1.4 & 1.9 Energy Conservation Potential in Industries+Commercial & Barriers

8/13/2019 1.4 & 1.9 Energy Conservation Potential in Industries+Commercial & Barriers

1/15

PROMOTION OF ENERGY CONSERVATIONIN THE COUNTRY

1.0 Introduction

1.1 Indias energy intensity per unit of GDP is higher by 3.7 times of Japan, 1.4 times ofAsia and 1.5 times of USA, indicating to very high energy wastage but also potential ofsubstantial energy saving. In the WTO regime, countries with high-energy intensity mayactually face deceleration in the economical growth due to high-energy input cost. Theincreasing global trade liberalization and growing global competition have made productivitydevelopment including energy cost reduction, one of the more important bench-marks foreconomic success.

1.2 Indias projected economic growth rate is slated at 7.4% in the period 1997-2012(Planning Commission). This would necessitate commensurate growth of commercialenergy resources (energy / GDP elasticity around one) most of which is expected to be fromfossil fuels and electricity. To bridge peak power shortages (13 to 15%) and averageshortages (8-10 percent), India would require by 2012 a fresh capacity addition of nearly100,000 MW (assessed by Central Electricity Authority) more than 75% of which is likely tobe coal based. This would require an investment of Rs.8, 00,000 crores.

1.3 Though the share of coal in the commercial energy usage in India has declined from80% to 29%. Petroleum fuels share has, however, increased from 16% to 54% in the periodfrom 1953 to 1997 as shown in table 1 below.

Table 1

Final Commercial Energy (%)

Year Coal Petroleum Natural Gas Electricity TOTAL1953-54 80.1 16.7 0.0 3.2 100

1960-61 75.3 19.9 0.0 4.8 1001970-71 56.1 34.1 0.6 9.2 1001980-81 47.9 40.3 1.1 10.7 1001990-91 35.9 43.6 5.5 15.0 100

1996-97 29.3 46.8 6.9 17.0 100Source: Planning Commission

1.4 The Planning Commission has assessed that the trend of increasing petroleum sharein the business as usual scenario will continue as projected in the table 2 below.


2/15

Table 2REQUIREMENT OF COMMERCIAL ENERGY FOR FINAL

CONSUMPTION (BAU SCENARIO)

Source Units 1994-95 2001-02 2006-07 2011-12

Electricity Trillion Watt Hours 289.36 480.08 712.67 1067.88

Coal Million Tonnes 76.67 109.01 134.99 173.47Lignite Million Tonnes 4.85 11.69 16.02 19.70

Natural Gas Million Cubic Meters 9880.00 15730.00 18291.00 20853.00Oil Products Million Tonnes 63.55 99.89 139.95 1996.47Source: Planning Commission

1.5 The projected growth the @ 6.8% of coal sector during the period 1997-2012 maynecessitate imports of 40 million ton by the year 2002 and about 210 MT by 2012. Thecontinued increasing trend of petroleum fuel in the consumption of commercial energy willmake the country uncomfortably dependent on imports of fuel. The fact that even part ofcoal requirement is to be imported in the near future makes the energy security positionlooks quite precarious. Such a trend obviously militates against the energy security apartfrom adversely affecting the overall economy. The Planning Commission has projected

domestic production and import requirement of different sources of commercial energy(BAU) as below in table 3

Table-3 : Import Requirement

Import Requirements 2001-02 2006-7 2011-12

a) Coal (Million Tonnes)b) Oil (MillionTonnes)c) Petroleum Products (Million

Tonnes)

39.9478.022.46

86.80110.0020.74

210.36155.0041.55

Source : Planning Commission

1.6 Therefore, a paradigm shift in our approach to energy policy issues a shiftfrom supply domination to an integrated approach a judicial mix of investment insupply side efficiency, operational efficiency improvement of existing powergenerating station, T&D losses reduction, end use efficiency and renewabletechnologies is needed. Integrated resource planning and demand sidemanagement (DSM), including active promotion of efficiency in electricity end uses,should evidently constitute our energy strategy. The policy goals and concepts willhave to be shifted from energy conservation to energy efficiency and fromenergy inputs to the effectiveness of energy use and energy services

2. Energy resources and security

Indias proven coal reserves at 70 billion tonnes, may last for more than 200 years,the limited Known oil and natural gas reserves which may last only 18 and 26 years for oiland gas respectively, is a cause of concern. The large gap between production and demandof petroleum products eats up nearly 25% of export earnings.


