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Energy conservation and energy efficiency can be a substantial solution to present power shortage, Shri R V Shahi, Former Secretary, Ministry of Power

During every summer season (and sometimes even during winter season in many parts of the country), power shortage situation becomes so critical that it leads to law and order problems. In most of the capital towns, and also in some other important towns, where presence of press and media is extensive, the distress situation is captured and projected predominantly. All the efforts of capacity additions are delivering larger power generation capabilities, but they fall short of the demand because the requirement for power is rising at a rate higher than the rate at which capacity additions are taking place. Quite often a comparison is made between what we are able to do in India in terms of capacity and what China has been able to do over last couple of decades. While India has not been able to add more than 5,000 to 6,000 MW as an annual average, China has been able to average more than 70,000 MW annually. There are a number of reasons, which may include also the deficiency in planning process as also project management systems, but two most important reasons which differentiate the situations in India vis-?-vis China are: (a) Chinese political and administrative system of governance, which include the way sanctions and permissions are granted and the way execution can be handled are distinctly different from those in India. We have a much more permissive and democratic approach and allow dissents, protests etc., and (b) the second distinctive feature, which is perhaps more important, is that China has a power plant equipment annual manufacturing capacity of the order of more than 70,000 MW. In India, thus far the only main plant manufacturing organization viz. BHEL has had not more than 5,000 MW per year of capacity till 2007 and now it has risen to about 8,000 MW. Inspite of noises made over the years, there has been a lack of appreciation about the need for substantially enhanced manufacturing capability.

Thus, in the foreseeable future it seems unlikely that the supply of power will exceed the demand. We may have to fight the shortage for a number of years. This is obviously not a happy state of affairs. But, one of the ways we could succeed in diluting the adverse impact of shortage is by introducing efficiency measures in consumption i.e. by way of effective Demand Side Management (DSM). Though, efforts have been made to bring about awareness throughout the country about the national imperative and rationale of energy conservation, even now studies indicate that there is as high and element of inefficiency in consumption as over 20%. Whether it is industry, commercial and office complexes, residential group and agricultural sector, inefficiencies in energy in electricity consumption are rampant. Manufacturers of electrical gadgets keep dumping highly energy inefficient but cheap products and consumers going for such products little realizing that these are electricity guzzlers. Perhaps pricing strategy could have given an appropriate signal to consumers to be conscious of conservation and under the pressure of price, consumers would have been more cautious and careful in using electricity, but in these sectors political expediencies have prevailed over economics and national need to be efficient on electricity consumption.

Under the circumstances, even more aggressive public awareness campaign about the need and economics of energy efficiency is essential. Energy Conservation Act 2001 and the Bureau of Energy Efficiency established by way of implementation of this Act in early 2002 was in recognition of this national need. Since then Bureau of Energy Efficiency has been embarking upon various initiatives to see that energy efficiency measures are understood and implemented across the country. With a view to analyzing the progress made so far on implementation of the Energy Conservation Act and way forward, Infraline Energy and IDFC organized a Round Table at Delhi on 8th July, 2009 which I had the opportunity to co-ordinate and moderate. In order to have the discussions meaningful and effective, a presentation was made by Prof. Chary of Birla Institute of Management Technology, which focused on mostly the issues of concern highlighting the areas which needed to be covered and attended to. And, Dr. Ajay Mathur, the Director General of Bureau of Energy Efficiency, gave, in brief, the progress made so far and also the future prospects.

Firstly, I outline the areas of concern:

  • Standards and Labelling Programme has been left to individual manufacturer's discretion and not made mandatory. It is, therefore, perceived that this has not made this programme deliver what has been expected.

  • Though Energy Conservation Building Code (ECBC) was announced after considerable amount of preparation for a long period of time sometime back, it has not been implemented so far. There is tremendous scope to effect savings in the existing buildings and more so while designing new buildings.

  • When the examinations were conducted for Energy Mangers and Energy Auditors, there was a huge response. More than 4,400 professionals have successfully qualified in these examinations and have been certified. But, most of them are not being deployed in the activities for which they prepared, because most of the provisions of the Act have remained voluntary. Unless compliance becomes mandatory, deployment of these professional would remain uncertain.

