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• GS 1 || Geography || Indian Economic Geography || Energy Resources

Why in the news?

Rajgir and Bodh Gaya are set to become the country’s first fully green energy efficient towns, as Bihar vies with Delhi, Goa and Odisha to supply 24×7 clean power round the year through the first of its kind renewable energy hybrid model

Understanding energy efficiency:

What is energy efficiency?

• Energy efficiency now has an important place in the public policy agenda of most developed countries.
• The importance of energy efficiency as a policy objective is linked to commercial, industrial competitiveness and energy security benefits, as well as increasingly to environmental benefits such as reducing CO² emissions

Why is Energy Efficiency Important?

• Because of the importance of the energy – and subsequently of energy efficiency in terms of energy savings – for the activities of our own society and for our personal life, the book in the third chapter also deals with these connections between industrial efficiencies and the economy or the human well-being.
• The energy efficiency issue has gained renewed importance with the recent rise of hydrocarbon prices

India and Energy Efficiency:

• Over the last decade, India’s energy intensity (an indicator of an economy’s energy inefficiency) has decreased. China has approximately 1.5 times the energy intensity of India.
• Because of denser consumer bases and more compact plant sizes for local energy producers, cities and metropolitan environments have improved energy production and lowered the cost of electricity consumption per output level.
• However, in order to stay competitive, major industrial companies in India are moving away from cities and establishing plants in rural areas. According to a study of manufacturing enterprises in India, average electricity usage in rural areas is much higher than in urban areas.
• Small and medium-sized businesses face the greatest challenges because their small plant sizes do not warrant major investments in self-provisioning power generation capability, and their higher levels of activity make them more vulnerable to risk than larger businesses.
• India’s developed states have increased their energy production. However, lagging states’ electricity consumption per unit of production is twice that of leading states.
• Whether India’s systemic (construction, infrastructure creation, etc.) and spatial (population growth, growing size of urban agglomerations, etc.) transformations would intensify or mitigate energy efficiency is critical for issues ranging from power outages to rising pollution levels.
• The way developed countries handle industrialization, urbanization, and infrastructure investments would have a significant impact on the climate.

Need for energy efficiency in India

• Rising demand: India’s residential electricity consumption is expected to at least double by 2030.
• Discoms stress: Indian discoms are struggling to manage their finances.
• This is partly linked to drop in payment rates, as consumers are struggling to pay their bills amid rising consumption and tight finances.
• The Indian government has sanctioned liquidity relief to help discoms tide over this crisis, but these are just short-term fixes.
• Embracing energy efficiency can be a win-win solution as this can bring down household energy bills and reduce discoms’ financial stress.

Adoption of energy-efficient appliances in India:

• In recent years, India has seen significant adoption of energy-efficient appliances, especially those covered under the mandatory labelling programme, according to the India Residential Energy Survey conducted by the Council on Energy, Environment and Water and the Initiative for Sustainable Energy Policy.
• More than 75% of air-conditioners and 60% of refrigerators used in Indian homes were star-labelled.
• Nearly 90% of Indian homes used LED lamps or tubes.
• There has been limited uptake of energy-efficient ceiling fans and televisions.
• While approx. 90% of homes use fans, only 3% have efficient fans.
• Similarly, 60% of our television stock comprises the big old energy-guzzling CRT (cathode ray tube) models.
• Desert coolers, used by 15% homes, are not even covered under the labelling programme.
• Significant efficiency gains are also possible for other appliances like water pumps and induction cook stoves.

Concerns:

• Growing energy needs: As households buy more electric appliances to satisfy their domestic needs, concerns about the ability of discoms to provide reliable supply at affordable rates will also rise.
• Lack of awareness: Only a fourth of Indian households are currently aware of BEE’s star labels.
  • While awareness levels are high among residents of metros and tier-1 cities, the majority in small towns and rural areas remain unaware.
  • Despite a voluntary labelling scheme since 2009, less than 5% of ceiling fans produced in India are star-rated.
• Costly fans: While the Bureau of Energy Efficiency (BEE) plans to bring ceiling fans under mandatory labelling from 2022, the high upfront cost will be another barrier.
  • At present, the most efficient fans cost more than double the price of conventional models.

Government scheme:

• National Mission for Enhanced Energy Efficiency – to promote the market for energy efficiency introduction of electric vehicles, smart meters
• Performance, Achieve and Trade Scheme – to incentivise industries on energy efficiency
• UJALA LED bulbs
• Street Light National Programme – replace street lights with LED lights
• National Building Code 2016 – includes energy efficient options for heating and cooling Eg: geo-thermal heating and cooling

The way forward:

• First, we need to improve the availability and affordability of energy-efficient appliances. For instance, despite a voluntary labelling scheme since 2009, less than 5% of ceiling fans produced in India are star-rated.
  • While the Bureau of Energy Efficiency (BEE) plans to bring ceiling fans under mandatory labelling from 2022, the high upfront cost will be another barrier. We need innovative business models that can attract manufacturers to produce efficient technology at scale and bring it within purchasing capacity.
• Second, India needs a nationwide consumer awareness campaign on energy efficiency. Only a fourth of Indian households are currently aware of BEE’s star labels.
  • While awareness levels are high among residents of metros and tier-1 cities, the majority in small towns and rural areas remain unaware.
  • To bridge this divide, we need a decentralised and consumer-centric engagement strategy. State governments, discoms and retailers need to be at the forefront of our renewed efforts to create mass awareness about energy efficiency.
• Finally, we need to monitor supply quality and changing consumption pattern on a real-time basis. As discoms in India deploy smart meters, these must be used to measure actual savings and demonstrate the benefits of energy-efficient devices to build consumer confidence. The smart metering network would also be crucial for enforcing consumer rights rules.

Additional info:

• Bureau of Energy Efficiency (BEE):
  • The BEE is a statutory body established through Energy Conservation Act, 2001 under the Ministry of Power, Government of India.
  • It assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.
  • BEE coordinates with designated consumers, designated agencies, and other organizations to identify and utilize the existing resources and infrastructure, in performing its functions.

Mains oriented question:

A solid, self-sufficient, and sustainable economy is built on energy efficiency. Comment. (250 words)