The Hindu Business Line : Centre's move to supply CFLs at lower prices

The scheme
A tie-up between CFL maker and distribution utility of an area would entail distribution to domestic consumers at Rs 10-15 per piece, besides a one-time buy-back and disposal charge of around Rs 2.

New Delhi June 20 The Centre has proposed a novel public-private partnership scheme to utilise the clean development mechanism (CDM) of the Kyoto Protocol to increase penetration of compact fluorescent lamps (CFLs) among domestic consumers across the country.

The scheme aims at enabling private sector CFL manufacturers to collaborate with distribution utilities and sell CFLs at around Rs 10-15 per piece to households, while recovering the balance costs from CDM revenues.

The high cost of CFLs, at over Rs 100 per piece, has been the biggest deterrent to their mass use in the household sector. The scheme aims to overcome the price barrier.

The project has already been kick-started in Haryana and Andhra Pradesh, where the distribution utilities have tied-up with CFL manufacturer, Osram, under a CDM-based scheme, State Government officials said.

Proposed scheme

This is how the proposed scheme would work. A tie-up between the CFL manufacturer and the distribution utility of an area would entail distribution to domestic consumers at Rs 10-15 per piece, besides a one-time buy-back and disposal charge of around Rs 2.

The Centre, on its part, would put in place a data acquisition system to monitor and verify the impact of the scheme to enable manufactures to claim carbon credits.

For carbon credit

Under this, it would prepare a sample group of around 500 or more households in a designated area that have shifted to CFLs, while using another baseline group that continues with incandescent bulbs. The monitoring system would gather data on CFL usage required to verify carbon emission reductions, setting the stage for manufacturers to claim carbon credits.

The scheme, according to the Power Ministry estimates, is not likely to eat into the profits of CFL manufacturers, despite the low sale price of Rs 10-15 per piece. Assuming a sales price of around Rs 120 per piece for a high-end 10,000-hour life CFL, the manufacturer would get an upfront Rs 10-15 from the consumer.

According to Ministry estimates, one CFL would accrue revenues of Rs 20-25 per annum by the sale of credits under approved baseline and monitoring methodology `AM0046' of the CDM Executive Board. The Rs 100-odd price hit that the manufacturer takes on every CFL sold under the scheme would be recovered by the manufacturer in five years.

Lighting points

There are an estimated 500 million lighting points in the country and the Centre is targeting sales of around 100 million CFLs in a phased manner through the programme.

Responding to the scheme, Mr Mathew Job, Marketing Director, Philips Lighting, said: "We believe that this programme will provide a boost to increase adoption of CFLs. However, right now its modalities are being detailed... "

Mr Vivek Mahendru, President- Operations of Indo Asian Fusegear Ltd, said: "We would definitely be keen to partner the Government... However, the proposal is still at a nascent stage and so it remains to be seen how easily it could be executed."

Carbon credits are incentives companies can earn by trading credits for using clean development mechanisms as defined by the Kyoto Protocol. These include an international emissions trading regime that enables developed countries to buy and sell emission credits and co-operate in projects under a system of joint implementation where one country can finance emission reductions in another.

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