3/15

Table 4Energy Resource Proven Reserves (end 1996) India & World

Crude Oil Natural Gas Coal

Billion KL R/P Trillian M3 R/P MillionTones

R/P

India 0.8 17.8 6.7 26.0 74733 258

World 164.4 41.0 146.4 61.9 984211 230Share 0.5 0.47% 7.6%

Note: The reserves to production (R/P) indicate the length of time the reserves would last ifproduction were to continue at the current level.

3. Energy Efficiency & Conservation.

In a broad sense, energy efficiency means economizing on the use of energy withoutadversely affecting economic growth and development. It includes improving the efficiencyof energy generation, transmission and distribution and efficient end use of energy.

The cost effectiveness of energy conservation/efficiency measures is wellestablished as one unit of energy saved at the consumer end avoids nearly 2.5 to 3 times ofcapacity augmentation due to plant load factor, plant availability, auxiliary powerconsumption T&D losses etc. Energy savings achieved through energy efficiency &conservation apart from saving the investment required for additional capacity also avoidscapital investment in fuel, mining, transport, water and land required for power plant. Thepotential of energy efficient options, which save costs to the consumer, utility and society aswell, has, therefore, to be fully harnessed.

4. Energy Conservation Potential

Table 5 gives a fairly conservative potential for energy conservation in varioussectors. Nearly 25000 MW equivalent of capacity creation (Negawatt NW) through energyefficiency in the electricity sector alone, has been estimated in India.

Table 5: Energy conservation potential in various sectors of economy

Sector Potential (%)Economy as a whole Up to 23

Agricultural Up to 30Industrial Up to 25

Transport Up to 20Domestic and Commercial Up to 20

Source-Planning Commission

5. Energy Efficiency Potential for different Sectors

Energy efficiency potential, cost benefit of energy saving, promising technologieswith associated techno-economic saving potential etc. in different sectors are analysedbelow:-


4/15

(A) Industrial Sector

Industrial sector in India is a major energy user, accounting for about 48% of thecommercial energy consumption. Energy saving potential is up to 30% through retrofittingsin this sector. Some of the estimates made by different study reports for energyconservation in energy intensive industries is given in table 6.

Table- 6: Scope for Energy Conservation in Energy Intensive Industries

Data Aluminum Textile ChlorAlkali

Petrochemicals

Fertilizer Sugar Paper Cement

EnergyConsumption(million Gcal)

30.1 52.5 20.0 5.8 112 100 26 67

Energy costas a % ofmanufacturingCost

40 13 30-35 7 60 12 25 40

Scope ofenergyconservation(%)

15-20 20-25 15 15 10 20 20 10

B) Agriculture

Agriculture sector consumes nearly 30-35% of total power with over 30% of energysaving potential due to use of very inefficient pump-sets. Out of nearly 13 million pump-setsin India, about 60% are electric motors driven and rest by the diesel engines. Approximately0.6 million electric pump-sets are added every year.

