The Hindu Business Line : `Energy service cos can play vital role in efficiency'

Given the large potential that existed for industrywide savings through efficient energy management, the way forward is to join hands with energy service companies (ESCOs).

Pointing out that the concept went well beyond mere energy audits, Mr Debashish Majumdar, Managing Director of Indian Renewable Energy Development Agency Ltd (Ireda), said here that from an overall industry perspective, vendor ESCOs, in particular, could play a big role in energy efficiency in the near future. Among the few such outfits in the country are names like the Thane-based Asian Electronics and Honeywell (formerly Tata Honeywell).

Speaking at an interactive session organised by the Environment Management Centre of Indian Chamber of Commerce here today, Mr Majumdar said Ireda, which now wants to project itself as a "bundling agency", (a kind of one stop outfit for energy efficiency and conservation financing), undertakes energy efficiency projects involving waste heat recovery based power (sponge iron units) and energy efficient equipment in sugar mills and cement units.

IREDA finances up to 80 per cent of project cost (and up to 75 per cent of equipment cost), at rates ranging between 5 per cent and 12.5 per cent, and a moratorium of up to 3 years.

During 2005-06, the agency disbursed Rs 300 crore, and expects to take this to Rs 450-500 crore in the current fiscal, Mr Majumdar pointed out.

Exercise

He said Ireda has launched an exercise towards capacity building and technical assistance for design and implementation of ESCO projects in West Bengal (in the buildings sector) through a performance contracting mechanism.

The work also involves energy audit work to collect required baseline energy consumption data for a minimum of two buildings.

Wind power

Suggesting that some 5000 MW of wind power has been generated so far, which was nearly 5 per cent of the total power generated in the country, he said the units were modular with much lower gestation periods compared to conventional power plants.

On bio-diesel projects, he clarified that such units should actually use the seeds route to generate power for captive use (or for grid supply) as there may not be many takers for bio-diesel in domestic markets. He said the Government was also seriously considering introduction of energy labelling, especially for products such as ACs and refrigerators.

Lamenting that only small groups of industry people have really understood the advantages of renewables like wind power, he said energy efficiency also offered opportunities for clean development mechanism projects which can yield cash through trading in the fast growing carbon credits markets internationally.