India Energy efficiency report

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1 India Energy efficiency report Objectives: o 5% savings in energy consumption by 215 o Avoided electricity capacity addition of 19, MW by 215 Overview - (%/year) Primary intensity (EU=1)¹ % ++ CO2 intensity (EU=1) % - CO2 emissions per capita (in tco /cap) % -- Power generation - (%/year) Efficiency of thermal power plants (in %) % -- Rate of electricity T&D losses (in %) % ++ CO 2 emissions per kwh generated (in gco /kwh) % -- Industry - (%/year) Energy intensity (EU=1) % + ++ Among best countries + Better than the EU average 1 - Below the EU average 1 --Among countries with the lowest performances Latest update: January The European Union, as the best performing region, is used as the benchmark.

2 1. Overview 1.1. Policies: 5% reduction in energy consumption by 215 In Parliament adopted a law on energy efficiency, known as the Energy Conservation Act. The law, which came into force in March, required large energy consumers to implement specific actions and introduced energy consumption labels and performance standards for electrical appliances. The Bureau of Energy Efficiency was created to implement those provisions. Within the National Action Plan on Climate Change (NAPCC) adopted in, a National Mission for Enhanced Energy Efficiency was launched with several targets for : annual fuel savings of at least 23 Mtoe, a cumulative avoided electricity capacity addition of 19, MW and a CO 2 emission mitigation of 98 Mt Energy consumption trends: surge driven by electricity demand Total energy consumption per capita remains very low. In it reached.6 toe, compared with a global average of 1.9 toe and around 1.2 toe for non-oecd countries. Primary energy consumption has been increasing rapidly since (4.2 percent/year), with a growth rate of over 6 percent/year since. The global economic downturn in did not affect that rapid pace. Figure 1: Energy consumption trends by sector 8 7 Other Industry Power generation 6 5 Mtoe The share of industry (including non-energy uses) in primary energy consumption has been relatively stable since (27 percent), whereas the share of consumption in the power sector has risen strongly (from 19 percent to 35 percent) due to the rapid development in electricity uses and a power production mainly based on coal power plants (capacities tripled over the period). Electricity consumption per capita is very low: 61 kwh in, compared with an average of about 1,4 kwh in non-oecd countries. Total electricity consumption is increasing more rapidly (7 percent/year since ) than final energy consumption (4 percent/year); as a result, the share of electricity in final energy consumption is developing and reached 13 percent in (7 percent in ). Industry accounts for 45 percent of the country s total electricity consumption. India Country reports 2

3 Figure 2: Electricity consumption trends by sector TWh 8 7 Industry Others Energy efficiency: large reduction in very high energy intensity Total energy consumption per unit of GDP (primary energy intensity), measured at purchasing power parity, is similar to the world average but remains lower than the average for non-oecd countries. Total energy intensity has decreased by 2.2 percent/year since. About 3 percent of that decrease was achieved by industry through the reduction of its energy intensity. The power sector had a negative impact on energy intensity since its efficiency decreased over the period. Figure 3: Energy intensity trends.5% - - %/year.% -.5% -1.% -1.5% -2.% -2.5% -3.% Total Power generation Industry India Country reports 3

4 2. Power generation: deterioration of energy efficiency The average efficiency of power generation is decreasing and in stood at 3 percent, compared with 36 percent in. The reduction of the share of hydroelectricity, the development of nuclear power and the aging of coal power plants explains the deterioration of that ratio. The rise in gas-fired capacities, mostly combined cycles -which are much more efficient than coal power plants-, led to a smaller drop in the efficiency of thermal power plants. In thermal power plants had an efficiency rate of 28 percent, compared with 3 percent in. In, gas combined cycles accounted for 14 percent of thermal capacities and almost the entire gasfired power production. Figure 4: Efficiency of power generation and thermal power plants Figure 5: Thermal electricity capacity, by technology % Total power generation Thermal power plants 26 GW Steam Gas turbines Combined cycles Transmission and distribution losses are very high but have been decreasing since (from 3 percent to 2 percent in ). Around 5 percent of those losses are non-technical losses (unpaid electricity). The losses exceed 4 percent in eight states, range between 3 percent and 4 percent in seven other states and between 2 percent and 3 percent in a further eight states. India is far above the average for non-oecd countries, which stands at 11 percent. Figure 6: Electric T&D losses % India Country reports 4

5 3. Industry 3.1. Policies: an ambitious program for energy intensive branches In the framework of the Energy Conservation Act, large industrial energy consumers in nine sectors have to implement energy audits, appoint certified energy managers and report energy consumption data. As part of the National Mission for Enhanced Energy Efficiency, energy efficiency improvement targets should be assigned to the country s most energy-intensive industrial units and tradable Energy Savings Certificates (ESCerts) should be created within the Perform, Achieve and Trade (PAT) scheme. That mandatory scheme sets benchmark efficiency levels for 563 large consumers in designated sectors (power plants, steel mills, cement plants, etc.) that together account for 54 percent of the country's energy consumption. Consumers will receive ESCerts depending on the amount of energy saved in a target year. The scheme allows companies exceeding their target (ie using more energy than stipulated) to buy tradable energy saving certificates from those using less energy, creating an Energy Savings Certificate market estimated by the Government to be worth about $16 billion in 214 when trading starts Energy consumption trends: sustained growth Industrial energy consumption has soared by 7 percent/year since, supported by a high GDP growth rate (8.5 percent/year since ). The sector s energy consumption was not affected by the global economic slowdown and increased by 8 percent in both and. Figure 7: Trends in industrial energy consumption Mtoe The share of electricity in industrial energy consumption is increasing steadily (5.8 percent/year since ) and reached 18 percent in, compared with 13 percent in. Coal is the dominant fuel; its market share decreased in the s (from 44 percent in to 34 percent in ), then remained stable until and since then has increased on a yearly basis, reaching 4 percent in. The share of energy-intensive industries in the country s overall industrial energy consumption has been stable since. They accounted for just below 35 percent of the sector s energy consumption in. The share of the steel industry has remained pretty stable since then and in stood at about 2 percent. The market shares of the chemical industry and the non-metallic minerals industry (cement, ceramics, etc.) decreased slightly between and : from 9 percent to 8 percent, and from 1 percent to 7 percent, respectively. The paper industry has maintained its market share since (2 percent of the total). India Country reports 5

6 Figure 8: Energy consumption of industry, by source Figure 9: Energy consumption of industry, by branch* 1% 1% 9% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Biomass Heat Electricity Gas Oil Coal/Lignite 8% 7% 6% 5% 4% 3% 2% 1% % Other Paper Non metallic minerals Chemical Steel 3.3. Energy intensity trends: large improvements achieved in industry Between and, industrial energy intensity fell by more than 2.5 percent/year. Since, it has decreased at the slower pace of 2.4 percent/year. Figure 1: Trends in industrial energy intensity.% -.5% - - %/year -1.% -1.5% -2.% -2.5% -3.% *Including construction and mining India Country reports 6

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