Small-scale experiments on rectification of agricultural pump-sets have establishedthat the consumption of diesel and electricity used in agricultural pumps can be reduced by30% to 50% of the present levels with a simple pay-back period of about a year. As muchas Rs. 72 billion can be saved annually through energy efficiency in these pumps. Thepotential for improvement through pump rectification measures is given in Table. 7

Table 7: Potential for improvement in Agriculture Sector

Code Scope of Rectification Reduction in Energy consumption in %(kWh per pump per year)

R1 Low resistance foot-valve and low frictionsuction pipe of proper diameter

20 to 25%(1000 kWh to 1250 kWh)

R2 R1 + low friction delivery pipe 30 to 35%(1500 kWh to 1750 kWh)

R3 R2 + replace pump by one of higherefficiency

40 to 45 %(2000 kWh to 2250 kWh)

R4 R3 + replace motor by one of lower rating 50 to 60%(2500 to 3000 kWh)

Source: Bulletin on Energy Efficiency


5/15

C) Commercial Sector

Electricity is a major energy used in the commercial sector in India. Heating Ventilation & Air conditioning (HVAC) systems, heat pumps load management systems &control, refrigeration systems / freezers, high-efficiency boilers , Building control, insulation,window coating & films, power factor correction systems and combined heat & power plantsare some of the technologies included in investment to bring about energy saving.

D) Residential Sector

Residential sector in India consumes about 17% of total electricity. Major end usesare lighting fans, refrigerator, air-conditioner, water heaters etc.

E) Demand Side Management

India currently faces a peak capacity shortage of about 13% and approximately 10%of the total energy demand is left un-served. Chronic power shortages have resulted involtage reduction, involuntary load shedding and installation of captive generation.

The increased electricity end-use efficiency and Demand Side Management (DSM)can mitigate power shortages and drastically reduce capital needs for power capacityexpansion. DSM can be achieved through energy efficiency, which is reduction of kilowatt-hours (kWh) of energy consumption or demand load management, which is a reduction ofkilo watt (kW) of power demand or displacement of demand to off-peak times. For practicalpurposes DSM could cover all sort of activities which will help a utility in

A) reducing peak demandB) shift demand from peak to off-peak periodC) end-use energy efficiency to reduce overall demand electricity.

In other words, utility driven end-use efficiency and load management is consideredas DSM.

Table 8 : Strategic Conservation Options All India Saving potentialIn FY 2004 from DSM and Energy Efficiency Option

Source: World Bank

Option Energy Saving Possiblein 2004/05 (MWh)

Peak Generation SavingsPossible In 2004/05 (MW)

Low Case High Case Low Case High CaseVariable Speed Drives in Industry

Agricultural Pump Rectification

Motor Rewinding, Downsizing

Agricultural Pump Metering

High- Efficiency Agri. Pump sets

Improved High-Eff. Refrigerators

Compact Fluorescent Lamps andElectronic Ballasts

11,140

7,950

10,214

3,985

9,086

3,667

3,311

17,882

12,738

16,369

6,385

14,558

5,880

5,313

2,674

2,678

2,918

1,275

3,060

837

2,337

4,285

4,291

4,677

2,043

4,904

1,342

3,750


6/15

In the background of skewed tariff and un-willingness on the part of the utilities to promoteenergy efficiency among the high paying consumers viz. industries and commercial,following DSM activities are likely to receive support from Utilities.

(1) Agriculture DSM

In-efficient use of energy in the agriculture sector can be the corner stone of utility drivenDSM strategy. This will require not only replacement of pump sets and the entire pumpingsystems with an efficient one but will also require encouraging Energy Service Companies(ESCOs) to take up the same in an agreement which will involve Utility as well as farmers fora sustainable results. Reasonable tariff on agriculture will further give boost to agricultureDSM.

(ii) Municipal water pumping

Municipal water pumping is high energy in-efficient in India. The potential for saving isestimated to be over 30 to 40%. The investment in replacement of pumping system andplugging leakages could save energy over 40% with low pay back period. Thus this couldbe implemented in all the major municipalities through performance guarantee contractmechanisms by ESCOs.

(iii) Power factor correction

Notification for penalty for low power factor or incentives for near-unity power factor for allthe HT consumers and LT commercial/individual consumers will give significant gains interms of energy savings to the utilities. Such notification will help in developing market tomake investment on performance contracting mechanisms.

