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The 12th Chief Energy Ministerial - India UK Initiative to Promote Industrial Energy Efficiency

IBEF, Knowledge Centre

Jun 25, 2021 08:51

Introduction
The Clean Energy Ministerial (CEM) is an international framework that promotes clean energy initiatives and policies. It provides a forum for global economies to collaborate and demonstrate best practices to enhance supply, expand access to and accelerate adoption of clean energy worldwide. CEM has been conducting energy summits annually to meet these objectives and continued the tradition by organising the 12th Clean Energy Ministerial (CEM12) in 2021 that was hosted by Chile from May 31, 2021 to June 6, 2021.

Following this, world economies have been focusing on cost-effective energy efficient industrial solutions and implementing innovative technologies to ensure a sustainable approach for future developments that could boost economic activities and growth.

Energy Efficiency Market in India
As per Ministry of Power data, the energy demand in India is estimated to increase to 1,500 MTOE (million tonnes of oil equivalent) by 2030, from 770 MTOE in 2012, on the back of rising incomes and economy. As per a press release by Energy Efficiency Services Ltd. (EESL), in February 2021, the Indian energy efficiency market is estimated at Rs. 74,000 crore (US$ 10.15 billion); this is anticipated to cause energy savings of up to 20% of the current energy consumption by leveraging technology and innovative business models.

According to Indian Energy Exchange, a trading company, sustainable development of the industrial ecosystem depends on boosting efficiency of industries including agriculture, cement, iron and steel, leading to the overall development of economy. For example,

  • According to a report by NITI Aayog and Rocky Mountain Institute (RMI), India could potentially save fuel worth Rs. 3.11 trillion (US$ 42.65 billion) until 2050 by implementing a clean and cost-effective approach in transportation of goods.
  • Iron and steel sector is estimated to potentially save up to 45 MTOE by 2041.
  • The MSME sector is estimated to save up ~15 MTOE by 2041.
  • Between 2021 and 2041, a potential energy savings of ~5-12% is expected to reduce carbon emissions by 187 MT in 2021 and 1029 MT in 2041.

The 12th Clean Energy Ministerial (CEM) Summit
At the 12th Clean Energy Ministerial (CEM) summit, India, along with the UK, introduced a roadmap to promote deep decarbonisation and improve energy efficiency of industries under the CEM’s ‘IDDI (Industrial Deep Decarbonization Initiative)’, which is co-ordinated by UNIDO, United Nations Industrial Development Organisation. The IDDI aims to promote green technologies and accelerate demand for low-carbon industrial materials. It is currently backed by Canada and Germany, with more countries set to join the initiative.

At the summit, Secretary, the Ministry of Power, Mr. Alok Kumar emphasised that India aims to reduce its intensity of emissions by 33-35% per unit of the GDP by 2030. This depends on the effective deployment of low-carbon technologies in energy-intensive industries such as steel, cement and petrochemicals. He explained that government policies have resulted in substantial energy savings on the demand-side.

Collaboration between India and the UK
Over the years, India and the UK have built an enduring alliance in various areas including climate change. Following this, in May 2021, the two countries jointly launched a ‘Roadmap 2030’ to collaborate and combat climate change by 2030.

Mr. Alok Sharma, President of COP26 (Climate Change Conference of the Parties) UK, said, "Accelerating the transition to clean energy is vital. To achieve the target by 2030, global innovation alliances in the fields of energy, transportation and industry are crucial. I am excited that both India and UK have collaborated in this significant area."

Key highlights of the ‘Roadmap 2030’ are as follows:

  • Both countries emphasised on a fresh cooperation to aid transition to clean energy, protect forests and build infrastructure to boost energy efficiency, develop green energy and renewables such as offshore wind energy and promote electromobility.
  • In line with India’s vision of ‘One Sun, One World, One Grid’, both countries plan to launch new global ‘Green Grids Initiative’ to collaborate on interconnected grids for renewable energy.
  • Under the Climate Finance Leadership Initiative, both countries plan to join forces with private finance players to tap public and private finance for green development.

According to the statement, India and the UK have been encouraging other world economies and various corporations to focus on embraced climate change initiative for a sustainable future.

Companies that have made net zero commitments through the UN's 'Race to Zero' campaign include the following:

Key implementations of the India-UK initiative to promote industrial energy efficiency

