ENERGY CONSERVATION -A KEY FACTOR FOR PRODUCTIVITY

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ENERGY CONSERVATION -A KEY FACTOR FOR
PRODUCTIVITY

• S. THANGARATHNAM
• MEMBER
• TAMIL NADU ELECTRICITY REGULATORY COMMISSION

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OUTLINE

• Energy Policy of India
• Energy Conservation Act 2001
• Energy Saving Potential in different sectors
• Energy Conservation (EC) limits A look at 2050
• Energy Conservation Case studies
• Demand Side Management
• Standards and Labelling
• Funding Agencies
• ESCOS
• Energy Conservation Tamil Nadu Scenario
• Energy Conservation and Productivity
• Energy Conservation A key factor for
  productivity
• Conclusion

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Energy Policy of India Short term

• Maximize returns from the existing assets
• Reduce losses in transportation and in end use
• Initiate action to reduce energy intensity of
  different consuming sectors and promote
  conservation through organizational and fiscal
  measures
• Initiate steps to meet the basic energy need of
  rural and urban households so as to reduce the
  existing inequities.
• Maximize satisfaction of demand for energy from
  indigenous resources

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Energy Policy of India Medium term

• Progressive steps to substitute petroleum
  products by coal, natural gas and electricity
• Action for accelerated development of all
  renewable energy resources especially hydro
  potential
• Promote programmes to achieve self-reliance in
  energy sector
• Create appropriate organizational changes in
  consistent with the over all energy strategy

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Energy Policy of India Long term

• Promote an energy supply system, largely based on
  renewable sources of energy
• Promote technologies of production,
  transportation and use of energy that are
  environmentally benign and cost effective

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Energy Conservation Act 2001

• EC Act 2001 empowers the union government and in
  some instances the state government to
• Notify energy-intensive industries,
  establishments and commercial buildings as
  designated consumers
• Prescribe energy consumption norms and standards
  for designated consumers
• Direct designate consumers to appoint certified
  energy managers for efficient use of energy
• State Government to amend the energy conservation
  building codes to suit regional and local
  climatic conditions

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Energy Conservation Act 2001-cont.

• Direct owners of commercial building to comply
  with the energy conservation building codes
• Direct mandatory display of labels on notified
  equipment and appliances
• Specify energy consumptions standards for
  notified equipment and appliances
• Prohibit manufacture, sale, purchase and import
  of notified equipment and appliances not
  confirming to standards

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Energy Conservation Act 2001-cont.

• Under the provision of this Act the Bureau of
  Energy Efficiency (BEE) was established with
  effect from 1-03-2002
• The mission of the BEE is to institutionalize
  energy efficiency services, promote energy
  efficiency delivery mechanisms, and provide
  leadership for improvement of energy efficiency
  in all sectors of the economy

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Potential for Energy Conservation

• Indias energy intensity per unit of GDP is
  higher compared to Japan, US and Asia by 3.7,
  1.55 and 1.47 times respectively. This indicates
  inefficient use of energy but also substantial
  scope for energy saving.
• One unit of energy saved at the consumer end
  avoids nearly 2.5 to 3 times of capacity
  augmentation due to PLF, auxiliary consumption
  and T D losses
• The conservative estimate of potential of energy
  saving in India is creating nearly 25,000 MW of
  new capacity

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Potential for Energy Conservation - Sector-wise
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Potential for Energy Conservation Industrial
Sector
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Potential for Energy Conservation Agricultural
Sector
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Potential for Energy Conservation Commercial
Sector
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Potential for Energy Conservation Residential
Sector
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EC limits A look at 2050 Projected consumption
of Household appliances (Units/Year)
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EC limits A look at 2050 Projected efficiency
of combustion technologies
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EC limits A look at 2050EC options in the next
50 years
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Energy Conservation Case Studies Century Rayon
(planning and implementation)

• This Birla Group Industries is one of the largest
  manufacturers and exporters of viscose filament
  yarn
• The senior management of the Co. makes annual
  energy conservation plan drawing inputs from MIS,
  auxiliary plants and Energy Conservation Cell
  (ECC). Once the plan is in place, the budget is
  approved, targets are finalized and accountably
  is fixed.
• ECC coordinates, implements and monitor the
  entire activity through daily, weekly and monthly
  production review meetings comparing the factors
  like energy produced and energy consumed in
  relation to production
• Energy audits by outside consultants is also done
  to identify potential areas for energy
  conservation

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Energy Conservation Case Studies Century Rayon
(Savings achieved)
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Energy Conservation Case Studies Heavy Water
Board (planning and implementation)

