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Energy Efficiency &
Sustainable Development
Mallika Roy
mroy@devalt.org
E nergy
has played a crucial role in accelerating the development of a nation.
Increasing electricity generation has, however, been extremely capital
intensive and technologically difficult for the Third World countries.
Even in the case of India, while electrification has taken place on a
massive scale, growth in demand for energy has far outstripped the
growth in installed capacities. While one of the reasons for this has
been the population explosion, another is the enormous increase in
energy intensive economic activities. As the conventional sources of
energy are fast depleting and the renewable sources have not matured to
an economically viable level, several economic analyses have revealed
that improving energy efficiency at all levels of the energy system is
the most cost-effective and quick remedy to solve this problem as well
as limit the emissions of greenhouse gases. The growing concern about
global warming, resulting from emissions due to power generation, could
be effectively addressed by reducing the need for power by promoting
energy efficient technologies on a large scale.
Considering
the growing gap between the demand and supply for electric power,
improving energy efficiency on both the demand and supply sides could be
an effective strategy to meet the needs of the people. India has an
assessed potential of saving about 25,000 MW energy, which is sufficient
for bridging the demand and supply gap. As per the Strategy of Ministry
of Power, one of the instruments for achieving the target of making
power available to all by 2012 is the promotion of energy efficiency and
conservation. Energy conservation potential for the economy as a whole
is estimated to be about 23%. While on one hand, one unit of energy
saved avoids 2.5 to 3 times of fresh capacity addition, on the other
hand it is known to be extremely cost effective with a capital
investment of less than even Rs. 10 million per megawatt savings as
against that of Rs. 40-70 million for capacity addition.
The
barriers that are needed to be identified in this regard are as follows:
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In India, till now,
since the industries were not subjected to any competition from
global firms, increased energy costs could still be recovered from
the product price and hence the unwillingness to invest in energy
efficiency measures. |
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Many producers of
end-use equipment have little knowledge of ways to make their
products energy efficient and little or no access to the technology
for producing the improved products. End-use providers are not often
acquainted with energy-efficient technologies. |
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Financial institutions
have been hesitant to take risks in promoting any new technology.
The government itself, till very recently, was little involved in
providing the essential information necessary for consumers to make
intelligent choices in terms of energy efficient technologies. |
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In case of commercial
enterprises, many investors use instruments such as simple payback
period, rate of return, or net present value to evaluate energy
efficiency projects. When energy prices do not reflect the real
costs of energy, consumers under-invest in energy efficiency.
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In addition to the
problems identified above, other important barriers include: (1) the
"invisibility" of energy efficiency measures and the difficulty of
demonstrating and quantifying their impacts and (2) slow diffusion
of innovative technologies into markets. |
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The energy intensity of
India is almost four times higher than that of a country like Japan.
This means to produce one unit of GDP, Indian industry is consuming
four times more energy. There is significant wastage in the energy
consumption and therefore, it poses a challenging task and also
presents an opportunity to reduce the energy intensity through
energy efficient practices. |
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There is a need to develop
grassroots policies associated with grassroots financing for meeting
the needs of energy efficiency. Some of the possible solutions to
address the above problems/constraints/barriers could be: |
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evolving a good blend of
top down and bottoms up approach for developing EE policy framework; |
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carrying out a thorough
"need assessment" for estimating the market potential and then
matching the need assessment with the technology; |
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developing a suitable
capacity building mechanism for creating awareness; among the end
users about the use of EE; and |
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developing innovative
financing schemes (like co-operative bank for the rural enterprises)
for financing EE products/projects. |
Efficient
use of energy is also the cornerstone of a more sustainable energy
system. In order to retain carbon emissions to the current level till
2025 and then cut them substantially, the world will need to double the
current level of global energy productivity over the next four to five
decades. Rapidly advancing technologies in areas such as lighting,
glazing, refrigeration, electronic controls, and synthetic materials
will help speed the pace of efficiency improvements.
Table 1 :
Potential to reduce emissions from power sector by 2020,
by energy efficiency options relative to business-as-usual scenario
|
Energy Efficiency Practices |
Reduction in
2020 GHG Emissions
(% relative to BAU) |
| |
China |
India |
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End use
efficiency improvement |
43 |
45 |
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Efficiency improvement in power plant |
9 |
11 |
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Reduction
of losses during transmission and distribution |
7 |
6 |
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Source: "An Asian Dilemma" by J
Gupta et all. February 2001 |
Energy
efficiency can play a decisive role where supply and demand constraints
are integrated into a sustainable pattern. To promote sustainable
development, energy systems should be environmentally, economically and
socially sustainable. The indicators of sustainable energy practices
need to be identified in a more effective manner. Some of the crucial
indicators are application of the end-use energy efficiency practices in
the different economic sectors, income classes and regions and whether
Government emphasising more on R&D or commercialization subsidies to
promote efficient technologies. The major barriers those have been
identified, in this regard, are as follows:
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The major impediments
are basically the supply-driven approach to energy and a lack of an
integrated approach, in conjunction with all the other components of
sustainable development. |
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Subsidies to energy
production and consumption, especially to fossil fuels and nuclear
energy are a serious impediment to the sustainable energy path. |
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Sustainable energy
scenarios emphasise more on issues like the promotion of those
technologies that are already sufficiently developed to mitigate the
impact of fossil fuel combustion on the environment and promote the
renewable energy sources. The end-use efficiency improvement of
energy should be taken as a key-factor to achieve sustainable
economic growth in a more effective manner. |
The new
approach should be based more on improving the efficiency at the demand
side. Hence, it would lessen the economic and financial burden of
energy; reduce the dependency on imports; limit the geo-strategic
threats to peace; favour energy equity for women and the poor; promote
empowerment of citizens and communities; provide a healthier
environment; and hence, contribute towards the sustainable development
of the country.
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