Measurement & Verification: The ‘missing link’ in India’s Energy Efficiency story

In the past 40 years the consumption of energy in India has grown at 6% per annum, but production grew only 4.5% per annum. This shows a huge demand-supply gap and is the reason why India is not able to meet its electricity generation targets. Further compounding the situation are the very large T&D and AT&C losses, increasing fossil fuel prices and stagnant domestic hydrocarbons production in the country.

As per various Power sector studies, energy efficiency stands out as the best option for overcoming the issue of shortfalls in power supply, as one unit of energy saved at the consumption level reduces the need for fresh capacity creation by 2.5 times to 3 times. Further, it has been estimated that nearly 25,000 MW can be saved by implementing end-use energy efficiency and demand side management measures throughout India. Energy conservation potential for the economy as a whole has been assessed as 23% with maximum potential in industrial and agricultural sectors.

The Government of India is aggressively promoting Energy efficiency through the Energy Conservation Act and the National Mission for Enhanced Energy Efficiency, the Energy Conservation Building Code, Performance Contracting (PC) by ESCOs; Standards & Labeling for energy efficient appliances and demand side management programmes.

However, in spite of all this awareness, energy efficiency projects are not attaining the desired pace because of challenges present in the current market scenario. In a recent study CyberMedia Research (CMR) pointed out some reasons for the failure of the ESCO industry to take off in the country, but these reasons are applicable to most of the areas related to energy efficiency as mentioned below.

Figure 1. Factors responsible for the below par performance of the India ESCO industry

During the analysis it was observed that baseline measurement and measurement & verification (M&V) have the most impact on energy efficiency projects. Other factors like delays in decision making by clients and financers, disputes in sharing of savings, customer confidence on ESCO or other types of energy efficiency service providers are directly connected to the M&V issue. Client and financers will be interested in the projects if actual achievable savings can be verified by a third party or external expert. Thus measurement & verification becomes the missing link in Energy Efficiency projects.

Measurement and Verification in Energy Efficiency projects: As per Evolution Verification Organization (EVO), M&V is a process of using measurements to reliably determine actual savings created within an individual facility by an energy management programme. Savings cannot be directly measured, since they represent the absence of energy use. Instead savings are determined by comparing measured use before and after implementation of a project, making appropriate adjustments for changes in conditions.

M&V Implications in the India Scenario: M&V process for determination of savings is required for all energy efficiency projects whether commercial, industrial or government. This is because decision makers for implementing any EE project will be interested in a project if the achievable savings are calculated properly. Presently M&V process can be implemented in the areas mentioned below:

  • Perform-Achieve and Trade (PAT): Government of India has launched PAT scheme on 1st of April 2012. In this program 478 units from eight energy intensive industries have been identified as designated consumers. These units need to reduce their energy consumption by a certain percentage. M&V process will help to determine the actual savings and the presence of third party M&V professionals would have greater acceptability for the savings achieved amongst the concerned stakeholders.
  • Energy Service Companies (ESCOs): The ESCO industry is still in a nascent stage and in year 2010-2011, the revenues of 114 ESCOs accredited by Bureau of Energy Efficiency (BEE) was around Rs. 98 Crore (Source: CyberMedia Research, 2012). When the M&V process comes into the picture, clients and financers will have more confidence in performance contracting as they would have an independent, third party verifier to determine the achievable savings.
  • Demand Side Management (DSM): Water supply and street lighting systems generally take away around 50% to 60%  of the total budget of municipalities. In the recent past we have seen municipal corporations float RFPs for street light and water pump projects but either these RFPs are later scrapped or not properly implemented. The main issues behind this remain the same (baseline measurement, M&V and trust factor between parties). M&V process will help in proper implementation of these projects by building trust via a third party verifier of actual savings achieved.

Agricultural sector uses around 20% of the total national consumption of electricity. Electricity utilities provide farmers with subsidies of about Rs 42,000 Crore annually. Around 20 million inefficient pumps make the situation worse. BEE has plans to involve private players to replace theses pumps with energy efficient pumps in different phases. M&V process can be a link between pump manufacturers and electricity utilities to determine the efficiency of pumps in terms of energy savings. This process will help all three parties: farmers to get an efficient pump, pump manufacturers to get back the investment by sharing the savings and utilities to reduce the consumption of highly subsidized electricity.

  • ISO 50001: Implementation of M&V processes is also a pre-requisite forISO 50001 certification for organizations. Any organization that wishes to beISO 50001 certified must have an energy management system in place that commits to the reduction of energy consumption by a specified percentage. Adoption of M&V processes helps in determining the energy savings achieved.

Future of M&V in India: In later phases of the PAT regime, it is possible that the government will come up with mandatory energy audits for industrial units to setup a baseline for their energy consumption. In such a scenario, the M&V process will also help in bringing down manufacturing costs, as energy consumption per unit of output will go down.

