AMITY BUSINESS SCHOOL, AUUP

PROJECT REPORT

ON

ENERGY CONSERVATION ACT

INTRODUCTION

India has made rapid strides towards economic self-reliance over the last few years. Impressive
progress has been made in the fields of industry, agriculture, communication, transport and other
sectors necessitating growing consumption of energy for developmental and economic activities.
If India is to achieve the targeted growth in GDP, it would need commensurate input of energy,
mainly commercial energy in the form of coal, oil, gas and electricity. However, India’s fossil
fuel reserves are limited. The known reserves of oil and natural gas may last hardly for 18 and 26
years respectively at the current reserves to production ratio. India has huge proven coal reserves
(84 billion tonnes), which may last for about 200 years but the increasing ash content in Indian
Coal as well as associated greenhouse gas emissions are the major concern.

Energy being an important element of the infrastructure sector has to be ensured its availability
on sustainable basis. On the other hand, the demand for energy is growing manifold and the
energy sources are becoming scarce and costlier. Among the various strategies to be evolved for
meeting energy demand, efficient use of energy and its conservation emerges out to be the least
cost option in any given strategies, apart from being environmentally benign.

The steps to create sustainable energy system begin with the wise use of resources, energy
efficiency is the mantra that leads to sustainable energy management.

Energy conservation is the practice of decreasing the quantity of energy used. It may be
achieved through efficient energy use, in which case energy use is decreased while achieving a
similar outcome, or by reduced consumption of energy services. Energy conservation may result
in increase of financial capital, environmental value, national security, personal security, and
human comfort. Individuals and organizations that are direct consumers of energy may want to
conserve energy in order to reduce energy costs and promote economic security. Industrial and
commercial users may want to increase efficiency and thus maximize profit.

IMPORTANCE OF ENERGY CONSERVATION

In a scenario where India tries to accelerate its development process and cope with increasing
energy demands, conservation and energy efficiency measures are to play a central role in our
energy policy. A national movement for energy conservation can significantly reduce the need for
fresh investment in energy supply systems in coming years. It is imperative that all-out efforts
are made to realize this potential. Energy conservation is an objective to which all the citizen in
the country can contribute. Whether a household or a factory, a small shop or a large commercial
building, a farmer or a office worker, every user and producer of energy can and must make this
effort for his own benefit, as well as that of the nation.

ENERGY CONSUMPTION BY END USE : GLOBAL

ENERGY SCENARIOS

SCENARIOS FROM EIA INTERNATIONAL ENERGY OUTLOOK

ENERGY CONSUMPTION BY END-USE SECTOR AND FUEL
TOTAL WORLD

Re fere nce :
1. International Energy Outlook 2008 (EIA)

Reference Case
(Quadrillion Btu)
Av annual %
History Projection change
Sector/Fuel 2005 2010 2015 2020 2025 2030 2005-2030
Residential
Liquids 10.4 10.3 10.5 10.8 11.0 11.1 0.3
Natural Gas 19.1 20.5 22.1 23.2 24.1 25.2 1.1
Coal 3.2 3.3 3.5 3.6 3.5 3.3 0.2
Electricity 15.1 18.1 20.7 23.1 25.2 27.4 2.4
Renewables 0.7 0.7 0.6 0.6 0.6 0.6 -0.4
Total 48.5 52.8 57.5 61.3 64.4 67.6 1.3
Commercial
Liquids 5.1 4.9 5.1 5.1 5.2 5.3 0.2
Natural Gas 7.3 7.6 8.2 8.7 9.2 9.6 1.1
Coal 0.8 0.8 1.0 1.0 1.0 1.0 0.9
Electricity 12.3 14.6 17.1 19.2 21.3 23.4 2.6
Renewables 0.2 0.2 0.2 0.2 0.2 0.2 0.0
Total 25.6 28.2 31.5 34.2 36.9 39.5 1.7
Industrial
Liquids 55.4 58.6 61.8 65.3 68.3 72.0 1.1
Natural Gas 45.2 51.4 57.6 62.6 66.5 70.2 1.8
Coal 41.2 46.0 51.0 55.3 59.9 64.2 1.8
Electricity 26.2 32.7 38.4 43.2 47.9 52.2 2.8
Renewables 2 2.5 2.9 3.5 4.4 4.5 3.2
 Total 170 191.2 211.8 230 247 263.1 1.8
Transportation
Liquids 88.2 98.2 108.1 116.2 123.9 132.8 1.6
Natural Gas 1.0 1.1 1.3 1.4 1.5 1.6 1.9
Coal 0 0 0 0 0 0 -100
Electricity 0.8 1 1 1 1 1 1.2
Total 90.2 100.4 110.5 118.7 126.5 135.4 1.6
All End-Use Sectors
Liquids 159 172 185.5 197.5 208.5 221.2 1.3
Natural Gas 72.6 80.7 89.1 95.9 101.3 106.5 1.5
Coal 45.3 50.4 55.7 60 64.4 68.5 1.7
Electricity 54.4 66.3 77.1 86.4 95.4 104.1 2.6
Renewables 2.9 3.4 3.8 4.3 5.2 5.3 2.4
Delivered Energy 334.3 372.6 411.2 444.2 474.8 505.7 1.7

