To combat climate change, India comes up with first state energy efficiency index

The energy efficiency index is based on 63 indicators in sectors such as buildings, industry, municipalities, transport, agriculture and electricity distribution companies (discoms). Photo: Pradeep Gaur/Mint

New Delhi: In what will help India’s strategy for achieving its climate change commitments, the Bureau of Energy Efficiency (BEE) has come up with the country’s first state energy efficiency preparedness index.

The index will help track the progress in managing the energy footprint of states and the country, encourage competition between states and help in programme implementation.

Such an index assumes significance in a country that is now the biggest emitter of greenhouse gases after the US and China, and which is among the countries most vulnerable to climate change. India plans to reduce its carbon footprint by 33-35% from its 2005 levels by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.

“This is a good move and holds importance in context of our commitments made at Paris,” said a government official requesting anonymity.

The energy efficiency index is based on 63 indicators in sectors such as buildings, industry, municipalities, transport, agriculture and electricity distribution companies (discoms). These indicators are based on metrics such as policy and regulation, financing mechanisms, institutional capacity, adoption of energy efficiency measures and energy savings achieved.

“States are also making different efforts. This index will guide them and help streamline the efforts of the states and channel their actions,” said Abhay Bakre, director-general at government-backed BEE, which is leading the government’s efforts to set energy efficiency benchmarks and to have policies that will reduce the carbon intensity of the economy.

According to BEE, energy efficiency could help India save 500 billion units of energy and avoid the need for 100 gigawatts (GW) of power capacity within 2030. This translates to a potential reduction of 557 million tonnes of carbon dioxide emission. India’s energy efficiency market is estimated at $23 billion with a vast potential to grow.

The National Democratic Alliance government is also working towards providing appropriate price signals for achieving the demand- side response. This includes the perform, achieve and trade (PAT) programme, a market-based energy efficiency trading mechanism for moving towards cleaner cooking fuels. Early favourable signs are visible. With an investment of $4.07 billion, the first phase of the PAT programme resulted in $1.46 billion savings.

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Other measures in the works include redefining India’s mobility architecture through electric vehicles (EVs), improving energy efficiency of electrical appliances, motors, agricultural pumps and tractors, and even buildings.

NITI Aayog has also pitched for an “overarching energy efficiency policy”, along with making energy efficiency a priority lending sector for banks and financial institutions.