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Green Business Ideas : India should promote NSM & NMSH to make NMEEE a success

03 Mar

The Prime Minister of India had launched The National Action Plan on Climate Change (NAPCC) on 30th June 2008.It outlines a national strategy that aims to enable the country adapt to climate change and enhances the ecological sustainability of India‘s development path. It stresses that maintaining a high growth rate is essential for increasing living standards of the majority of people of India and reducing their vulnerability of the impacts of climate change.

Eight National Action Plan were mooted -representing multipronged, long term and integrated strategies for achieving key goals in the context of climate change. The National Missions are to be institutionalized by the respective Ministries  and will be organized through inter-sectoral groups. The first 3 are already operational.

The National Missions are -

National Solar Mission,
National Mission on Enhanced Energy Efficiency, (1)
National Mission on Sustainable Habitat,
National Water Mission,

National Mission for Sustaining the Himalayan Eco-system,
National Mission for a Green India,
National Mission for Sustainable Agriculture and
National Mission on Strategic Knowledge for Climate Change.

In this article we shall talk about the second action plan – National Mission on Enhanced Energy Efficiency (2)(NMEEE). And how we could look at it from a completely different perspective. However, let us first understand this beautiful instrument created to combat Climate change and offer economic opportunities.

The Eleventh Plan Outlay for Energy Conservation & NMEEE schemes was Rs 8.6 billion to promote energy conservation measures in the country. The Union Cabinet had approved the implementation plan of the National Mission for Enhanced Energy Efficiency (NMEEE) with a budgetary support of Rs.23.54 billion required for implementation of the Mission with effect from 2010-11. It also approved the creation of two new posts of Deputy Director General (Joint Secretary level) in the Bureau of Energy Efficiency. The NMEEE initiatives will avoid capacity addition of about 19,598 MW. It would result in fuel savings of around 23 million tonnes of oil equivalent (MTOE) and reduction in Green House Gasses (GHG) emissions of 98.55 million tonnes. The National Mission seeks to create and sustain markets for energy efficiency in the entire country which will benefit the country and the consumers. If one reads the detailed paper on NMEEE, it focus is more on Demand Side Management ( DSM ) of 9 Energy Intensive Industries Identified to be known as Designated Consumers (DCs) – Power (Thermal) 104.1 MTOE ; Integrated Steel 28.0 MTOE; Cement 11.87 MTOE;  Fertilizer 7.86 MTOE; Textile 1.62 MTOE; Aluminum 7.73 MTOE; Paper 2.09 MTOE; Chlor-­Alkali 1.06 MTOE; which totals to  164.15 MTOE (Million Ton of Oil Equivalent ) in energy. The implementation plan of NMEEE seeks to upscale the efforts to create the market for energy efficiency, and is estimated  about Rs 7,500 billion.

NMEEE can be divided into   PAT; MTEE; EEFP & FEED .(3)

a) A market based mechanism to enhance cost effectiveness of improvements in energy efficiency in energy-intensive large industries. The trading of energy saving certificates would facilitate this process { Perform Achieve and Trade        ( PAT) }.

b) Accelerating the shift to energy efficient appliances in designated sectors through innovative measures to make the products more affordable. {Market Transformation for Energy Efficiency (MTEE) }.

c) Creation of mechanisms that would help finance demand side management programs in all sectors by capturing future energy savings. {Energy Efficiency Financing Platform (EEFP)}.

d) Developing fiscal instruments to promote energy efficiency namely Framework for Energy Efficient Economic Development (FEEED)

The overall idea of NMEEE is to achieve the following -

• Protecting the poor and vulnerable sections of society through an inclusive and sustainable development strategy sensitive to climate change.
• Achieving national growth objectives through a qualitative change in direction that enhances ecological sustainability, leading to further reduction in emissions of GHGs.
• Devising efficient and cost-effective strategies for end-use demand-side measures.
• Deploying appropriate technologies for both adaptation to and mitigation of the adverse effects of emissions of GHGs extensively as well as at an accelerated pace.
• Engineering new and innovative forms of market, regulatory, and voluntary mechanisms to promote sustainable development.

