Policies, institutions, bureaucracy key to energy efficiency mission’

'Energy saved is energy gained' should be the mantra for India's evolving energy paradigm, said experts at the 'Mint Danfoss Transformation Agenda' on energy efficiency

'Energy saved is energy gained' should be the mantra for India's evolving energy paradigm, said experts at Mint Danfoss Transformation agenda on energy efficiency on 20 March. The panellists for the topic—How energy efficiency is becoming a focal point in India's policy making—Ajay Mathur, director general, The Energy and Research Institute (Teri); Radhika Khosla, fellow, Centre for Policy Research; Reji Kumar Pillai, chairman, Global Smart Grid Federation and Gurdeep Singh, chairman and managing director, NTPC Ltd spoke about demand aggregation, intelligent appliances and coordinated decision making. The discussion moderated by Mint's infrastructure editor Utpal Bhaskar also touched upon efficient power generation and grid interactive smart buildings. Edited excerpts:

Is energy efficiency becoming a focal point in India's policymaking?

Ajay Mathur: I think a change has happened and the change has been that we have started realizing that there are real benefits. The fact is that whether you are a company or a home or office, I think energy efficiency makes great sense. In Hindi there is a word—kifaayat, that is what energy efficiency is all about. It's not about switching off the light for an hour in a year and feeling good about it. It's about ensuring that you get what you need but also being careful in how the input energy is being provided. If this makes so much sense, the question is why doesn't more of this happen? At the end of the day, energy efficiency is about aligning the interests and incentives to these kind of personal behavioural and social aspects that we have about us. I think the tipping point has been reached.

Radhika Khosla: The question to follow up from what Dr. Mathur said is, do all of our efforts add up? And do they add up to a point where we do say that we have achieved enough from our different energy efficiency goals? The beauty of this topic is what it allows you to do is get the service that you want whether that is in refrigeration, in mobility, in cooling, in heating but with much less input energy. So, given that this is technically a great idea, politically it sounds very attractive; what do we have to learn from the last 20 years or so and what can we do to really scale this further, particularly if we are at this tipping point.

So I am going to put three things out there—one, thinking about energy efficiency is inextricably linked to actually how we use our appliances. So an extreme question, is it better to have an inefficient air conditioner that is not used at all or for an hour in a year or an efficient air conditioner that is used all the time? How do we use our appliances or products and how do we use our products whether they are efficient or not is a really important part of this larger debate.

Second, so, energy efficiency is often thought as a technology fix. But really, the policies and the institutions and the energy bureaucracy through which these policies filter is very important for its success. So we just have the example of building sector. At least one of the problems with the building sector is that it has to be implemented at national level, state level and municipality and given the number of people involved, the lack of capacity; the coordination required to do this is actually very difficult. But, if you take another sector such as appliances or say air-conditioners, you can have few manufacturers who can make this happen. So, really identifying who are the actors and how do we get buy-in from them is important if we are asking this question.

The third thing is that at a point given on many a transformations, energy efficiency is one part of larger stories about energy demand and that is really about how energy efficiency can really compliment the larger questions of how our cities are going to be built, how two-thirds of our buildings are going to be constructed and where does this fit in to those larger questions and structural changes that we are all going to be part of.

This at a time, when we also want to improve our per capita electricity consumption. Your views Mr. Singh.

Gurdeep Singh: It's a very important subject... Till now, I think we have been discussing all about energy efficiency from the demand side. I think the first leg starts with how efficiently we can generate, so that we can be totally emission-free. I think it will make immense sense economically. And if it is making economic sense, then politically it is really the right thing to be done.

We had started with something about three years back or so about the rationalisation of coal, which is reducing the transportation of coal and bringing in efficiency. We are also trying to utilize coal efficiently so that we can generate at the minimum cost, which is passed to the consumers. But at the same time, we have to ensure that what we are generating not only at a per unit cost but on the emission side also, which is directly related with the efficiency.

Then also transmit it efficiently. So our (power) grid is now becoming almost 400KV and as most of you will be knowing, as the voltage goes up, the efficiency of the transmission also goes up. As we increase our capacity, we are going to the super critical units, which are relatively much more efficient. Earlier, it used to be at around 34-35% efficiency at starting, today we are generating at around 42%. I am very happy to share with you that there is another move which is going on at present for advanced ultra-supercritical, which will be around 46%. So, this is the kind of bulk that is being taken care of us as a company. So, as the per capita consumption will go on increasing, I think incremental generation will be at much more efficiency coupled with renewables and others so that it is becoming much more efficient and environment friendly.

So, how efficient and effective is our grid today?

Reji Kumar Pillai: At the distribution level, that is 33KV and below about 24% losses. These AT&C (aggregate technical and commercial) losses that we call, most of it, my guess is, are technical losses only as our 11KV lines run 100km, which ideally should be 5km. The distribution companies say that most of it is theft, because it is very easy and you can't quantify it today in the measurement system. Today's technology some of them which we had 10 years ago, we perhaps would not have extended the grid to 100s and 1000s of villages. Today, it goes to around 597,000 villages and that is why 11KV lines are running into 50km and 100km. Had affordable micro grids, solar panels and batteries which are available at today's prices been available then, we would have never taken the grid to those villages.

