for sustained tracking of progress in the sector and encourage states in a race to the top, to improve their performance against their peers.
In September 2018, the Ministry of Environment, Forest and Climate Change (MoEFCC) released the draft India Cooling Action Plan (ICAP), a global first, to address India’s growing cooling requirements across sectors, listing out actions which can help reduce the cooling demand. The document provides interventions and guidelines for commercial buildings to reduce the cooling demand. The aim of the action plan is to reduce cooling demand across all sectors by 20-25 percent by 2037-38. Despite some shortcomings, this is expected to help in reducing GHG emissions due to electricity consumption for cooling.
The Ministry of Power (MoP) also announced a major energy efficiency policy for large commercial chillers in September 2018. The announcement intends to provide star labelling for large commercial and industrial chillers. This program is expected to help in reducing approximately 0.5 million-tonnes of CO2, which is equivalent to planting 5000 billion trees. It is also expected to save more than 4 billion units of electricity, which is approximate the annual energy consumption of the state of Goa, in the year 2030 with CO2 emission reduction of 3.5 million tonnes to help India to meet its Nationally Determined Contributions (NDC) commitment.
In December, MoP launched the Energy Conservation Code for Residential Buildings – the ECO Niwas Samhita 2018. The objective of the code was to boost EE in the residential sector by promoting design interventions in the construction of homes, apartments, and townships. It estimated a reduction of 100 million ton of CO2 emission and savings of 125 billion units of electricity per year by 2030. A similar effort for commercial buildings was made when ECBC (Commercial) was released in 2007. However, it’s implementation was not a success since it lacked adequate supply chains and technical expertise amongst builders, sustainable financial models, and consistent policy enforcement. The success of ECBC (Residential) depends on how well the learnings from ECBC (Commercial) have been taken.
The objective of this document is to provide Energy Conservation (EC) guidelines to large industries that are covered as DCs under the PAT mechanism of the EC Act, 2001. It will be interesting to see how these guidelines will contribute to the larger goal of EC and efficiency improvement and hopefully it will build the capacity of non-achieving industries to achieve targets.
These schemes and directives show progressive development towards achieving India’s NDC commitments with three major programs aimed at reducing 104 million tonnes of CO2. According to the International Energy Agency, India has the potential to reduce 985 Mt CO2-eq by 2040, which is equivalent to the emissions of Australia and Canada combined.
While these policies and directives show us the destination, India now has the difficult task of completing the journey towards higher levels of EE. In the past, similar, though less ambitious, efforts have been undertaken, only to be left incomplete and inconclusive. To ensure that these seven schemes and directives do not suffer a similar fate, there is a need for strong mechanisms that ensure accountability, transparency, timely monitoring and evaluation, overcoming barriers, and corrective actions.