Sustainable Growth through Energy Efficiency

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• Sustainable Growth through Energy Efficiency
• A presentation by
• Debashish Majumdar
• Chairman Managing Director,
• Indian Renewable Energy Development Agency
  Limited
• New Delhi, India
• REEEP Side Event, Bali, Indonesia
• December 08, 2007

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Presentation Structure

• Energy in India
• IREDA An Overview
• Energy Efficiency in India
• Energy Efficiency CDM
• Conclusion

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Energy in India
4
Per Capita Energy Consumption
(kgoe)
Low per capita energy consumption
5
Power Sector at a Glance
Total Installed Capacity 1,37,000 MW

• Thermal 88, 215
• Hydro 34, 390
• Renewable 10,900
• Nuclear 4, 120

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Indian Renewable Energy Scenario

• Sector Potential Achievement
• (As on 30.09.2007)
• Wind 45000 MW 7660 MW
• Small Hydro 15000 MW 2015 MW
• Biomass Power/ 16000 MW 560 MW
• Bagasse Cogeneration 3500 MW 692 MW
• Waste to Energy 2700 MW 55 MW
• Solar PV 20 MW/sq.km 3 MW

Renewables Total installed capacity 10,985 MW
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Energy Demand Projections
(in Mtoe)
Source Energy Policy Report, Planning
Commission, India
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Electricity Demand Projections
Source Energy Policy Report, Planning
Commission, India
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Energy Scenario in India

• Power Installed Capacity 1,37,000 MW
• Energy Generation (p.a.) 607.7 bn kWh
• Supply Demand Gap 12 Peak
• 8 Average
• Per Capita Power Consumption 606 kWh/Year
• Access to Electricity (Rural) 44 households

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IREDA An Overview

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The Beginning ...

• Incorporated on March 11, 1987 as a Public
  Limited Government Company.
• Mission
• Be a pioneering, participant friendly and
  competitive institution for financing and
  promoting self-sustaining investment in energy
  generation from renewable sources, energy
  efficiency and environment technologies for
  sustainable development.

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Sectors being financed

• Solar Energy
• Wind Energy
• Hydro Energy
• Biomass Cogeneration
• Biomass Power Generation
• Waste to Energy
• Energy Efficiency and Conservation
• Bio Fuels
• New Emerging Technologies

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IREDA Financing Norms

• Debt Instruments Project Financing Schemes
• Equipment Financing Schemes
• Manufacturing Loans
• Quantum of Assistance Upto 80 of Project Cost
• Upto 75 of Equipment Cost
• Rate of Interest 2.5 to 11.75
• Moratorium Upto 3 Years
• Repayment Period Upto 12 Years

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Highlights Of Cumulative Lending Operations
(As on 01. 12.2007

• Number of Projects Approved 1830
• IREDAs Loan Commitment 2082 Million US
• Loan Disbursements 1146 Million US
• Sanctioned Capacity 3083 MW
• Commissioned Capacity 1605 MW

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Impact of IREDA funded projects

• Created awareness in the country.
• Encouraged entry of private sector investments in
  RE sector.
• Catalyzed market development by showcasing
  success stories - encouraging other lenders to
  support the sector.
• Helped in creating manufacturing, design
  engineering, operation and maintenance
  capabilities.
• Encouraged several states to declare policies and
  incentives to encourage private investments in RE
  sector.
• Assisted in policy shift from technology
  demonstration to commercialization making RE
  development demand driven.
• Helped in creating direct and indirect
  employment generation, economic development and
  improving living conditions.

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International Assistance

• Government of Netherlands - 18 Million Dutch
  Guilders
• Asian Development Bank - 100 Million US
• The World Bank I LOC - 145 Million US
• DANIDA - 15 Million US
• KfW, Germany - 61.35 Million Euro
• World Bank IInd LOC - 135 Million US

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International Recognition

• Second Prize in Water Globe Award Category of the
  Energy Award 2002 presented at Linz, Austria.
• World Climate Technology Award for the year 1999
  by Climate Technology Initiative (CTI),
  Paris, France.

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Energy Efficiency in India
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Drivers
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Energy Efficiency in India - Context

• Energy essential for economic growth.
• Commensurate input of energy
• Energy security

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Energy Efficiency Spin Offs

• Energy efficiency/conservation measures can
  reduce peak and average demand.
• One unit saved avoids around 2.5 to 3 times of
  fresh capacity addition.
• Investment in energy efficiency/energy
  conservation is highly cost effective.
• Can be achieved less than US 0.25 million/MW
• Avoids investment in fuel, mining, transportation
  etc.