  • Modelled on the UK’s climate change agreements, in July 2012, India’s Bureau of Energy Efficiency (BEE) launched the 'Perform, Achieve and Trade' (PAT) scheme to boost energy efficiency in industries and promote cost-effectiveness by leveraging technology.
    • As of 2020, the scheme has impacted 13 most energy-intensive sectors including railways, petrochemicals cement, fertilisers, iron & steel, refineries and thermal power plants.
    • Also, under the scheme, the industrial sector recorded energy savings of ~17 MTOE (million tonnes of oil equivalent) and CO2 mitigation of ~ 87 million tonnes per year.
  • In May 2006, the Bureau of Energy Efficiency (BEE) introduced the ‘Standards and Labelling’ (S&L) programme to promote energy-efficient electrical appliances.
    • As of March 2021, the programme included 28 appliances and >15,000 models of star-labelled (an energy savings symbol) energy-efficient products.
    • In FY21, the Standards and Labelling (S&L) programme led to an estimated electricity savings of 56 billion units, worth >Rs. 30,000 crore (US$ 4.11 billion).
    • The programme also helped in reducing CO2 emissions of ~46 million tonnes per year.
  • In 2016, the UK collaborated with the Bureau of Energy Efficiency (BEE) to design ‘Industrial Energy Efficiency Fund (IEEF)’ to collaborate with stakeholders and ensure new funds to boost the industry energy efficiency market.
  • In 2015, a knowledge exchange platform (KEP) was launched by India in collaboration with the UK for large scale industries to facilitate exchange of knowledge in capacity building, policymaking, technological innovations, etc.

Commitments by India
In June 2021, at the Innovating to Net Zero Summit, India launched the ‘Mission Innovation CleanTech Exchange 2.0’, a global initiative to create a incubators group across member countries to promote innovation in clean energy technologies.

Mission Innovation (MI) 2.0 is the second phase of the Mission's Global Innovation Plan, which was launched in conjunction with the Paris Agreement (2015). The mission aims to progress further on the climate change task of the Paris Agreement and net zero road, while making clean energy accessible, affordable and attractive for all worldwide.

Under this programme, mission members contribute > 90% of global public investment in clean energy to promote innovations and are committed to boost investments & collaborations to provide technologies needed to meet the requirement for climate change mission.

Mr. Harsh Vardhan, Minister of Science and Technology, said, "Mission Innovation (MI) has played a commendable role in organizing greater investment and public and private partnerships, thereby accelerating clean energy innovation. MI 2.0 emphasizes the importance of joint scientific efforts. To achieve the vision of an affordable and coherent clean energy system to enable countries respond to a sustainable future through innovation.

Initiatives by the Indian Government
Key initiatives taken by the Government of India are as follows:

  • In June 2021, Prime Minister Mr. Narendra Modi announced that the government has recognised 11 sectors to apply modern recycling techniques to enable efficient use of resources.
    • In line with this, the government released a roadmap to develop the ethanol sector and advanced the target to achieve 20% ethanol-blending in petrol by 2025. The government will focus on building the required infrastructure for production and procurement of ethanol in the country. For instance, the government announced to establish technology-based plants to manufacture/produce ethanol from agricultural waste.
    • In addition, Prime Minister Mr. Narendra Modi launched the E-100 pilot project to produce and distribute ethanol in India.
  • In May 2015, the government introduced the UJALA (Unnat Jyoti by Affordable LEDs for All) scheme, a LED-based domestic efficient lighting programme to promote energy efficiency in all households.
    • As per the National UJALA data, UJALA scheme resulted in annual cost savings of ~Rs. 19,000 crore (US$ 2.59 billion) over six years, translating to energy savings of ~47 billion kWh (kilowatt-hour) in 2021.

Conclusion
In line with several government initiatives to promote energy-efficient solutions, key industry players in India are taking various measures to expand in this space and leveraging strategic partnerships to develop and implement industry-efficient solutions. For example, in June 2021, EESL collaborated with the Indian Society of Heating, Refrigerating and Air Conditioning Engineers (ISHRAE) to implement efficient and clean energy solutions in the heating, ventilation, air conditioning and refrigeration (HVAC&R) industry. In April 2021, EESL and the Institute for Sustainable Communities (ISC) extended their partnership to increase industrial energy efficiency in India. As of FY21, the project has facilitated energy savings worth US$ 7.3 million by replacing inefficient motors. The collaboration is further aiming energy saving potential of 66.5 MkWh and an annual saving of US$ 62 million.

In addition, players are leveraging technology to adopt energy-efficient solutions. For example, in June 2021, Convergence Energy Services Limited (CESL), a wholly owned subsidiary of EESL, signed a MoU with CLASP (Collaborative Labelling and Appliance Standards Programme) to deploy energy-efficient technologies. In April 2021, Hero MotoCorp collaborated with Gogoro Inc, a Taiwan-based battery swapping platform, to boost the transition to smart, sustainable electric mobility in India.

With key developments in the energy efficiency space, India is progressing well on its path of sustainable journey. Moreover, India’s collaboration with the UK has helped transform the industrial energy efficiency across the country. The success of PAT scheme is an example and demonstration of changes brought by the collaboration of two countries that could help pool resources and enable faster implementation of energy-efficient solutions.

The ‘Roadmap 2030’ further demonstrates the strengthening of the India-UK alliance and sets the foundation for the two countries as well as world economies to benefit from the programme and offer cleaner, more affordable and resilient energy.

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