  • A number of provisions of the Energy Conservation Act, specifically Sections 30 to 45 which relate to establishment of the Appellate Tribunal, have remained unimplemented. As a result, the responsibilities to be handled by the Tribunal have remained unattended.

  • A large number of industries have not been notified, under the Act, as Designated Consumers. And, therefore, the savings expected from them by taking appropriate measures would not be available.

  • No doubt, a number of training programmes have been conducted for preparing professionals in the field of energy conservation, but at the State level several loose ends exist. State Designated Agencies, in most cases, are such organizations or departments which were already handling a number of other responsibilities. They have been tagged on these assignments for which neither they are adequately staffed nor is there clarity about their jobs and responsibilities.

It has been our usual experience that when a new legislation comes into being, there is a gestation time for formulation and notification of rules, procedures and more importantly the preparatory work, which includes assimilation of the new legislation and accompanying rules across all the stakeholders. In India, inefficient consumption of energy, specially electricity, has been there for several decades. There are industries which preferred to have cheaper technologies and did not regard higher electricity consumption as an important consideration for their procurement. People in general have been much less concerned about electricity consumption for electrical gadgets and have focused more on their prices. The worst has been the situation in agriculture where farmers have preferred to buy cheaper pumps, even though they might be consuming electricity two to three times more than efficient pumps which may be costly. It is indeed an uphill task to change the mindsets of energy consumers across the country. Bureau of Energy Efficiency was established in April, 2002 and a National Action Plan with specific Agenda was launched by the Prime Minister in September, 2002. A number of activities have happened, but no doubt results have been slow in view of the reasons mentioned above. With reference to the specific areas of concern highlighted above the following response may be relevant:

  • Star Rating of products under the Standard and Labelling Programme (started in 2006) has been one of the most important initiatives aimed at effecting substantial savings in electricity consumption. There were a number of issues to resolve while preparing for the launch of this programme. One such issue was whether to cover a large number of products in one go or we should progressively expand the coverage starting with a few products. The second issue, which in fact was more important, was whether the star labels for the products selected should be made mandatory right from the beginning or we should allow a transition period for voluntary compliance and then make it compulsory. It needs to be appreciated that considerable amount of exercise has to be done to examine and evaluate the range of energy consumption in any product before specific criteria could be formulated for rating as Double Star, Tripple Star, Four Star or Five Star. Extensive interactions are necessary with manufacturers to assess their manufacturing and testing capability. Preparation would also include the independent testing facilities to take care of disputed claims. Therefore, capturing a large number of products in one go would not have been practical. The conclusion, therefore, was to identify a few products such as refrigerators, tube light and subsequently Air conditioners and Distribution Transformers. Progressively larger number of products are being included in the Labelling Programme. As regards the second concern as to voluntary and mandatory compliance, there were two schools of thought - (a) right from the beginning Labelling should be made compulsory and enforcement mechanism should be put in place, and (b) there should be a transition period of two to three years during which manufacturers should be asked to prepare on all fronts and through voluntary compliance indentify the areas of gaps and address them. And, thus the industry should be prepared to mandatory compliance to a significant level through such a process. It was also opined that mandatory compliance right from the beginning might lead to corrupt practices during the process of enforcement. Acceptance of Law by the concerned stakeholders and commitment for implementation out of conviction would be a better method of implementation and governance rather than forceful implementation disregarding the essential aspects of learning curves and teething issues. Accordingly, the Labelling Programme was launched with the provision of voluntary compliance in the beginning. Now that there has been a period of transition, from June 2009 Labels in respect of air conditioners, refrigerators, tube lights and distribution transformers has been made mandatory. One of the important approaches which were considered included quantitative evaluation of savings estimates under different Programmes. This alone can facilitate understanding the impact of various Programmes and Schemes that are put in place. It is estimated that the savings on account of the Labelling Programme in respect of the items covered would be of the order of 1,500 MW during 2009-10.

