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A decade has passed since the Energy Conservation Act was enacted in 2001. Most provisions of the law are yet to be implemented properly. Ajay Mathur, director of the Board of Energy Efficiency, shares his views with Ruhi Kandhari and Umashankar
What is the mandate of the Bureau of Energy Efficiency (bee) set up under the Energy Conservation Act?
The law provides three regulatory functions. One is standards and labelling of electrical equipment, second is energy conservation code for buildings, and the third is energy conservation norms for industry. These are the three regulatory functions of the government, with bee providing recommendations to the government.
How much of this mandate has it carried out?
As far as standards in appliances are concerned, we have a programme in place. We bring new appliances for standards and labelling on a voluntary basis and advertise about the labels. If the consumer finds them useful, meaning, if the consumer starts buying those products, we make the programme mandatory. The first such label was introduced on a voluntary basis in December 2006. Now, we have four appliances with mandatory labelling and eight with voluntary.
We prepared the energy conservation building code in 2007. Since then there have been several outreach programmes related to training architects and architecture schools, and supporting companies and government organisations to design and make code-compliant buildings. Today, some 500-600 energy-efficient buildings are at various stages of construction.
In the case of industry, we notified energy-consumption norms in 2007. Now we are in the process of introducing Perform, Achieve and Trade (pat) scheme. The scheme looks at the energy consumption of major energy-intensive sectors and gives them target to reduce energy consumption by 2014-15.
The achievement is not impressive. What was the priority and urgency when the law was passed?
The vision of the people, who framed the law, has been captured in the introduction of the Act. I quote: “Establish a bureau, which would recommend to the Central government norms for processes for energy consumption, recommend to the government who can be a designated consumer, recommend to the government the particulars required to be displayed on label on equipment or on appliances and manner of their display, take suitable steps to prescribe guidelines for energy conservation building codes, take all measures necessary to create awareness and disseminate information for efficient use of energy and its conservation, develop testing and certification procedure and promote testing facilities for certification and testing for energy consumption of equipment and appliances, promote innovative financing of energy efficiency projects, specify qualifications for the accredited energy auditors, specify certification procedures for energy managers to be designated or appointed by designated consumers, prepare educational curriculum on efficient use of energy and its conservation for educational institutions, boards, universities or autonomous bodies and coordinate with them for inclusion of such curriculum in their syllabus.”
The bureau recommends and the Central government actually does it.
Have you achieved the vision given that a decade has passed?
It is a moving target. The point is that we have made a start. Energy conservation is an area where by the time we achieve a target, the technology has moved forward, so the frontier has shifted. We have to ensure that the train keeps moving.
Union minister of power Sushilkumar Shinde recently said the government is likely to achieve the 10,000 MW energy savings target for the 11th Five year Plan. This is mostly due to bee’s energy efficiency programmes, which as of December 2010 helped avoid generation of 7,415.98 MW. Can energy savings be verified? (see ‘Energy fixing’, June 1-15, 2011)
If you notice, the largest amount of savings come from the standards and labelling programme. When we started, the base for standards and labelling was fairly low. We take entry to star one as the base. We issue labels, because we are paid fees, and keep track of how many 1 star, 2 star, 3 star, 4 star and 5 star of each equipment have been sold.
To figure out the wattage saved by a star-rated appliance, you compute the difference between its current energy consumption and what it was at the base. For energy savings, you have to make a huge assumption of hours of usage. There are many studies to figure out how many hours an appliance is used for. So we multiply those (wattage saved x hours an appliance is used for x number of equipment sold) and get the energy saved.
As far as avoided (energy generation) capacity is concerned, we take into consideration the percentage of appliances that would have been used during the peak demand in ideal circumstances. This coincidence factor tells us what is the exact avoided generation capacity (wattage saved x hours an appliance is used for x number of equipment sold x coincidence factor). But that number is much more difficult to calculate.
The question you asked me was about verification. For this, one has to do a few huge assumptions on hours of usage and calculate the coincidence factor, which is based on surveys.
The energy saving report for 2009-10 says, of the 2,800 MW saved, 2,100 MW, or a significant component as you call it, was because of standards and labelling. Most savings were because of energy-efficient air conditioners. Still, its baseline has been at star zero since 2007. This may be inflating the energy savings. Please comment.
The issue is what the baseline is. This is a programme that started in this plan, the 11th Plan Period. When we started this programme, the average energy efficiency of ACs that we collected from the market was 2.2 eer. The data was not available then, people were not reporting on energy efficiency. What surveys reported was that eer was probably lower than that but because we did not know what it was, we assumed that it is at that point. It was below star 1 in 2006.
You mean bee compares latest energy efficient equipment sold in the market to the baseline set in 2007. The difference would obviously be a lot. Don’t you think the baseline should have been improved each year?
Absolutely! What base should have been is purely a matter of judgement. You have the data. If anyone wants to put the base at 2.5, it can be 2.5. If someone wants it at three, it can be three. And, the savings can be calculated. bee has done it on the basis of star zero or entry to star one in 2007. In January 2012, the star rating of the products will though become tighter. Then, what is now star one will disappear. Star two of today will become star one. But will we change the baseline? No. The baseline will only change with the end of the Plan Period in March 2012. Okay!
When we go into the next Plan Period, we may think of changing our baseline. So whether you change it on a yearly basis or a five yearly basis, as long as you have the data, you can change any baseline.
