Energy Efficiency : Key For Sustainable Development

Relevance: mains: G.S paper III: Infrastructure: Energy.

The growing population, enormous increase in energy intensive economic activities are reasons for massive demand for energy in India.

• As the conventional source of energy are reducing and the renewable sources are under developing phase, improving energy efficiency at all levels of the energy spectrum is the cost-effective and quick solution to address this problems.
• Also, increased energy efficiency can be helpful in overcoming some of the concerns regarding the limitations imposed on sustainable development by environmental emissions.
• The government, through Nationally Determined Contributions has aimed to reduce emission intensity of GDP to 33-35 per cent below what is was in 2005 by 2030.
• However, to achieve this target, there is a need for a concerted move to ensure increased energy efficiency especially in these 3 sectors:
• A. Industrial sector
• B. Real estate
• C. Consumer appliance
• Industrial Sector:
• With an aim of energy efficiency improvement, Bureau of Energy Efficiency (BEE) is implementing Perform, Achieve and Trade (PAT) scheme under the National Mission for Enhancement Energy Efficiency (MNEEE).

About PAT:

• It is a regulatory instrument to reduce specific energy consumption in energy intensive industries, with an associated market based mechanism to enhance the cost effectiveness through certification of excess energy saving which can be traded.
• PAT cycle-I covered total 6 sectors including Aluminium, Cement, Chlor-Alkali, Fertilizer, Iron & Steel, Paper & Pulp, Thermal Power Plant, Textile, which were mandated to reduce their specific energy consumption (SEC) i.e., energy used per unit of production.
• The implementation of PAT in designated industries has led to energy saving of 8.67 MTOE in year 2015, which is about 1.25 per cent of total primary energy supply to the country in the “first cycle”. This energy saving also translates into mitigating about 31 million tonne of CO2 emission.
• The “second cycle” of PAT was notified in March, 2016 covering 11 sectors which include eight existing sectors and three new sectors, viz. Railways, Refineries and DISCOMs.
• Since PAT scheme is currently based on a rolling cycle i.e. inclusion of new sectors/designated consumers every year, the “third cycle” of PAT was notified in March 2017.
• Targets for the “fourth cycle” of PAT have been notified in March 2018 under which two new sectors i.e. Petrochemical and Commercial Buildings (Hotels) have been added.
• At present total 956 designated consumers belonging to 13 energy intensive sectors are under PAT cycles-II, III, IV and V undergoing implementation of energy efficiency projects to achieve the assigned targets. B. Real Estate Sector:
• The Bureau of Energy Efficiency (BEE) envisages a phased approach for developing an energy conservation code for the residential sector.

The real estate sector:  consumes over 30 percent of the total electricity consumption in India annually and is second only to the industrial sector as the largest emitter of greenhouse gases; of which around 75 per cent is used in residential spaces.

• The building envelope thus will impact both the thermal comfort as well as electricity used for space conditioning.
• In this context, BEE has two programs (1) Eco Samhita. Energy Conservation Building Code for Residential Buildings, and (2) Labelling for Energy Efficient Homes.

1. Eco Samhita (Energy Conservation Building Code for Residential Buildings):

• The Eco-Niwas Samhita (Part 1 : Building Envelope) aims to set minimum building envelope performance standards to limit heat gains (for cooling dominated climates) and to limit heat loss (for heating dominated climate) as well as for ensuring adequate natural ventilation and daylighting. The code is applicable to all residential use building projects built on plot area > 500 m2 .
• It was aimed to significantly curtail the anticipated energy demand for comfort cooling in times to come.
• This critical investment in envelope construction and design made today will reap the benefits of reduced GHG emissions for the entire lifetime of the buildings.

