Assessment

11 Such as: smart meters; energy use displays; home energy management systems; buildings energy management systems; metering, monitoring and management systems for industrial energy use; systems for automated demand response; consumer interfaces; and digital applications for energy efficient choices and behaviour.

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Science and Technology, MoEFCC and the BEE held in May 2019 to discuss R&D and innovation in cooling and refrigeration.

Co-ordination, institutional capacity and data

The ongoing process led by the BEE to develop a national energy efficiency strategy is an excellent opportunity to develop a clear vision, set short-, mediumand long-term targets, assign responsibilities, and identify actions and steps for achievement.

Governments play a crucial role in establishing conducive framework conditions for energy efficiency by co-ordinating policies across all sectors to address issues like data collection, pricing and market barriers. Co-ordination across ministries, agencies, electricity regulators and DISCOMs and sub-national governments is essential. The government should consider periodic evaluation of institutional capacity, policies, programmes and markets – including at the state level – to identify best practices and promote crosslearning. To capitalise on energy efficiency opportunities, further efforts should be made to integrate and prioritise energy efficiency in energy system planning and urban planning, as well as in missions, plans, strategies and initiatives such as Make in India, Smart Cities Mission, Atal Innovation Mission and Atal Mission for Rejuvenation and Urban Transformation.

As the nodal agency for energy efficiency, the BEE develops strategies, policies and programmes, collects and analyses data, administrates implementation and assesses results, implements a wide range of projects, actively co-ordinates ongoing initiatives, carries out capacity building at national and sub-national levels, provides training and accreditation and organises awareness-raising campaigns. Given the scope of activities already underway, the size of the country and the growing importance of energy efficiency, further resourcing of the BEE warrants attention.

Reliable and timely data on energy end uses, markets, technologies and efficiency opportunities in all sectors contribute to the development of effective energy efficiency strategies and policies.

In recent years there has been significant improvement in data compilation to support effective energy efficiency strategies and policies in India. Data gaps have been identified, co-ordination has been strengthened and plans made to develop an energy data management system and platform. However, data gaps still remain, notably data on the industrial sector (where more than 40% of energy use and more than 50% of electricity use is not specified), data on traditional biofuel use, data on energy demand in agriculture and activity data across all sectors. Further efforts are warranted to improve the availability of disaggregated data to enable data-driven policy making and monitoring of energy efficiency. It is essential to enhance co-ordination among organisations to maximise resources and data quality. As part of a strategy to adopt best practices in energy efficiency data collection and management, the government could consider piloting a voluntary submission of the IEA energy efficiency questionnaire and continuing to work with the IEA on energy efficiency indicators.

The GoI should increase efforts to monitor and evaluate, and periodically update, energy efficiency policies and measures across all sectors. The GoI could consider mandating evaluation of programme effectiveness during and after implementation, with the results as input to subsequent decision making and planning.

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Leveraging private-sector investments

The market potential for energy efficiency services in India is estimated to be between USD 10 billion and USD 35 billion per year. EESL, the GoI’s national energy service company created under the MoP, has achieved outstanding success in developing business models, achieving economies of scale, enabling energy efficiency and attracting investment. However, in respect of the rest of the market, opportunities remain largely untapped with current combined revenues of energy service companies only being USD 150 million (excluding EESL’s revenues) (AEEE, 2017). Meanwhile, the same market has exceeded USD 16 billion in China and USD 7.6 billion in the United States. As regards focus, almost all projects are in the industrial sector, with public-sector energy efficiency projects accounting for only 1%. Indian energy service projects deliver on average 20% energy savings (IEA, 2019e).

The central and state governments have the opportunity to accelerate energy efficiency implementation across all end uses by taking concerted action to remove barriers and help create market demand for energy services. This could include facilitating access to equity and venture capital, risk mitigation through, for example, guarantee schemes and by providing incentives both for energy service companies and customers.

Further efforts to improve the investment climate for energy efficiency projects are warranted. Avenues to explore include raising investor confidence in energy efficiency projects,12 public–private partnerships,13 public–private platforms to identify solutions,14 development of tools for financial institutions 15 and measures to help de-risk energy efficiency investments.16 The value of approaches such as energy efficiency insurance could also be explored.17

Industry

India has made impressive progress in the area of industrial energy efficiency with its innovative PAT scheme, which is expected to substantially curb industrial energy demand with increased stringency and roll-out to new sectors. International, national and subnational benchmarking and development of sectoral technology roadmaps could further stimulate energy efficiency.18

12E.g. US Investor Confidence Project http://www.eeperformance.org/; EU Investor Confidence Project http://europe.eeperformance.org/.