(iv) Time-Of-Use Tariff (TOU)

Introduction of Time-Of-Use Tariff will incentivise energy intensive HT customers to shiftactivities/part activities to off-peak period to take advantage of low tariff. This can give a

very major gain to utilities to reduce peak demand. However, to introduce TOU tariffrequires trivector meters and a complete computer software and hardware to manage thesame.

(v) Water pumping in high rise buildings

Water pumping in major buildings is very energy in-efficient. The utilities could promoteenergy efficient pumping systems through notification and promote implementation throughmarket mechanisms.

(vi) Domestic Lighting

Lighting loads generally coincide with the peak demand of the utility. Hence targeting

lighting efficiency improvements would be in the interest of utility to reduce peak demandand strategic conservation i.e. reducing overall average consumption of the utility. The latestlighting technologies utilizing compact fluorescent lamps, fluorescent tube lights withelectronic chokes would need to be encouraged for domestic sectors.


7/15

6. Barriers to Energy Efficiency

Considerable untapped potential exists for curbing wasteful use of energy estimatedto be of the order nearly 30 per cent of the total consumption of commercial energy. Thesize of energy efficiency markets growing @ 10% annually in India is estimated to be in therange of Rs. 200 to Rs. 300 billion.

In spite of many efforts and benefits of energy efficiency several technical financialmarket and policy barriers have constrained the implementation of energy efficiencyprojects.

(a) Lack of Awareness: The main barrier to energy conservation is the lack ofawareness by industry managers of the potential gains from improved efficiency.Industrials well as Government of customers, are yet to take into considerationfactors such as tax credits, depreciation benefits, electricity price escalation, life cyclesavings of the investment and the time release of money.

(b) Lack of Widespread Education and Training: Shortage of widespread educationalopportunities in energy management and conservation and appropriate facilities; lackof trainers and auditors.

(c) Economic and Market Distortions: Irrational response to conservation measuresbecause of inappropriate pricing and other market distortions, or socio-economicfactors.

(d) Lack of Standardization and Labeling of Equipment / devices. Slow rate ofprogress in achieving higher standards of energy consumption in equipment andappliances.

(e) Lack of financing:- The lack of credit and the inability to obtain financing for projectsare strong deterrents to investments in energy efficiency in India.

(f) Lack of Effective Co-ordination:- In India, the lack of effective national-level co-ordination and promotion of energy conservation activities have been a majorconstraint to achieving energy efficiency.

7. POLICY FRAMEWORK- ENERGY CONSERVATION ACT-2001

With the background of high energy saving potential and its benefits, bridging the gapbetween demand and supply, reducing environmental emissions through energy saving, andto effectively overcome the barrier, the Government of India has enacted the EnergyConservation Act- 2001. The Act provides the much-needed legal framework andinstitutional arrangement for embarking on an energy efficiency drive.

Under the provisions of the Act, Bureau of Energy Efficiency has been establishedwith effect from 1st March, 2002 by merging erstwhile Energy Management Centre of

Ministry of Power. The Bureau would be responsible for implementation of policyprogrammes and coordination of implementation of energy conservation activities.

Important features of the Energy Conservation Act are:


8/15

7.1 Standards and Labelling

Standards & Labelling (S&L) has been identified as a key activity for energy efficiencyimprovement.

The S&L program when in place would ensure that only energy efficiency equipment andappliance would be made available to the consumers.

The developed countries which had implemented S&L program through market push andpull have been in a position to demonstrate energy saving of the order of 10000 MW which isthe highest by a program in a very short span of time.

The main provision of EC Act on Standards and Labelling are:

Evolve minimum energy consumption and performance standards for notifiedequipment and appliances;

Prohibit manufacture, sale and import of such equipment which does not conform tothe standards;

Introduce a mandatory labelling scheme for notified equipment appliances to enableconsumers to make informed choices;

Disseminate information on the benefits to consumers.