2. Labelling Programme for Energy Efficient Homes:

• The objective of proposed labeling programme is mentioned below: o To provide consumers the information for EE Homes
• Energy sustainability for India
• To achieve Indian NDC targets
• Market transformation for Energy Efficiency in housing sector
• The estimated energy saving potential through proposed labeling program is around 388 BU by the year 2030.
• The programme also brings up various ancillary benefits:
• It will stimulate the larger energy-efficient materials and technologies market.
• The housing value chain would encourage an additional set of professionals to expedite the complete process of residential label granting. This way, the labeling regime shall also be a stimulant for the Indian job market.
• It will also motivate material manufactures to invest in energy-efficient material manufacturing in India.
• Labelling mechanism shall cause a reduction in energy bills.
• It helps the nation in working towards the fulfilment of Global Sustainable Developing Goals 7 of the United Nations: Affordable and Clean Energy
• Consumer Appliances:

• Bureau of Energy Efficiency (BEE) has been promoting energy conservation through optimum temperature settings for Air Conditioners.
• According to the study of BEE, one degree increase in the AC temperature setting results in saving of 6 per cent of electricity consumed.
• 24-26 degree Celsius default setting has been recommended by BEE for energy savings and also to reduce greenhouse gas emissions.

Savings of over 3.0 Billion units of electricity are estimated at consumer-end through adoption of Star Rated Microwave Ovens and Washing Machines by 2030.

• This would be equivalent to Green House Gases (GHG) reduction of 2.4 Million-ton of CO2 by the year 2030 through these recent initiatives. Tapping Sustainable Energy Alternatives
• Sustainable development is “development that meets the needs of the present without compromising the ability of future generations”. Impact of Climate Change:
• According to World Health Organisation, climate change affects the social and environmental determinants of health-clean air, safe drinking water, food security and shelter.
• Between 2030 and 2050, climate change is expected to cause approximately 2,50,000 additional deaths every year from malnutrition, diseases like malaria, diarrhoea and heat stress.
• Its cost to health is estimated to be between 2-4 billion US dollars a year by 2030. Need to tap sustainable energy source:
• Emissions in India were estimated to have grown by 6.3 per cent in 2018, pushed by strong annual economic growth of around 8 per cent, according to recent projections by the Global Carbon Project.
• India was among the four major emitters in 2017 (7 per cent) along with China (27 per cent), the US (15 per cent) and the European Union (10 per cent). The rest of the world contributed 41 per cent.
• Nearly 65 percent of India’s electricity is generated from thermal power, for which the feedstock is invariably coal mined in India.
• Power generation through the Boiler-Turbine route results in atmosphere pollution due to the release of particulate matter, carbon dioxide, sulphur and nitrous oxides.
• The other major energy source is oil. Oil pollution is an inescapable fact of life.
• The process of extraction of oil transportation and storage of oil cause enormous loss to the natural and human environment.
• Road transport sector accounts for 6.7 per cent of India’s Gross Domestic Product (GDP).
• Currently, diesel alone meets an estimated 72 per cent of transportation fuel demand followed by petrol at 23 per cent and balance by other fuels such as CNG, LPG etc. for which the demand has been steadily rising.
• Another major source of environment pollution is nuclear power generation. Nuclear plants create 50 per cent more thermal pollution than fossil fuel plants.

Steps Taken:

• India is a signatory to the landmark Pairs Agreement on Climate Change, which has brought all nations to a common cause to undertake efforts to combat climate change through Nationally Determined Contributions (NDCs).
• India being the founding nation of International Solar Alliance, has the leverage to switch over to cleaner energies and clean-up its smog-choked cities.
• The National Solar Mission promotes ecologically sustainable growth, while addressing the country’s energy security challenge and contribute to global effort to meet climate change.

India has set an ambitious renewable capacity expansion programme, with a projected growth of achieving 40 per cent of its total power generation from non-fossil fuel sources by 2030, to meet NDC target.

• Another technology that has been unveiled by Indian scientists is for conversion of sewage into biofuels. A sewage treatment plant (STP) launched in Delhi would convert 10 lakh litres of sewage into three tones of biofuel per day.
• Beside biofuels, India has the potential to generate green energy from Solar, Wind, Geothermal, Ocean Thermal Energy, which are all-non-carbon options and can help reduce carbon imports by demand substitution.
• India has set a target to phase out petrol and diesel driven vehicle by 2030.
• Indian automotive sector is among the fastest growing industries in the world.
• As per International Energy Agency (IEA) estimates, globally transportation sector accounts for 30 per cent of worldwide energy consumption and is the second largest source of carbon dioxide emission contributing to 20 per cent of greenhouse gas.
• India’s National Mission for Electric Mobility seeks to mitigate the adverse impact of economic development, by completely switching over to electric vehicles by 2030. Conclusion: The challenge India faces now is to improve energy access to modern energy at affordable price in sustainable manner without sacrificing economic growth and social development. Financing Renewables in India
• For India, the success of the renewable energy sector will be crucial to meet its Nationally Determined Contribution (NDC) under the Paris Agreement and its transition towards a sustainable future.