13E.g. European Energy Efficiency Fund https://www.eeef.eu/objective-of-the-fund.html.

14E.g. Energy Efficiency Financial Institutions Group http://www.eefig.com/.

15E.g. tools on underwriting http://www.eefig.com/.

16E.g. de-risking via data on projects http://www.eefig.com/index.php/deep.

17E.g. Green Finance for Latin America and the Caribbean Energy Savings Insurance programme https://www.greenfinancelac.org/our-initiatives/esi/.

18In 2012 the IEA developed a low-carbon technology roadmap for the Indian cement industry, which has proved to be a useful tool in charting the way towards the development and uptake of sustainable technologies and processes: IEA and WBCSD (2012), https://webstore.iea.org/technology-roadmap-low-carbon-technology-for-the-indian-cement-industry. Longterm targets allow for tracking progress – as done in 2018 by the Cement Sustainability Initiative in India, showing that the sector has achieved the 2020 performance objective for emissions intensity reduction three years ahead of schedule and outlining further steps needed to reach the 2050 objective; WBCSD (2018) https://docs.wbcsd.org/2018/11/WBCSD_CSI_India_Review.pdf. Further examples of roadmaps include for example the Netherlands’ chemical sector https://www.vnci.nl/Content/Files/file/Downloads/VNCI_Routekaart-2050.pdf, European steel sector https://www.estep.eu/assets/SRA-Update-2017Final.pdf.

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To further complement the PAT scheme and promote energy efficiency in companies not covered by the programme, the GoI should consider incentivising or mandating the uptake of energy management systems and provide the tools to facilitate implementation. International experience shows that energy management systems such as ISO 50001 can reduce company-level demand by 10-30% within the first years of adoption and continue to lead to successive energy savings. By the end of 2017 only 1 613 sites in India had ISO 50001 certification compared to more than 30 000 in Germany alone (ISO, 2018), where uptake has been promoted through tax incentives.

The GoI could also consider incentivising the use of energy management information systems, which are digital solutions that enable real-time monitoring and management of energy use. Implementation of such systems in industry show on average 10–20% reductions in energy use just from providing a better understanding of how energy is used on the site and from equipment and process optimisation. Real-time monitoring of energy savings could also be of benefit in terms of reporting, measurement and verification of savings within the PAT scheme and other programmes.

Designing national programmes that effectively reduce MSME energy demand is challenging, especially considering the scale of the sector in India, with more than 63.4 million MSMEs. The cluster-based approach used in India offers economies of scale in effort and technology replacement. The GoI could consider measures to incentivise other actors with better access to MSMEs, such as state and local governments and industry associations, to work with them on energy efficiency. A further option could be to leverage ongoing initiatives such as the ZED initiative and the Make in India initiative and ensure that energy efficiency is prioritised.

The GoI could also consider expanding the coverage of its mandatory minimum energy performance standards and labels to industrial equipment such as electric motors (currently they have been voluntary at the IE2 level since 2012). India could consider the benefits of leapfrogging to higher IE levels.19 Mandatory minimum energy performance requirements should be extended to other industrial equipment such as compressors, pumps, fans and boilers.

Buildings

About 75% of the buildings stock expected to be standing in India in 2030 has yet to be built. Significant opportunities therefore exist to reduce future escalations in energy demand by ensuring that new buildings are increasingly more efficient. A lack in adoption and enforcement of building energy codes could lock in inefficiency and unnecessary energy demand for the next 40-50 years (GBPN, 2019).

Improving the efficiency of the existing building stock and enforcement of compliance remains equally important. With its building energy codes, India has a solid regulatory framework, but implementation warrants further attention. By mid-2019, 12 states and 1 union territory had notified the GoI of ECBC implementation for commercial buildings and only 9 states had covered significant ground to incorporate ECBC for commercial buildings in municipal by-laws (AEEE, 2018). A number of states have started working on the incorporation of ECBC for residential buildings.

19 Canada, Mexico, the United States, South Korea and the European Union already require IE3 in their minimum energy performance standard.

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20 The IEA is working with the Global Alliance for Buildings and Construction to develop a template based on international best practices and methodologies that can be used as a basis for developing country-, stateor city-level building energy roadmaps.

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