  • The Energy Conservation Building Code (ECBC) was launched by the Ministry of Power in May, 2007 for five climatic zones. The Building components which have been included cover walls, roofs, windows, indoor and outdoor lighting, heating, ventilation, air conditioning, solar water heating, pumping, power factor and transformers. It is estimated that when this Code is made mandatory there would be a saving of the order of 1.7 billion units of electricity per year. Existing buildings are also getting covered. In the last two years, since the Scheme was launched, its implementation has, no doubt, been slow. Since the targeted saving for the Eleventh Plan is of the order of 500 MW, it is necessary that this is subjected to more systematic and meticulous implementation.

  • Certification of Energy Managers and Energy Auditors, on the basis of assessment of their knowledge on the subject, has been the right initiative. The fact that a large number of them have not been deployed by the industry obviously cannot be the basis for making various Schemes mandatory right from the beginning. As mentioned, the industry is passing through the period of learning curve, gratifyingly the Schemes are getting accepted across the industry and there would be opportunities for Energy Managers and Energy Auditors when the market and industry embrace these Schemes as also when the period of voluntary compliance gets over and the phase of mandatory implementation begins. It was clarified that the refrigerators had been taken up on the Labelling Scheme in late 2006 and the outcome is that during 2008-09 75% of refrigerators sold were Star rated. In case of air conditioners, which had been taken up in the second phase, during 2008-09 50% of air conditioners sold were Star rated. We must recognize that public sensor is a much stronger penalty and that such sensors mean a lot particularly to the listed public companies.

  • Appellate Tribunal for Energy Conservation is provided in the Law. The matter was discussed in 2006 and it was felt that multiplicity of institutions, particularly at appellate level, could be avoided. Keeping this in view, as a matter of fact, the Appellate Tribunal for Electricity was also entrusted with the responsibility for oil and natural gas. This Tribunal will also take care of energy conservation. It also needs to be clarified that the need for mandatory compliance arises only now. Any dispute at appellate level would be expected only in the future. In any case, at the Regulatory level we do have the Bureau of Energy Efficiency as well as the Regulatory Commissions.

  • The Law provides for notification of Designated Consumers. The general approach has been that instead of trying to cover all sections of consumers and all industries, it would be more effective to focus on select groups which constitute larger proportion of energy consumption. The approach patterned on the principle of A-B-C- control has a potential to deliver maximum results in an optimal manner with least possible resources. This is why among the industry groups the highly energy intensive industries have already been notified as designated consumers and they will be required to have Energy Managers on their rolls as also Energy Audits. Based on experience, more and more groups could be brought under the coverage.

  • State Designated Agency (SDA) has, no doubt, been an area of concern. Except for a few, in most cases, they are inadequate in terms of organizational infrastructure. It is true that existing Departments like Renewable Energy Groups have been also asked to take care of energy conservation. They are rendering necessary support and putting in their efforts. But this is totally insufficient. At the State level if this issue has to be addressed appropriately the Governments may have to revisit their existing approach to the organizational framework for this important subject.

The Bureau of Energy Efficiency, a few years back, had been advised that it should attempt to quantify the savings effected on various energy efficiency measures that are put in place from time to time. It was clarified by the Director General of Bureau of Energy Efficiency that during the year 2008-09, based on a study done by National Productivity Council, the savings achieved were of the order of 1,200 MW. Indeed, considerable progress has been made in respect of implementation of the Energy Conservation Act. A lot more is required to be done. Energy Efficiency Programmes require large scale participation of all concerned. There is a scope to further intensify the efforts on national awareness campaign. The extent of penetration on the basis of Seminars, Conferences and Advertisements, has been not more than 40 to 50%. Central Governments, State Governments and manufacturers have all to mobilize their efforts and resources in an integrated manner, so that the message and rationale of energy conservation reaches, in an effective manner, all the concerned stakeholders. The approach of voluntary followed by mandatory compliance on various Schemes is the right approach. During the mandatory phase, however, the enforcement has to be effective and, for this, the appropriate institutional mechanism will have to be put in place well in time.