The key activities under the S&L program would include:

(a) Situation analysis

This exercise is required to be carried out to assess the current Indian S&Lprogram (voluntary program of Bureau of Indian Standards).

(b) Testing (agreed testing procedures and testing protocol is a must for a good S&Lprogram)

(c) Labelling program should precede standards program.

Labelling program would educate consumers to make educated and informedchoice at the point of purchase.

Labelling program when in place would provide the much needed market pull fortransferring from lower energy efficiency level to higher-level efficiency.

(d) Minimum Energy consumption and Performance Standards (MEPS).

MEPS states lower limit for energy consumption for a defined purpose. After atransition phase, which may be 2-3 years during which manufacturers arerequired to convert their facility to produce equipment which conform to MEPS.

In other words MEPS ensures that after the kick-off date, no manufacturer cansell specified product if it does not conform to the minimum standards.


9/15

This ensures level of efficiency increases in domestic appliances and engineeringproducts.

Action initiated

The Governing Council of BEE under the Chairmanship of Minister of Power in its firstmeeting held on 5

th July has approved name of the following equipment/appliances for the

purposes of fixing minimum standards of energy consumption and for fixing energy labels onthe same.

1. Household Refrigerating Appliance Refrigerators with or without low temperaturecompartment.

2. Room Air Conditioners (unitary)

3. Stationary storage type electric water heater

4. Electric Motors up to 100 KW

5. Agricultural pump sets including horizontal centrifugal pumps, mono set pumps andsubmersible pump sets up to 15 KW.

6. Electric light sources, control gears and luminaries including tubular fluorescentlamps, ballast for tubular fluorescent lamps (inductive type), electronic ballast, andluminaries and compact fluorescent lamps.

7. Industrial fans & blowers up to 100 KW.

8. Air compressors up to 100 KW.

Preliminary discussions have already taken place with manufacturers of refrigerators, airconditioners, agricultural pump sets, motors etc. Regarding procedure to fix labels and

setting standards for minimum energy consumption.

7.2 Designated Consumers

The main provision of the EC Act on designated consumers are:

The government would notify energy intensive industries and other establishments asdesignated consumers;

Schedule to the Act provides list of designated consumers which covered basicallyenergy intensive industries, Railways, Port Trust, Transport Sector, Power stations,Transmission & Distribution companies & Commercial buildings or establishments.

The designated consumer to get an energy audit conducted by an accredited energyauditor;

Energy managers with prescribed qualification are required to be appointed ordesignated by the designated consumers;

Designated consumers would comply with norms and standards of energyconsumption as prescribed by the central government.


10/15

Actions initiatedThe Governing Council of BEE has accorded approval for notification of 3 designatedconsumers namely, Cement, Paper & Pulp & Textile sector for the purpose ofoperationalizing the EC Act 2001. Only those units having either connected load of 5000 MWor energy consumption equivalent to 30,000 tonne of oil equivalent would be required to getthe energy audit done from an accredited energy auditor. The conduct of energy audit andimplementation of its recommendation on the cost-benefit analysis is expected to help thedesignated consumers to achieve significant reduction in their energy consumption levels.

Regarding fixation of specific energy consumption norms for designated consumers, it isproposed to evolve such norms based on the various factors such as vintage of plants,capacity, technology adopted, raw-material used etc. and the process would take at least 2-3years time. Also these norms are proposed to be set up through voluntary programme onIndian Industrial Program for Energy Conservation (IIPEC) based on a similar modeladopted by the Office of the Energy Efficiency, Government of Canada, i.e. CanadianIndustrial Programfor Energy Conservation (IIPEC).

7.3 Certification of Energy Managers and Accreditation of Energy Auditing firms

The main activities in this regard as envisaged in the Act are:

A cadre of professionally qualified energy managers and auditors with expertise inpolicy analysis, project management, financing and implementation of energyefficiency projects would be developed through Certification and Accreditationprogramme. BEE to design training modules, and conduct of a National levelexamination for certification of energy managers and energy auditors.

