A vision that both the Indian government and the industry share is to promote the use of LED bulbs. Success can be achieved by implementing the Shared Energy Savings and Guaranteed Energy Savings models designed by Energy Efficiency Service Ltd (EESL), a government-run energy services company (ESCO). Saurabh Kumar, managing director, EESL, shares his views about this model and the role of EESL in a conversation with Sudeshna Das, senior executive editor, Electronics Bazaar.
Q. How do you define ESCO model?
A. Let me start with the energy conservation legislation landscape. The first and only legislation was Energy Conservation Act, 2001, which was created by Bureau of Energy Efficiency (BEE). The legislation clearly said that energy conservation is essentially a market based phenomenon. If you save energy, you save cost and recover investments in greener technology within a certain period of time.
It is a commercially-viable process, but even for that, you need to create some regulatory framework and that is why regulations were framed. Therefore BEE has created different policies, introduced several labels and set standards.
It was presumed that, just as consumers purchase energy-efficient products like five-star-rated air-conditioners, and refrigerators, institutions too need complete energy-saving solutions.
For example, an office requires air-conditioning, fans and lighting, which together need an energy-saving solution. That is exactly what ESCO does. It conducts an energy audit of your facility, suggests adopting an energy-efficient solution, makes upfront investments for it and recovers the same over a period of time, by way of tremendous savings in the energy bill.
This has not been happening in the country and therefore the government decided to set up EESL, in order to establish ESCO model in India, show results and handhold the private sector through its adoption process.
The main objective was to establish a business model that can build confidence among all ecosystems including facility owners, financial institutions and suppliers of energy-efficient products or solutions.
Q. Why did EESL focus on LED?
A. First, it is the easiest solution to implement—if I give you an LED bulb, you can just go home, fit it and switch it on.
Second, it offers tangible results immediately, which is quite important for any business.
So, if streetlights are changed to LEDs, the quality of light gets enhanced and this is visible.
We also focus on this area with the objective of establishing it as a mainstream business, handholding those in the private sector and encouraging domestic manufacturing.
Q. How does EESL facilitate this?
A. We have two ongoing schemes in the lighting domain. These target household consumers through Domestic Efficient Lighting Programme (DELP) and address the need to make streetlights more energy-efficient by working with different municipal areas.
Essentially, if you look at the lighting market in the country, it is very price conscious. The number of CFL bulbs sold every year is about 400 million, 90 per cent of which go into the domestic sector. So, in total, we are talking about a consumer market segment of 300 million CFL lighting products. Also, even when consumers want to buy LED lights, they are not sure about the returns on investment.
We came out with DELP to aggregate volumes across the country. Under this programme, we distribute LED bulbs to consumers in a way that is affordable to them and they get attracted, too.
We also create awareness by launching campaigns on how this programme can help consumers in saving electricity.
Consumers can pick up LED bulbs from our distribution centres by paying just ` 10 and the balance amount for the bulb’s price is recovered over nine to ten instalments along with the electricity bill.