Targets set by India:

• India has set an ambitious domestic target of 175 GW of renewable energy by 2022. This includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro power.
• The National Electricity plan 2018 reaffirms further expansion to 275 GW 2027. Achievement:
• As part of national efforts, India has embarked on an intensive renewable energy programme with 77GW renewable energy capacity on ground and 54 GW at different stages of fruition, India is well on the way to realize the ambitious target of 175 GW by 2022.
• By the year 2022, the renewable power share in the overall electric installed capacity is expected to reach 37per cent. If large hydro is included, the share of non-fossil fuel electric installed capacity in the electricity mix would be around 48 per cent.

The steps taken by the government to support the renewable energy sector:

• Fiscal and promotional incentives, such as capital subsidy, guidelines for transparent competitive bidding process, waiver of Inter State Transmission System (ISTS) charges and losses, viability gap funding (VGF), standards for deployment of renewable systems and devices and devices and permitting foreign direct Investment up to 100 per cent under the automatic route. Source of Finance: India renewable energy sector received approximately US 3.2 billion in the form of foreign Direct Investment (FDI) in recent years.
• There exist other provisions such as priority sector lending status for loans up to a limit of Rs 150 million to borrowers for solar, biomass, wind and micro-hydel power generation and also form renewable energy based public utilities like street lighting systems and remote village electrification.
• Generally, grants and concessional finance both play a role in stimulating renewable energy investment, although their share is miniscule in total finance space in India.
• At present, concessional finance is manly for strengthening transmission and distribution networks and solar roof top sectors.
• KfW, Germany’s concessional line of credit for Green Energy Corridor Project; World Bank, Asian Development Bank and New Development Bank for the solar roof top projects; and European Investment Bank (EIB) for financing renewable are non-going examples. Challenges in Finance landscape:
• The finance landscape for the energy sector is undergoing significant changes. With renewable, in many situations out competing other energy technologies, the financial markets have started repositioning themselves for a fundamental shift towards renewable energy finance.
• Financial assistance in the form of low-interest rate, long-term loans and loan guarantees are globally accepted means to address the high up-front capital costs of renewable.
• In this context, arranging institutional finance for increased renewable deployment would require concerted efforts.
• Gearing up the banking sector, exploring international funding, and developing a suitable mechanism for risk mitigation or sharing by addressing both technical and financial bottlenecks in a challenge. Way forward:
• Pension or sovereign funds are potent sources for patient capital for renewables. Top 400 Global funds manage assets of around US $ 75 trillion. Green bond issuance has surpassed US $ 120 billion.
• In 2014, the Securities and Exchange Board of India (SEBI) introduced Infrastructure Investments Trusts (InvITs). Due to the current limitation of 49 per cent cap on leverage, InvITs are unable to offer adequate returns in comparison to alternative investment avenues with similar assets.
• Reducing cost of the foreign debt by reducing the currency hedging cost has potential to mobilize foreign capital and spur investment by reducing the cost of the capital. This would reduce the delivered cost of renewables and make them more competitive.
• The timelines and reliability of payments for power purchase by state distribution companies remains a persistent risk for investments. Robust Payment Security Mechanism (PSM) will contribute to derisking the investment.
• Need for a dedicated ecosystem that looks at the financing needs of the renewable in most of the bilateral and multilateral financing institutions.
• Conclusion:
• India has rightly been-exploring a combination of short and long-term policy solutions.
• New ways of financing renewable, including through credit and risk guarantees, innovative currency hedging facilities, government bonds etc. would help in attracting additional capital, lowering the cost of debt, and also ensuring that India achieves its renewable energy targets.