• Heavy Water Board is an independent unit under
  the Department of Atomic Energy. India is the
  second largest producer of heavy water. It is a
  highly energy intensive unit with 70 production
  cost. This high technology under went many
  challenges and setbacks. Having mastered the
  technology from seventies till nineties there was
  a paradigm shift in the focus from production
  at any cost to production with least cost.
  Tremendous efforts were taken and extensive
  energy audits were carried out in the plants to
  reduce wasteful energy and the plants were
  re-optimized to operate at highest possible
  efficiency.
• Extensive energy saving measures were carried out
  in waste heat recovery system, recycling of
  effluent water, re-optimizing of hydraulic loop
  by impeller trimming and by the use of variable
  speed drive, re-optimizing of cooling water and
  refrigeration system using innovative and
  integrated system designs.

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Energy Conservation Case Studies Heavy Water
Board (Savings achieved)
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Demand Side Management

• DSM means managing the demand for power among
  some or all its customers to meet current or
  future needs.
• Under this process the demand is shifted from
  peak to off peak hours there by reduce the need
  of buying expensive imported power during peak
  hours.
• DSM enables to better manage their load curve
  and enhance the profitability
• Potential energy saving through DSM is treated at
  par with new additions on the supply side in MWs
  and DSM can reduce the capital needs for power
  capacity expansion

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Demand Side Management Case study

• One of the first DSM programme was undertaken by
  the Ahmedabad Electricity Company (AEC) in 1994.
• Two ESCOS worked with AEC to implement efficient
  lighting and reactive power compensation by
  installing capacitors at its HT and LT services
• This has led to peak load saving of 10 percent.

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Standards and Labelling

• Energy efficiency standards basically involves a
  set of procedures and regulations that define the
  energy performance of manufactured products
  sometimes prohibiting the sale of products in
  which energy consumption is higher than the
  minimum standard
• Energy efficiency labels on the other hand,
  informative markers affixed to manufactured
  products that provide consumers with the details
  necessary for making informed purchases.

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Standards and Labelling Action Plan

• Under EC Act, 2001, BEE will formulate and
  implement S L programme
• BEE is to notify the equipment and appliances and
  set up institutional mechanism for administration
  of S L programme
• BEE conducts test and analyze the results to
  enable label setting and implementation
• These activities are slated for completion by
  October 2004

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Funding Agencies

• In recent years there has been growing urgency to
  implement energy conservation projects.
• Given this, financing of such projects acquires
  new significance.
• Financing backing for such projects has been
  coming from various agencies including
  multilateral and bilateral financiers, commercial
  banks and financial institutions.

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Funding Agencies- Contd.

• Internal Agencies
• Indian Renewable Energy Development Agency
  (IREDA) Offers loan up to 75 of equipment
  cost
• Petroleum Conservation Research Association-
  (PCRA) offers 50 subsidy on conducting audit
• ICICI Manages USAID funds. Lends 50 of
  project cost at 9 Interest rate
• IDBI Manages ADB fund under Energy Management
  Consultancy and Training (EMCAT) programme.
• Commercial banks Only SBI has committed EE
  programme. The other banks that have shown
  interests are Bank of Baroda, Canara Bank and
  Syndicate Bank

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Funding Agencies contd.

• External Agencies
• World Bank has played a key role in financing EE
  projects with its own funds and has participated
  with other international agencies.
• ADB is also playing a bigger role in promoting EE
  projects. It sanctioned 150 million loan under
  Industrial Energy Development Project in 1994
• Among the bilateral agencies , the role of USAID
  has been most significant. USAID provides Rs.
  1.08 billion to Ministry of power, ERCs and power
  utilities to develop appropriate market oriented
  policy environment

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Energy Services Companies (ESCOS)

• Energy services companies (ESCOs) are single
  point providers of energy solutions to the
  industry.
• ESCOs are to carry out energy audits, identify
  the feasible options for saving energy, arrange
  finance and implement energy efficiency projects.
  
• This would help understand energy needs of
  industrial clients and come up with solutions
  that can be implemented without the clients
  incurring production losses. Therefore ESCOs
  allow clients to minimize financial risks
  associated with energy efficiency projects.
• However, the growth of ESCOs has not taken off in
  India, primarily because industries are wary of
  fly-by-night operators who are only keen to
  maximize their profits without sufficient
  dedication to services they would provide.
• While for ESCOs problems of establishing
  baselines would make risks associated with energy
  efficiency projects high.