The concept of M&V is still quite new and only a few professionals are M&V certified inIndia, currently. Countries such as theUSA,Canada,China,SpainandFranceare following M&V regimes for a long time and we need to learn from their experience. As M&V is an evolving process, it is a must thatIndiaand Indian professionals must be updated on the latest technologies and methodologies around the world.

In India AEEE (Alliance for an Energy Efficient Economy), a non-profit organization has joined hands with EVO (Efficiency Valuation Organization) of United Kingdom to promote awareness and adoption of M&V processes and ISO 50001 certification. To know more about AEEE and their upcoming events on M&V, please log on to http://www.aeee.in/.

2 thoughts on “Measurement & Verification: The ‘missing link’ in India’s Energy Efficiency story

  1. Romesh Kumar Aggarwal Reply

    There are many issues cotained in this beautiful article. I will try to give some answers. We can develop details later on.
    Year 1961, the day Goa was liberated, Place Mumbai, 10 students of ME in Electrical Machine Design from University of Roorkee along with their American Professor Charles S Siskind, waited for 2 hours at the gates of shanty making around 5 Horse Power Motors. They had travelled by train for 48 hrs from Roorkee to Mumbai to see manufacture of Electrical Machines. That was the level of technology in India, in the end of 1961. HEIL Bhopal was still coming up.
    Installed capacity and its growth I will not touch.
    Two out of these ten, joined a great unique movement, a vision of our first Prime Minister, late Pt. Jawahar Lal Nehru. In December 1973, India had manufactured its First 210 MW Generator. A period of only 12 years had passed and we had come at par with rest of the world.India and its electric generating capacity was on the roll, sing indigenous machines. On that day, late Mrs Indir Gandhi had said “Congratulations to you on behalf of all the Citizens of India, thankyou and best wishes for a bright future” –JADOO TO AAPNE KAR KE DIKHAYA HAI’
    Keeping pace with the growth around the world, we tested our first 500 MW Generator in 1986. The first 500MW TG set was commissioned at Singrauli in December 1986. The momentum was already built. The technology had been learnt.
    The biggest wealth was the stupendous growth of trained and experienced manpower (artisans) who had made efforts to convert theselves from purely Agricultural Mind set to a highly disciplined method of working under supervision and guidance. They had picked up skills, not ever seen by anybody so far in India. They had become accepted authority in their specialisation. Imagine a crane operator, sitting 30 meters above the ground, manipulating a 250 ton turbine casing to keep it gently on the ground. That also operating two cranes in tandem, due to inadequate load capacity of one crane. He communicated with his assistant on the ground through hand, finger, gestures or whtling with the mouth. Use of wireless was prohibited at that time.
    When we tested our first 500 MW TG, there were streams and streams of cables all around on the bed plates, all sizes and voltages upto 33 kV. Our control room was on the second floor. No wireless, no mobiles and the noise will not allow a telephonic conversation. We communicated by Flags like scouts or large letters written od card boards like spellofun. We used hand held techometers on shafts running at 3600 rpm.
    This preamble is necessary to understand the situation. Large Electrical Machine Making is a capital intensive industry. Not only large money, but also large muscels, big hearts and sharp brains. For all this, the inputs have to be organised, taking into account the fast changing technology around you.
    A step back. Like us, the users, the consultants, the planners the commissions and omissions were all novices. It is here our old habbits cropped up again and again. It was our natural responsibility to educate each one down in the chain right upto the consumer. Any other developing nation (may be) would accept this as the core competence to build up its bench strength and increase the pace of production.
    What we did was just the opposite. Hen came first or the egg, no one will ever find out. Consequences we face each day.
    25 to 30 years of operation will exhaust and obliterate any technology and the humans. That is the time, wise persons will inject the needed input. Our foot in the mouth culture went the other way round. 1991 was the year of liberalisation and privatisation. We also needed more and more power, so killed the hen. We throttled all the inputs to the mnufcturing expertise, just because it was a PSU, owned by the decision makers themselves. Colleges turn out software social Brand,
    of engineers, the next generation of the labour, istead of following their fathers, diverted to other area and so on.
    Now you can have the initial back ground. Saving through energy efficiency is a matter of culture. Our people do not differentiatr between power efficiency and energy efficiency. Even the units are different, Watt and Watt hour. We can continue later.
    I want to raise a basic question
    Dont you think privatisation of (FDI in) consumer good would have been better in 1991 and of capital industry now?

  2. James Ferguson @kWIQly Reply

    Very clear article solidly written.
    Initiatives to save energy that are not backed by effective informations may be folly in the first place, and in the second may not succeed.

    It would be like placing tennis with your eyes closed – not only pointless and frustrating, but ridiculous and quite unlikely to win !

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