Labelling is just putting sticker on the equipment. The Act says the Centre may, in consultation with BEE, prohibit manufacture, sale, purchase or import of equipment or appliance that are not star-rated, unless they conform to energy consumption standards. This means BEE needs to mandate energy efficiency for all electrical appliances.
At least in the four appliances, for which labelling is mandatory, anything below one star can not be manufactured or sold in the market. That is where it is used.
Do you plan to increase the mandatory labelling to all appliances?
As I said, we will keep on mandating labelling in those appliances where we see the public values the labels. At this moment, what we have in hand is refrigerators, air conditioners, tube lights and distribution transformers for mandatory labelling.
Why are efficiency standards in India far lower than the global minimum energy performance standards?
How can you? Dekho! Aisa hai na! That is why we are racheting up. In the year 2012 is the first ratcheting and in 2014 the second. Then our standards will be as good as the best anywhere else at that time.
Your website says this should have happened a lot faster. Between 2008 and 2009, the minimum star label for an AC should have moved to 2.5 eer; between 2010 and 2012, it should have moved to 2.7 eer. But we are not anywhere near those efficiency levels.
Mandatory labelling for ACs started only on January 1, 2010. I could not have done a ratcheting in 2009, if the label was not even mandatory.
Have not we taken fairly long time since the Act was announced in 2001? What such slow implementation of Energy Conservation Act?
I don’t know what your expectations were. The Act was passed in 2001 and by 2011 everything should have happened! Remember that the first voluntary labelling started in December 2006, and we were able to do the first mandatory labelling by January 2010. So while each one of us wants that it should happen tomorrow, unfortunately the other doesn’t cooperate with us. The consumer does not pay more to buy an energy efficient device, the manufacturer needs more time to do things, and when you set up an enforcement procedure it takes longer, when you go to architects, they don’t understand even what an energy efficiency quotient is. Unfortunately, all those people are non-cooperative. No. I am joking. The issue is everybody needs time to understand, learn and change.
Now that we have reached the stage where fair amount of awareness has been created, can you ratchet up energy efficiencies of equipment with mandatory labelling and bring more under it?
Yeah. Obviously, those that are in voluntary phase will soon be converted into mandatory phase and we will bring new appliances under voluntary labelling. Those which have been in the mandatory phase, we will start ratcheting up their standards. All of this has to happen.
By when could we see all 12 appliances reaching mandatory labelling?
December 4, 2057! Nobody can guess. I mean at the end of the day this is about how people react. If people do not see value in a label, we will not make it mandatory.
You mean bee will have to wait for improvement in comfort level of consumers towards energy efficient products and the market to move to a new level of efficiency?
Dekho aisa hei! There is no need for a Bureau of Energy Efficiency or an Energy Conservation Act because energy conservation makes sense. It makes economic sense. I invest more so that my energy bill goes down; and we see that happening. Why is there most efficient cement plant or the most efficient fertiliser plant in India? It’s because of this reason.
However, there are places where the market fails. For example, consumers do not make choices based on energy efficiency; their decision is based on economic rationale, which is largely based on the initial cost. In case of buildings, we have the whole problem of split incentives (split incentive happens when those responsible for paying energy bills are different than those making capital investment. The most common form of split incentive is seen in leased buildings where tenants pay the energy bills, but owners pay for upgrades.) In industry, we have the whole issue of risk of new technology. Those are the market failures that the Energy Conservation Act seeks to address.
Industries consume the largest amount of energy and there are no energy efficiency norms for them as the Act says. What are the problems that bee faces in implementing energy efficiency norms for the industry?
Different energy-intensive industries have different characteristics, such as use of different raw materials, intermediate products and age of the plants. So collecting data and developing the methodology for efficiency norms by taking into account these differences has taken a considerable amount of time. Besides, the Act has been amended after the (2008) National Action Plan for climate change to form a market-based mechanism through pat scheme. These complexities have now been addressed. We recently finalised the efficiency norms and sent those to the Ministry of Law for notification under the Act.
Industries might look for gains both under the pat scheme and the carbon credit mechanism of the UN Framework Convention on Climate Change (unfccc). Will it lead to double counting of energy savings?
No. BEE is only concerned about the implementation of PAT scheme and the resulting energy savings for the country. The issue of carbon credits is for the UNFCCC to decide. BEE is targeting only the energy savings attribute.
Though there are over 3,000 large industries in the country, pat covers about 560-odd industries. Why so?
Yes. The designated consumers are about 560 now.
Why are you not able to make the energy efficient building code mandatory in all new buildings?
The building code is based on terms like building design. To make it mandatory, it has to be integrated into the state or municipal bylaws. But stakeholders like municipal agencies, town planners, architects and contractors are still not conscious of integrating the code into the building planning process. So for existing buildings, we are promoting the star-rating programme, which is based on energy conservation by a building. It offers incentive to upgrade one’s building to a more efficient one.
One of the flagship schemes of the government was introduction of efficient agricultural pump sets. It has been in pilot stage for over a decade. When will it be implemented?
See, there is one big hurdle in its implementation. If a farmer has to pay fixed tariff to the utility, why would he invest in energy efficient pumps? Complexities surrounding metering and monitoring are high. Even technology providers are not forthcoming. We have now planned six more pilot projects apart from the one implemented in Solapur, Mahrashtra, to analyse the issues. It takes a lot of time to prepare detailed projects reports before the actual implementation of the pilot projects.
The annual reports of bee are available only till 2007-08 on the website. As per the Act, these should be published every year. What is the status?
Is it? I’ll have to check and get back to you on that.
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