The commercial buildings in India consume about 200 units per square metre per year...So according to BEE (Bureau of Energy Efficiency) standards, one star starts at 160 and five star is 90 units per square metre per year. In the US, it is typically 400 for existing buildings. But today's technology can bring it down to something like 55 to 60. We are not enforcing it and it is much easy. Radhika talked about so many actors involves, so it is difficult. Every state today has RERA (Real Estate Regulatory Authority) and if we implement through RERA, this is a very low hanging fruit. We should not allow any building without a minimum two or three star. This will come down to 100 or 120 (units per square metre per year), even if we start there.

Another very big area, which is not enforced is the agricultural pumps. We have more than 2 crore irrigation pump sets, which consume a fair share of electricity, which also goes for free. And two-thirds of those pumps are manufactured in those units which don't conform to any standards. We should stop manufacturing of such pumps. On the appliances front, five star, three star, two star appliances are there for past several years. Now, why do we need no star or one star appliances? We should move up the scale and stop those units. That is what the policy should now address.

What about the grid?

Reji Kumar Pillai: We have a very efficient transmission grid, particularly the western and the southern grid. The transmission level losses are less than 3%. Nationally, may be about 5%. But for the distribution grid, 33KV and below, we talk about 24% losses on the national level, which is very high. We can bring it down.

How are we poised to manage India's growing energy demand?

Radhika Khosla: That question is open. I think the jury is out on that question. To break it down further, we actually don't know what our demand will be. A lot of our different modelling studies, strategic plans, even the Electric Power Survey gives us very different numbers in its subsequent rounds about what the future demand will be. And the reason for that is that we are undergoing so much transformation whether it is in the built environment, whether its in the demographic changes, whether it is in the rates of urbanization; it's actually hard to estimate actually what that will be? I think what we can say is that if we do things correctly in the first time when we are building out and homes and commercial spaces are purchasing appliances for the first time, then not only we will be able to meet that demand, the demand will be much lower than it could potentially be.

We are now talking about a National Strategic Plan for energy efficiency. What does it entail?

Ajay Mathur: At the heart of it, on the one hand as we develop, incomes increase and the only paradigm that we know for development is to use more energy. But what is also happening is if you see that those countries which developed early, used something like 10,000 units per person per year. But those which developed later and you look at the Spains, the Japans, the South Koreas are at about 4,000. But where are we? At a generation level, we are at 1,200 units per person and at consumption level, we are about 8,00 units per person. So no matter what, there is a long way to go. But the reason why this decline is happening is because as infrastructure was built up, it was more efficient than the last country.

As we move ahead, what is the challenge on energy efficiency? I think the Prime Minister encapsulated it extremely well when he was inaugurating the LED Ujala programme and he said that if you want to set up a power station, then one person needs to take up a decision to set up a 1,000MW power station. But he said, if you want to do 1,000MW of energy savings, and I will use the words he used, he said then a crore of decision makers have to make a decision. What that tells you is that you need to coordinate the decisions of a lot of people. The success of the LED programme is that it has created a business model in which millions of people have been able to coordinate their decisions in terms of what they will do—buy an LED bulb and at the same time, the challenge, therefore is, how do we create business models for the SMEs (small and medium enterprises)? I would say even for buildings.

At the heart of it, the national view would have to be, how do we create the business models that brings together the millions of people who need to make a decision together?

What is this Strategic Plan all about?

Ajay Mathur: At the moment, it's a name. But what it tries to do is that in the decision making which is made, whenever investments are made, whether it's a power station or a building, whether it is you and I that strategically we plan at the level of macroeconomic signals that these decisions we all make are pushed towards energy efficiency.

hat is happening behind the meter?

Reji Kumar Pillai: In 2016, the government's tariff policy said that all electricity consumers with more than 200 units monthly consumption will be brought under smart metering program by end of December 2019.

It should have started with the first step of bringing all of them under smart metering by 2017 December for those who were 500 units and above. Nothing much has been done yet because a lot of teething troubles and finally now the start metering programme has started taking off in big numbers...EESL (Energy Efficiency Services Ltd) is again helping a couple of states aggregating the demand and buying and distributing to them.

So, expect 100-200 million smart meters to be installed in the next five to ten years time. That is going to be a big change which will enable people to view their energy consumption in real time. The main thing is people don't know how much they are consuming, until they get the bill.

So, there are means to know that. Remotely you can switch off the smart appliances. The next generation of appliances are going to be much more intelligent.

The future that we talk about in the smart grid arena is intelligent building which are grid interactive and intelligent appliances which will contract their own power through block chains, smart contracts and buy from the cheapest resource available.

It is going to happen in next five to seven years. In India it may happen at some places where the market will permit that. Imagine a grid interactive building with solar panels at the top and electric vehicle (EV) charging facility, with the electricity stored in the EV batteries, participating in the real time markets. When the price is high, the building or a campus becoming a micro grid.

So it will buy electricity at a cheaper rate, store it in the batteries and sell it back to the grid, when the price is high. Already proven technologies are there. It is not a technological challenge but the market mechanism and an implementation challenges which are there.