E-waste Management

• Electronic waste (e-waste) comprises waste electronics/electrical goods that are not fit for their originally intended use or have reached their end of life.
• These gadgets and equipment contain hazardous constituents, although e-waste itself is not harmful.
• E-waste contains valuable materials such as copper, silver, gold and platinum which could be processed for their recovery when such wastes are dismantled and processed, since it is only at this stage that they pose hazards to health and environment.
• India is among the world’s largest consumers of mobile phones. With more than 1.5 million tonnes of e-waste generated annually, most consumers are still unaware of how to dispose of their ewaste.
• Recycling of e-waste was almost entirely left to the informal sector, which does not have adequate means to handle either the increasing quantities or certain processes, leading to intolerable risk for human health and the environment.

Legislative framework:

• The law on e-waste management was first passed in 2011. It was based on Extended Producer Responsibility (EPR), which put the onus on the producer for the management of the final stages of the life of its product in an eco-friendly way, by creating certain norms in tandem with State Pollution Control Boards.
• It has been made mandatory for leading multinational companies to set up electronics manufacturing facilities and R & D centres for hardware and software.
• The present rule has strengthened the EPR, which is the global best practice to ensure the takeback of the end-of-life products.
• A new arrangement entitled, ‘Producer Responsibility Organisation’ (PRO) has been introduced to strengthen EPR further.
• PRO, a professional organisation, would be authorised or financed collectively or individually by producers, to share the responsibility for collection and channelization of e-waste.
• Further, Central Pollution Control Board (CPCB) shall conduct random sampling of electrical and electronic equipment placed on the market to monitor and verify the compliance of law on Restriction of Hazardous Substances (RoHS) and the cost for sample and testing shall be borne by the producer.
• If the product does not comply with RoHS provisions, the producers shall take corrective measures to bring the product into compliance, and withdraw or recall the product from the market, within a reasonable period as per the guidelines of CPCB.

Steps To Achieve India’s Solar Potential

• Country’s per capita consumption of electricity stands at a meager 1,100 kWh/year which is much lower compared to other large economies like the US and China. Demand for power is set to rise further with increasing rates of urbanization and industrial growth.
• Unfortunately, our traditional sources of energy generation are already nearing their saturation levels.

Clearly, we need to look at alternate solution so we can address our energy security in a sustainable fashion, with a progressive reduction in carbon level.

Steps Taken:

• The Indian Government has set the renewable capacity target at 175 GW, to be achieved by the year 2022, with the highest percentage, 100 GW, to be contributed by solar power.
• In the past years, we have already added 28 GW solar capacity while the compound annual growth rate has reached as high as 55 percent.
• Launch of the International Solar Alliance, was also a significant step.
• By setting up solar parks, providing viability gap funding support and introducing schemes like KUSUM (aiming to harness solar power for agriculture) and SRISTI (catalyzing adoption of rooftop solar solution), the Government has shown its keenness to fast track growth of solar industry.
• However, there is room for more strategic interventions to fully realize India’s solar potential.

Five areas that need attention:

1. Technology: Newer advancements in the field like floating solar (solar panels mounted on structures that float on water bodies), and BIPV (wherein the conventional materials used for facades and roofs of buildings are replaced by photovoltaics systems) can play a vital role in increasing capacity.
2. Policy Push: Considering that tariffs are now significantly lower than other sources of energy, we need to move towards healthier tariffs to help private players work with sustainable business models, and attract a higher capital inflow.

• Discom Health: These distribution companies form a crucial link in the cycle of energy generation and have an impact on the overall process. Hence, maintaining discounts in good shape forms an extremely important link on the road to 2022. The healthier the distribution companies, the more power they can purchase and supply.

1. Financial Reforms: As of now, sectoral categorisation of banks sees renewable as part of the power sector, due to which, for most banks, the loan limit is majorly consumed by thermal plants and only a small fraction of the fund remains available for the renewable sector. Considering the above, renewable should be categorized as a separate sector. The government can also consider according priority sector status to renewable, given its strategic importance.
2. Enabling Ease of Doing Business: The government’s pursuit of reforms has created a more conducive environment for investments in India, reflected in our steady rise in Ease of Doing Business rankings over the past couple of years.