Building Energy Efficiency in IndiaAn Overview

BEE

Energy Conservation Act, 2001

Reduction of energy consumption using efficiency and conservation measures.Reduce the need to create new capacity thereby saving resources and green house gas emissions.Secure environmentally benign and sustainable growthStimulate market transformation in favour of energy efficient products and appliances.Created Bureau of Energy Efficiency (BEE) as the nodal agency at the center and State Designated Agencies (SDAs) at the state level to implement the Act.

Sectorial Energy Consumption

Chart1

23.4

6.6

36.5

30.7

2.8

Agriculture30.7%

Transportation2.8%

Residential23.4%

Commercial6.6%

Industrial36.5%

Sheet1

Residential23.4

Commercial6.6

Industrial36.5

Agariculture30.7

Transportation2.8

Lighting28

A/C7

Fans34

EV Cooler4

Refrigeration13

TV4

Others10

Lighting60

HVAC32

Others8

Sheet2

Sheet3

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Energy Consumption in the Commercial and Residential Buildings

Commercial buildings 33 billion unitsResidential buildings116 billion units

Chart1

23.4

6.6

36.5

30.7

2.8

Industrial36.5%

Commercial6.6%

Residential23.4%

Transportation2.8%

Agariculture30.7%

Chart2

28

7

34

4

13

4

10

Chart3

60

32

8

HVAC32%

Others8%

Lighting60%

Sheet1

Residential23.4

Commercial6.6

Industrial36.5

Agariculture30.7

Transportation2.8

Lighting28

A/C7

Fans34

EV Cooler4

Refrigeration13

TV4

Others10

Lighting60

HVAC32

Others8

Sheet2

Sheet3

Chart1

23.4

6.6

36.5

30.7

2.8

Industrial36.5%

Commercial6.6%

Residential23.4%

Transportation2.8%

Agariculture30.7%

Chart2

28

7

34

4

13

4

10

TV4%

Refrigeration13%

EV Cooler4%

Fans34%

A/C7%

Lighting28%

Others10%

Sheet1

Residential23.4

Commercial6.6

Industrial36.5

Agariculture30.7

Transportation2.8

Lighting28

A/C7

Fans34

EV Cooler4

Refrigeration13

TV4

Others10

Lighting60

HVAC32

Others8

Sheet2

Sheet3

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Electricity Use in the Commercial Sector is increasing !

ENERGY CONSERVATION BUILDING CODE [ECBC]- New Commercial Buildings

Bureau of Energy EfficiencyGovernment of India

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Addressing Climate Zones VariationsFive climate zonesComposite (Delhi)Hot Dry (Ahmadabad)Hot Humid (Kolkata), Moderate (Bangalore)Cold (Shillong)

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Existing Buildings- Road MapESCO promotion- branding and rating of ESCOsCreating a pool of trained manpower- certification programme for energy auditorsPartial Risk Guarantee fund being createdInnovative financial instruments being evolvedStandardised performance contract documents releasedSecuritisation of performance contractsStrong focus on Government buildings- almost 500 large buildings being targeted

Implementation StrategyPartnership with PTCScope: Flexible, overarching framework with collaborative activities and partnerships in the field of Demand Side Management (DSM)Areas of Cooperation:energy efficiency improvements in existing government buildings,financing as well as implementing other DSM initiatives in lighting, pumping and industrial sectorsenergy efficiency measures in PSSs, industrial complexes, SEBs/ Utilities, power plants, etc.

Market of EE in Buildings

SNMarket TypeInvestment Potential, bn RsEnergy Savings (KWh)Energy Savings (MW)Pay Back Period* (Years)1Industrial Generic Energy Efficiency Process Energy Efficiency121.0042.0079.0049.00 billion23.70 billion25.30 billion 7000340036000.52Commercial Government Owned Offices Hospitals Private Owned Hotels5.703.400.851.441.71 billion0.76 billion0.87 billion0.18 billion553360140530.71.00.23Municipal13.003.70 billion16880.94Totals140.0054.40 billion9240 0.6

Financing Barriers for ESCOs The number of ESCOs is limited. Absence of strong balance sheet to secure funding.-Non-recourse finance is also not easily available given a high risk perception associated with this activity. Most banks require collateral of at least 100% of the loan value, which in light of the above, is difficult for ESCOs to provide.Lack of capacity of Indian banks to consider energy efficiency projects. Commitment Risk as a result of information asymmetry between the ESCOs and banks.Little or no experience in lending to ESCOs and thus are not familiar with the energy performance contracting model.Some banks are interested in the performance contracting model offered by ESCOs, but in most cases ESCOs do not sufficient assets to provide comfort to the bank.Focus on a minimum first cost and hence only rudimentary levels of energy efficiency are currently considered by building owners.

Partial Risk Guarantee FundAct as a first loss, subordinated recovery guarantee and will be placed in a guarantee reserve account and will be paid out to participating banks in the event of a loss or default. Amount paid out will be equal to the amount of outstanding principal times the guarantee percentage, and will not cover accrued interest or other fees owed to the bank The lending banks will also pursue recovery procedures in the event of default, and will pay to PGFE any monies recovered after first satisfying its own receivables PRGF will act as guarantor and will enter into agreements with commercial banks who will originate transactions Guarantee percentage: Upto 50% of principal Maximum guarantee term: 5 years;Maximum single transaction guarantee limit: To be decided by the PGFE Committee Guarantee fee pricing: one-time up-front fees based on guarantee liability range of 0.5% to 1.0%Recovery: PGFE subordinate to lending bank;

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8 Government buildings (including President House, PMO, Shram Shakti Bhawan) have been audited. Implementation of energy conservation measures in 4 buildings completed and remaining are on their way.

Energy Efficiency Programme in Buildings Impressive Energy savings achieved in Rashtrapati Bhawan

17 additional Central Government buildings undertaken for second phase through ESCO mode.

Energy Audit study in 15 Government buildings completed

MonthEstimated savings, kWhAcutal Savings achieved, kWhAugust, 200693080124466September,200697549142597October, 200697549169179November, 2006105642222567

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Agriculture

30.7%

Transportation

2.8%

Residential

23.4%

Commercial

6.6%

Industrial

36.5%

HVAC

32%

Others

8%

Lighting

60%

TV

4%

Refrigeration

13%

EV Cooler

4%

Fans

34%

A/C

7%

Lighting

28%

Others

10%