While all these are superlative and having met the core team of NMEEE at Chennai, during one of the stake-holders meet and  have immense respect for there depth of knowledge and dedication; let us look at what are the issues small consultation companies or independent Energy Auditors are facing to implement NMEEE and what can be done to popularize it.

The mainframe of NMEEE is PAT, which is focused at  Specific Energy Conservation (SEC), and this is complex to map;  because the energy usage pattern varies widely in industries of a particular sector due to various diversities like -Scale of Production (Installed Capacities); Use of Raw Material; Process Technology; Vintage of Technology; O & M Practices; Type of Product Output etc. While this is a great idea and business potential, barring the very large industries which find it feasible to adopt the PAT mechanism, the Small & Medium Scale industry of the same sector are not yet showing much enthusiasm. Primarily because even with the MTEE & EEFP, industry can not overnight stop production and upgrade technology.  So while the potential energy saving in the industrial sector is 98 billion KWh with a business potential of Rs. 2,400 billion; this target which we are thinking will be achieved by 2014 is a little difficult  to meet, more so in the current economic situation.

Further, Energy Audits of commercial and industrial facilities require a large amount of time to gather data and process them to offer the solution required.  All types of utility bills needs to be collected, for a period between one to three years, for analysis of pattern of use in different seasons, and  then certain benchmark need to be found. The performance of the any facility depends on various factors such as changes in weather, occupancy  or production levels and  this needs to be compared with design intent and similar type of facility which is used for comparison, to identify any error which is then used as clues for further analysis. Major energy loads are identified and analyzed and sometime spot data logging or sub-metering is required for specific energy loads or equipment to gather more data. For more advanced analysis, computer simulation analysis of the building and load patterns may be involved.

Trained and experienced engineers are required for much of this analysis, which further increases cost. Small consultancy companies  and independent energy auditors therefore find the going tough to convince industry owners to do an energy audit and more so where some of  the medium scale industry owner seeks a performance guarantee on the solutions which the consultants can provide, even before an audit is commenced.

Therefore to continue the course that has been set under NMEEE, the smaller independent auditing agency one must  look at the lowest hanging fruit that is Buildings & Lighting. One must focus at Lighting – 70 billion KWh translating to Rs. 400 billion (source- BEE); Buildings – 3.52 billion KWh ( source ADB )  which  Rs. 120 billion in business opportunities. Now if we add to it the administrative blocks of the 9 core DC identified, the business opportunity expands and Roof-top or captive solar and Green Building norms can get inducted. Because here is something which perhaps the policy makers have not looked into, that is, every industry big or small have an administrative block, which  falls under the Building sector. Although  this finds a mention in NMEEE but is not a core focus area yet. And all large facilities have lighting which independently mapped is a large segment.

It would make a great Green Business Idea should the authorities make mandatory 10% reduction in energy across all sectors and not limit the first 10% to come from the SEC in the large DC’s but be mapped from their building and lighting.  Especially Baseline energy consumption and emissions from commercial buildings, data centers. In fact Primary stakeholders for energy efficiency are  Commercial and residential buildings, which also form a part of large DC’s. For example if we take any of the “Navratna” ( nine gems ) industry, say Iron & Steel Plant, it has administrative blocks within the boundary walls of the plant, along-with  a whole residential township set up for its employees whose power consumption only in lighting and buildings could rival that of any Tier -II & III cities. In fact they are mini cities themselves. It would give impetus to two other missions under the NAPCC, namely the National Solar Mission and National Mission on Sustainable Habitat.

If the core idea of the National Mission is to bring in Enhanced Energy Efficiency, it must allow and support the Green Building criteria sooner than later and let it get the advantages of  EEFP & FEED enshrined in the NMEEE.

Courtesy: All images displayed are from the internet. Thanks to all who have created them

 

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