Whose burden is it anyway?

The need for promoting energy efficiency is well-known. Insufficient capacity additions, increasing environmental concerns and energy and peak shortages are key reasons why the country has to promote energy efficiency. According to the Integrated Energy Policy, the potential of demand side management (DSM) is about 15% of the total electricity demand. But despite that, implementation of demand side energy management measures remains poor.

By the Energy Conservation Act 2001, state-designated agencies (SDAs) should coordinate, regulate and enforce provisions of the Act in their areas. However, in most cases, the ministry of renewable energy's state nodal agencies are doubling up as SDAs without a commensurate increase in manpower and skill sets. As a result, not much progress has been made on the ground and these institutions continue to focus on promotion of renewable energy rather than energy conservation.

Besides, distortionary electricity pricing has inhibited the promotion of energy efficiency. Electricity prices in India are either directly subsidised by the state governments (especially for agricultural consumers) or are cross-subsidised by other categories such as industrial consumers, thereby, leaving little incentive for efficient utilisation of electricity for most.

The lack of motivation of utilities is also a barrier. The conventional theory that the primary business of the utilities is to sell electricity and not to save it still holds sway. The focus has always been on improving efficiency at the supply side, with the demand side more or less ignored.

This precisely explains the reason why dedicated DSM cells are either not being created by the utilities or, if created, remain dysfunctional. Further, there have been failures to capitalise on the learning from various DSM interventions.

Utilities have taken up several initiatives over the years to promote energy-efficient appliances through pilot projects. However, these schemes have been largely limited to the lighting segment and failed to translate into bigger programmes. The experience has not been utilised to develop programmes/schemes for other segments or sectors.

High initial cost and poor awareness and information about energy efficient products are some of the barriers that need to be addressed.

However, there is no single solution that can be prescribed to address these barriers. A mix of policy, regulatory, financial instruments and interventions are required to address these barriers and to promote energy efficiency in the country.