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Finding the Right Key to Energy Efficiency

By Gaurav Soni, BEE - CEA, Greetude Energy

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Gaurav Soni, BEE - CEA, Greetude Energy

With an expected market potential of over US$ 16 billion, Energy efficiency proves to be an attractive opportunity for the players in the energy efficiency program initiated by BEE. These programs and schemes are formulated to increase the industry, building and home energy efficiency to be implemented through various channels.

 However, over a period of time, it has been observed that the full potential of the Energy Conservation ACT 2001 has not been recognized due to the various reasons. These are the barriers which exist in the fundamental approach of stakeholders in every energy efficiency program. The underlying prime concern here is to motivate the facility owners to enhance their energy efficiency activities which include Technical inability of the maintenance staff, financial constraints or sheer ignorance of the top management in understanding the impact of Energy conservation on the bottom line of their business.

Thus, many programs have been initiated to educate and implement the EC Act by the government including PAT scheme, Standards & Labeling, DSM and BLY. Although, these programs are highly appreciated by the industry but the effective enforcement of these programs remains a question for the industry. The conventional approach of Energy Auditing has, however, proven to be unrewarding for many auditing organizations due to the unwilling nature of the prospective client’s towards energy efficiency. This further reduces the profit margins leading to constant degradation in the quality of work. It is one of the major concerns for many Energy auditing professionals as it provides no fiscal motivation to engage in auditing activities.

 

“Project monitoring and verification of energy savings can be realized with the use of proper M&V tool, guaranteeing the transfer of monetary savings to the project owner.”

 

According to our experience at grass root level for implementation of energy efficiency in MSME’s, awareness creation is of utmost importance. To maximize their profit margins, top management professionals should be educated on the impact of energy conservation. The mandatory energy audit requirements does force them to undergo the process, but the implementation of Energy conservation measures are yet left unaddressed on the grounds due to the unavailability of required capital. Therefore, raising capital for EE activity from Banks and other investors pose a major challenge. The Techno Economic viability of the project is established out of mandatory clause which renders unattractive for the investing agency.

Besides, the problems in identifying proper vendors and suppliers for the project equipment are the other bottlenecks. Due to guaranteed performance requirement of the project, not many suppliers are willing to take the risk, and if they do, it leads to higher cost which might render the overall project unviable. For solving this part of the puzzle, an effective Monitoring & Verification plan is required to realize and quantize the energy and consecutive monetary savings of the project owner.

The issues described in above lines are few of the major challenges which need to be addressed to ensure smoother execution of each Energy efficiency project. ESCO have been established to simplify the process of project execution. However, unless these ESCO have deep pockets and risk appetite, it becomes difficult to realize any profits from the projects.

There is, however, a solution to address these barriers and provide ease in doing business to all stakeholders (Facility owner, Energy auditing Agency, Product Supplier, Financer, M&V agency) which is through an integrated approach. This involves bringing all stakeholders onto a single platform to enable them to interact to solve common problems of any EE project. The platform will allow the energy auditing agency to conduct the Technical feasibility of Energy conservation measure without having to worry about the costs associated with the process. This in return will minimize the risk for the investors regarding the paybacks. Additionally, the platform will also ensure that right vendors are able to provide their entire product at the right prices to safeguard the commercial viability of the project.

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