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Energy Efficiency - India Scenario

• Industry is the major energy consumer utilizing
  about 50 of the total commercial energy use in
  India
• The six key industries namely
  aluminium,cement,fertilizers, pulp paper,
  petrochemicals and steel - consume about 65 of
  the total energy use in India
• Annual Savings Potential of US 1.2 billion and
  an An Investment Potential of US 2.4 billion.
• In view of high energy intensity per unit of GDP
  of Indian economy there is a vast scope for
  energy saving potential
• Notification of designated consumers under the
  Energy Conservation Act has given an impetus for
  adoption of energy efficient technologies

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Energy Efficiency - India Scenario

• Savings Potential
• Supply side savings opportunity 25000 MW
• Demand side savings opportunity
• Agricultural sector 20
• Commercial sector 20-50
• Industrial sector 25
• Energy Conservation Act 2001 Comprehensive
  legislation laying roadmap for improvement in
  energy efficiency in the country.
• Mandatory energy audit for energy intensive
  industries
• Minimum energy performance standards for
  industries for equipment appliances
• Setting up of a Bureau of Energy Efficiency

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EE Institutional Building

• Bureau of Energy Efficiency (BEE) Established
  in 2002 to provide a policy framework and
  direction to national energy conservation
  activities, with following thrust areas
• Indian Industry Programme for Energy Conservation
  
• Demand Side Management
• Standards and Labeling Programme
• Energy Efficiency in Buildings and Establishments
  
• Energy Conservation Building Codes
• Professional Certification and Accreditation
• Manuals and Codes
• Energy Efficiency Policy Research Programme
• School Education
• Delivery Mechanisms for Energy Efficiency
  Services

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India IREDA Energy Efficiency Fund

• IREDA diversified into financing energy
  efficiency projects in 1999, including support
  from multilateral agencies
• Cost-effective technical solutions and
  sustainable investments models developed leading
  to a robust pipeline of EE projects

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IREDAs achievements in EE financing

• Number of Projects Approved 20 Projects
• Capacity Addition 119 MW
• IREDAs Loan Commitment 68 Million US
• Loan Disbursements 35 Million US
• Commissioned Capacity 43 MW

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IREDAs Experience in EE financing

• Energy (electrical) tariffs send imperfect price
  signals
• EE not a focus within industry with inadequate
  awareness of EE opportunities
• Limited R D for energy efficient technologies
• High prices of EE equipment
• Public procurement policies
• Capacity to appraise and finance EE projects
• Weak credit profiles of ESCOs
• Legal structures

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EE Financing - IREDAs Accomplishments

• Case Study Models developed for Public Buildings,
  Hospitals, and SME Clusters in Cement, Paper
  Pulp, Textiles and Hotels
• Standardised Energy Audit formats and EE loan
  Formats
• Developed Project monitoring and Verification
  Protocols
• Developed and Implemented Capacity Building
  Programs for Bankers
• Marketed EE Loan Schemes for Banks in SME
  Clusters
• Developed and Published an Investors Manual for
  EE Projects
• Disseminate Information through a Specialised
  Journal - BEE

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Policy Initiatives for Driving Efficiency

• Requirements to Establish Minimum Efficiency
• - Building Codes
• - Appliance Equipment Standards
• - Requirements for Utilities to Use Energy
  Efficiently
• Incentives to Transform Markets
• - Tax Incentives
• - Rebates, Loan Guarantees
• Public Education to Build Market Demand
• - Consumer Education and Awareness Campaigns
• - Labeling (Energy Star)
• - Utility DSM Programs
• Research and Development to Continue Advances
• - RDD Partnerships with Industry

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Energy Efficient Buildings

• The average energy use for typical commercial
  building is 200 kWh/sq. meter/year.
• Mandatory enforcement of ECBC can reduce the
  energy use by 30-40 to 120-160 kWh/sq.
  meter/year.
• Nationwide Mandatory enforcement of ECBC could
  yield significant savings

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Impact of Energy Codes

• Market Development for EE RE products
• Building Insulation
• Energy Efficient Windows (Glass and Frames)
• High-Efficiency HVAC Equipment
• Solar-Thermal Hot Water Systems
• Improved Design Practices
• Lighting and Daylighting
• Natural Ventilation/Free-Cooling Systems
• Improved Performance
• Improved Power Factor

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Energy Efficiency CDM
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CDM Project Portfolio in India
As on 04.12.2007

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EE Technologies Global Common

• Climate Change Energy Security- Main drivers
• Technology Development Cost Reduction is
  central to any effort
• Sharing of policy experience important
• Need to devise an effective mechanism for
  possible technology transfer under Climate Change
  and other Mechanisms

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EE Technologies A Prerequisite for Sustainable
Society

• Climate change has to be considered as an
  integral element of sustainable development
  agenda. However, there is no single economic
  technical solution to reduce GHG emissions from
  the energy sector.
• EE measures in the existing energy infrastructure
  would have to be taken up through policy
  initiatives. Long term national agenda would have
  to be dovetailed with energy security.
• India EE become more relevant in view of high
  imports and low affordability.
• Subsistence energy needs even for meeting MDGs
  would require EE measures in a big way

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Conclusions

• Energy is in short supply in India, and is
  expensive, especially for industry
• Energy-guzzling production procedures further
  push up costs
• With use of more energy efficient technologies,
  many businesses could cut their energy
  consumption by up to 20
• Adoption of energy efficient technology is
  picking up the pace, particularly in the energy
  intensive industry of India
• Energy Conservation Building Code (ECBC) is
  essential to ensure building energy efficiency

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Thank You !