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Energy Conservation -Tamil Nadu Scenario

• TNERC issued the following directions in the
  recent tariff order related to Energy
  Conservation
• TNEB to conduct energy audits at the HT/LT level
  and its own generating stations
• TNEB shall complete 100 metering within three
  years
• TNEB shall assess the T D losses in each
  voltage level of the system and peg the losses at
  16.25 for the FY 04
• TNERC have set performance benchmarks in respect
  of PLF, Auxiliary consumption and heat rate for
  thermal stations
• TNEB shall obtain ISO certification for all its
  thermal stations within one year and initiate
  action to obtain the certification for its T D
  wings.

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Energy Conservation -Tamil Nadu Scenario Contd.

• TNEB shall adopt an integrated approach of cost
  per useful heat value (UHV) in the procurement,
  transport and usage of coal. TNEB shall explore
  the possibility of importing the coal and using
  of washed coal if technically and economically
  viable
• TNEB shall submit report on an action plan to
  create awareness on DSM measures among consumers
• TNEB shall submit a report on the feasibilities
  of enforcing the DSM measures to all HT Consumers
• TNEB shall propagate the use of EE devices such
  as CFL and capacitors
• TNERC has provided incentives in the tariff order
  for higher PF and Non-Peak hour usage of energy
  to enable the TNEB to manage the load curve
  better

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Energy Conservation -Tamil Nadu Scenario Contd.

• DSM is being implemented in Tamil Nadu by the
  following measures
• Grouping and staggering of agricultural feeder
• Imposing penalty for lower PF and Peak hour
  consumption
• TNEB has formed a separate cell for DSM which is
  analyzing the data to formulate DSM plans. They
  are also taking part in creating DSM /EC
  awareness among all group of consumers

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Energy Conservation and productivity

• In broad sense, energy conservation means more
  efficient use of energy without reducing
  production levels and without sacrificing product
  quality, safety or environmental standards.
• Productivity is defined as the output of any
  production process, per unit of input. To
  increase productivity means to produce more with
  less.
• Traditional energy managers considered EC
  opportunities as independent of other industrial
  productivity related opportunities
• Energy-only recommendations had little impact on
  the productivity of manufacturing plant

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Energy Conservation and productivity-Paradigm
shift in approach

• Global competition made productivity improvement
  including energy cost reduction an important
  benchmark for economic success
• Productivity and Energy conservation are not
  mutually exclusive objectives
• Our approach to energy policy issues has been
  shifted from supply-dominated to an integrated
  approach incorporating with a judicious mix of
  investing in new capacity, increasing operational
  efficiency of existing system, reducing losses
  and efficient end use of energy and renewable
  technologies.

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Energy Conservation A key factor to
productivity

• Indian energy intensive industries (cement, Iron
  steel, aluminum, textiles, paper,
  chlor-alkalis etc) consumes 65 of Industrial
  energy
• Energy cost accounts for
• 40 of Aluminum production cost
• 30 35 of Iron and Steel production cost
• 30 32 of Cement production cost
• 30 of Paper production cost
• 50 60 of Chlor-alkalis production cost
• 12 15 of Textiles production cost

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Energy Conservation A key factor to
productivity -Contd
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Energy Conservation A key factor to
productivity -Contd

• The potential for energy conservation is around
  25 in Indian Industries and 23 for whole
  Indian economy
• No other constituent of manufacturing can
  influence the productivity to this great extent
• No other constituent of manufacturing can have a
  great potential for improvement in productivity
• Energy is a manageable expenses and it can be
  easily controlled through dedicated efforts.
  Energy Conservation is the quickest, cheapest and
  most practicable method of increasing the
  productivity.
• Hence Energy Conservation will be one of the most
  important factor to increase the productivity in
  the future

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Conclusion

• The main reasons for higher specific energy
  consumption in Indian Industries are obsolete
  technology, lower capacity utilization and poor
  operating and maintenance practices.
• EC has received increased attention in India
  since the mid seventies but its impact is felt at
  a low face due to inhibiting attitudes,
  insufficient technical know-how, market
  distortions, high cost of efficient end use
  devices, capital shortage etc.
• There is a need to design interventions in terms
  of policies and institutions which addresses
  these issues and create incentives for energy
  conservation.
• Now that the EC Act, 2001 has given new impetus
  to the Energy Conservation issues and the ESCOs
  and the financial institutions are in place to
  implement the EC projects through performance
  guarantee contract mechanisms, energy
  conservation projects are bound to be successful
  in the future

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Thank You