Actions initiated

The Governing Council of Bureau has accorded approval to the conduct of a nationalexamination (two times in a year) for the certification of energy managers and energyauditors. The National Productivity Council would be retained as national certifying agencyto conduct the above examination based on the approved syllabus/curriculum. Theempanelment of institution/franchises would be done to provide training for certificationcourse to the prospective candidates. The scheme for awarding temporary accreditation toexisting energy audit firms for a period of 3 year or till December 2005 has also beenapproved.

Under the Energy Conservation Act, the training for energy managers and energy auditorswill be a four-tier strategy consisting of

Performance test codes for energy intensive technologies.

Best Practice Manual as supplement to the Code

Case studies to illustrate implemented projects

Software to support Code acceptance

Bureau of Energy Efficiency would develop performance test code in association with Indo-German Energy Efficiency Project for 20 energy intensive/technologies. These. code would


11/15

be followed uniformly by all the energy auditors and energy managers while undertakingenergy audit of the facility.

Training for energy managers and auditors

The Bureau would develop an elaborate strategy of providing training for Energy Auditorsand Energy Managers in codes, best practices, case studies and software by

a) Training the trainers at NPC Chennai, TERI, which are to be developed asResources Centres

b) Training the trainers of the empanelled institutions, which would run certificationcourse.

c) Incorporating the codes and best practices in the syllabus of certificationexamination, and

d) Periodical refresher and sector specific training to Energy Auditors and EnergyManagers at NPC, Chennai and TERI.

7.4 Energy Conservation Building Codes

The main provisions of the EC Act on Energy Conservation Building Codes are:

The BEE would prepare guidelines for Energy Conservation Building Codes (ECBC);

These would be notified to suit local climate conditions or other compelling factors bythe respective states for commercial buildings erected after the rules relating to energyconservation building codes have been notified. In addition, these buildings shouldhave a connected load of 500 kW or contract demand of 600 kVA and above and areintended to be used for commercial purposes;

Energy audit of specific designated commercial building consumers would also beprescribed.

7.5 Central Energy Conservation Fund

The EC Act provisions in this case are:

The Fund would be set up at the Centre to develop the delivery mechanisms for large-scale adoption of energy efficiency services such as performance contracting andpromotion of energy service companies. The fund is expected to give a thrust to R&Dand demonstration in order to boost market penetration of efficient equipment andappliances. It would support the creation of facilities for testing and development and topromote consumer awareness.

7.6 Bureau of Energy Efficiency (BEE)

The mission of Bureau of Energy Efficiency is to institutionalize energy efficiencyservices, enable delivery mechanisms in the country and provide leadership to energyefficiency in all sectors of economy. The primary objective would be to reduce energyintensity in the Indian Economy

The general superintendence, directions and management of the affairs of the Bureau isvested in the Governing Council with 26 members. The Council is headed by Minister ofPower and consists of members represented by Secretaries of various line Ministries,the CEOs of technical agencies under the Ministries, members representing equipment


12/15

and appliance manufacturers, industry, architects, consumers and five power regionsrepresenting the states. The Director General of the Bureau shall be the ex-officiomember-secretary of the Council.

The BEE will be initially supported by the Central Government by way of grants throughbudget, it will, however, in a period of 5-7 years become self-sufficient. It would beauthorized to collect appropriate fee in discharge of its functions assigned to it. TheBEE will also use the Central Energy Conservation Fund and other funds raised fromvarious sources for innovative financing of energy efficiency projects in order to promoteenergy efficient investment.

7.7 Role of Bureau of Energy Efficiency

The role of BEE would be to prepare standards and labels of appliances andequipment, develop a list of designated consumers, specify certification andaccreditation procedure, prepare building codes, maintain Central EC fund andundertake promotional activities in co-ordination with centre and state level agencies.The role would include development of Energy service Companies (ESCOs),transforming the market for energy efficiency and create awareness through measuresincluding clearinghouse.

7.8 Role of Central and State Governments

The following role of Central and State Government is envisaged in the Act;

Central - to notify rules and regulations under various provisions of the Act,provide initial financial assistance to BEE and EC fund, Co-ordinatewith various State Governments for notification, enforcement,penalties and adjudication.

State - to amend energy conservation building codes to suit the regional andlocal climatic condition, to designate state level agency to coordinate,

regulate and enforce provisions of the Act and constitute a State

Energy Conservation Fund for promotion of energy efficiency.

7.9 Enforcement through self-regulation

E.C. Act would require inspection of only two items. The following procedure of self-regulation is proposed to be adopted for verifying areas that require inspection of only twoitems that require inspection.

The certification of energy consumption norms and standards of production process bythe Accredited Energy Auditors is a way to enforce effective energy efficiency inDesignated Consumers.

For energy performance and standards, manufacturers declared values would bechecked in Accredited Laboratories by drawing sample from market. Any manufactureror consumer or consumer association can challenge the values of the othermanufacturer and bring to the notice of BEE. BEE can organize for challenge testing indisputed cases as a measure for self-regulation. BIS certification scheme is equivalentto the check testing system followed in Australia and hence compliance could be betterby having both BIS certification scheme as well as challenge testing.


13/15

7.10 Penalties and Adjudication

Penalty for each offence under the Act would be in monetary terms i.e. Rs. 10,000 foreach offence and Rs. 1,000 for each day for continued non-compliance.

The initial phase of 5 years would be promotional and creating infrastructure forimplementation of the Act. No penalties would be effective during this phase.

The power to adjudicate has been vested with State Electricity Regulatory Commissionwhich shall appoint any one of its member to be an adjudicating officer for holding anenquiry in connection with the penalty imposed.

8 Strategies for Energy Conservation

Moreover, BEE will be actively associated with the state level designated agencieswho have the responsibility to implement the EC Act within the state and providethem all the necessary support in achieving the defined objectives.

In addition, the Bureau has powers to ask for any information related with theimplementation of the Act directly from any consumer/manufacturers of equipmentand appliances, which would pave for a proper follow up mechanism.

Also, the Bureau is planning to launch web page for various designated consumersto create database as well as provide feedback and information back to thedesignated consumers and other energy users.

The web page for Cement industry on pilot test basis is already on the internet(www.energyindia.info). The homepage of BEE is also on the internet on pilot testbasis (www.bee-india.com)

9. Voluntary measures for promotion of energy conservation

9.1 National Energy Conservation Award Scheme

The Ministry of Power have launched the National Energy Conservation Award Scheme

to encourage, motivate as well as give recognition to industrial units who have taken extraefforts to reduce their energy intensities while maintaining the production levels. TheAwards were given away for the first time on December 14,1991, which was declared asNational Energy Conservation Day.

The Awards are given to the 15 industrial sub-sectors namely aluminium, cement,chemicals, ceramics, chlor-alkali, edible oil/vanaspati, fertilizer, glass, integrated steel, ministeel, paper & pulp, petrochemicals, refineries, sugar and textile plants.

The Award participating units for the years 1999, 2000 & 2001 have collectively annuallysaved

v 4850 lakhs kwh of electrical energy which is equivalent to the energygenerated from a 235 MW thermal power station at a PLF of 60%.

v 5.15 lakhs kiloliters of furnace oil

v 7.58 lakh metric tones of coal

v 7080 lakh cubic meters of gas per year.

v In the monetary terms, these units have been able to save Rs. 11580 million(Rs.1158 crores) per year with an average payback period of 2 years.(The details of savings are given in Table 9).


14/15

Table-9: SUMMARY OF ENERGY SAVINGS ACHIEVED BY INDUSTRIALUNITS PARTICIPATING IN MINISTRY OF POWERS ENERGYCONSERVATION AWARD SSCHEME (1999, 2000 AND 2001)

Electrical EnergySavings

Year Savingin Rs.Crores

Investmentin Rs.Crore

MillionKWh

EquivalentAvoidedCapacityIn MW

FurnaceOil

Savingsin

MillionKL

CoalSavings

inMillionMetrictonnes

Gassavings

inMillionCubic

Metres

2001 587 659 485 90 0.221 0.479 392.9

2000 366 630 524 100 0.1327 0.064 70.71999 205 940 205 45 0.162 0.215 244.4

Total 3year

1158 2229 1214 235 0.5157 0.758 708

Note: On an average a total of 120 industrial units from Aluminium, Cement,Chemicals, Chlor-alkali, Fertilizer, Integrated Steel, Paper & Pulp,Petrochemicals, Refinery and Textile participate every year in the EnergyConservation Award Scheme.

9.2 Energy Conservation Commitment by Industries.

Sustainability of efficient use of energy and its conservation would need corporatecommitment. BEE has already moved in this direction and pursuing top management to givetheir voluntary commitment to energy conservation. The results have already started flowingin and to begin with five energy industrial units have modified their corporate energymanagement policy and included their commitment to reduce 1% of their annual specificenergy consumption by 2010

10 Market mechanism for promotion of energy conservation

Significantly large energy efficiency market exists in India in the form of hugeretrofitting and demand of new efficient equipments for new projects in the emergingeconomy. A number of energy efficiency activities in efficiency projects have beenimplemented through private initiative with extremely remunerative results. In all most all thecases the payback ranged from 6 month to 30 months.


15/15

Energy Saving in Buildings Case Results

Area Units NDMCPK

IIC GangaaramHospital

BatraHospital

AIIMS

PumpsCondenser water

Existing Consumption KW 80 49 37 90 295Proposed Consumption KW 44 36 23 72 207

Savings % 45% 27% 38% 20% 30%

Savings Rs. lacs 5.60 2.12 4.52 4.10 25.00Investment Rs. lacs 1.50 0.60 1.55 - -

ROI % 373% 353% 292% - -Chilled Water

Existing Consumption KW 67 65 38 88 295Proposed Consumption KW 47 39 21 70 207

Savings % 30% 40% 45% 20% 30%Savings Rs.lacs 3.10 3.93 7.98 3.60 25.00

Investment Rs.lacs 1.50 0.90 1.35 - -ROI % 207% 436% 591% - -

HeatingSavings Rs.lacs 7.67 9.50 14.70 8.20 -

Several studies have very conservatively estimated that 18% of the total energyefficiency market can be tapped with ease in the initial phase with some support fromfinancial institutions, development of M&V protocol and effective performance guaranteecontract mechanism by third party i.e. Energy Service Companies ( ESCOs). All the projectshave estimated pay back period ranging from 6 months to at best 18 months only.

Therefore, India would on an urgent basis need to ensure financing of large numberof projects which will have demonstration effect and, therefore, it is expected that thefinancial institutions would proactively support energy efficiency projects and ESCOs would

also emerge.

11. CONCLUSION

Government of India has emphasized that need for energy conservation over the lastthree decades, it is only now that a paradigm shift in our approach towards energyefficiency has been brought forward by the enactment of the Energy Conservation

Act, 2001. This proactive piece of legislation spells out the roadmap for the countryto move up the energy efficiency ladder.

There is a need for collective efforts to translate and legislative intents into concreteaction plans, keeping in view the ground level realities. The collective efforts wouldbe crucial for generating vital inputs with regard to the various implementation issues

as well as identifying areas which require to be pilot tested before beingimplemented on full scale.

Mr. Shashi ShekharDirector General, BEEIIPEC Programme on22

ndSeptember 2002 at

M/s. Shree Cement, Beawar

Documents

1.4 & 1.9 Energy Conservation Potential in Industries+Commercial & Barriers