Electricity- 128.0 139.8 151.8 164.2 177.0 189.0 1.6

Related Losses
Total 462.2 512.5 563.0 608.4 651.8 694.7 1.6
Electric Power
Liquids 10.4 9.2 8.9 8.6 8.4 8.1 -1.0
Natural Gas 34.7 39.6 45.2 51.0 54.5 58.2 2.1
Coal 77.2 89.8 102.0 111.7 122.3 133.7 2.2
Nuclear 27.5 28.8 31.4 34.5 37.7 39.4 1.5
Renewables 32.4 38.5 41.1 44.8 49.4 53.6 2.0
Total 182.4 206.1 228.8 250.6 272.4 293.1 1.9
Total Energy Consumption
Liquids 169.4 181.1 194.4 206.1 216.9 229.3 1.2
Natural Gas 107.4 120.3 134.4 146.9 155.8 164.7 1.7
Coal 122.5 140.2 157.8 171.7 186.7 202.2 2.0
Nuclear 27.5 28.8 31.4 34.5 37.7 39.4 1.5
Renewables 35.5 42.0 45.0 49.3 54.7 59.0 2.1
Total 462.2 512.5 563.0 608.4 651.8 694.7 1.6
ENERGY CONSUMPTION BY END USE :INDIA

ENERGY SCENARIOS

SCENARIOS FROM EIA INTERNATIONAL ENERGY OUTLOOK

ENERGY CONSUMPTION BY END-USE SECTOR AND FUEL
COUTNRY :INDIA

Re fere nce :
1. International Energy Outlook 2008 (EIA)

Reference Case
(Quadrillion
Btu)
History Projection Av annual %
change
Sector/Fuel 2005 2010 2015 2020 2025 2030 2005-2030
Residential
Liquids 0.8 0.8 0.9 0.9 0.9 0.9 0.4
Natural Gas 0.0 0.0 0.1 0.1 0.1 0.1 3.9
Coal 0.1 0.1 0.2 0.2 0.2 0.2 2.4
Electricity 0.5 0.7 1.0 1.3 1.6 1.8 5.5
Renewables 0.0 0.0 0.0 0.0 0.0 0.0 —
Total 1.4 1.8 2.1 2.4 2.8 3.0 3.0
Commercial
Liquids 0.0 0.0 0.0 0.0 0.0 0.0 —
Natural Gas 0.0 0.0 0.0 0.0 0.0 0.1 —
Coal 0.1 0.2 0.3 0.3 0.3 0.3 3.0
Electricity 0.2 0.3 0.4 0.5 0.6 0.7 5.8
Renewables 0.0 0.0 0.0 0.0 0.0 0.0 —
Total 0.3 0.4 0.6 0.8 0.9 1.0 5.0
Industrial
Liquids 2.5 2.7 3.1 3.6 4.2 4.8 2.6
Natural Gas 0.8 1.1 1.4 1.5 1.7 1.8 3.6
Coal 2.4 2.6 2.8 3.1 3.5 3.9 2.1
Electricity 1.4 1.9 2.3 2.7 3.0 3.3 3.5
Renewables 0.0 0.0 0.0 0.0 0.0 0.0 2.0
Total 7.1 8.2 9.7 11 12.4 13.9 2.7
Transportation
Liquids 1.4 1.9 2.6 3.1 3.6 4.0 4.3
Natural Gas 0.0 0.0 0.1 0.1 0.1 0.1 4.0
Coal 0.0 0.0 0.0 0.0 0.0 0.0 —
Electricity 0.0 0.1 0.1 0.1 0.1 0.1 2.9
Total 1.5 2.0 2.7 3.3 3.7 4.2 4.2
 All End-Use Sectors
Liquids 4.8 5.4 6.6 7.7 8.6 9.7 2.9
Natural Gas 0.8 1.2 1.5 1.6 1.8 2 3.7
Coal 2.6 2.9 3.3 3.6 4.0 4.4 2.1
Electricity 2.1 2.9 3.8 4.5 5.2 5.9 4.2
Renewables 0.0 0.0 0.0 0.0 0.0 0.0 2.0
Delivered Energy 10.3 12.4 15.1 17.5 19.7 22.0 3.1
Electricity- 5.9 7.0 8.1 9.1 10.2 11.2 2.6
Related Losses /a
Total 16.2 19.4 23.2 26.6 29.9 33.2 2.9
Electric Power
Liquids 0.2 0.2 0.2 0.2 0.2 0.2 -0.1
Natural Gas 0.5 0.7 1.0 1.4 1.8 2.0 5.7
Coal 6.0 7.0 8.3 9.3 10.1 11.1 2.5
Nuclear 0.2 0.5 0.8 1.3 1.6 1.8 9.4
Renewables 1.1 1.5 1.5 1.6 1.8 1.9 2.4
Total 8.0 9.9 11.8 13.7 15.5 17.0 3.1
Total Energy Consumption
Liquids 5.0 5.6 6.8 7.9 8.9 9.9 2.8
Natural Gas 1.3 1.9 2.5 3.0 3.6 4.0 4.6
Coal 8.6 9.9 11.6 12.9 14.1 15.5 2.4
Nuclear 0.2 0.5 0.8 1.3 1.6 1.8 9.4
Renewables 1.1 1.5 1.5 1.6 1.8 1.9 2.4
Total 16.2 19.4 23.2 26.6 29.9 33.2 2.9

ENERGY CONSERVATION ACT 2001

This act of Parliament states that 15% of the energy consumption of any state is to be derived
from non-conventional energy sources. It assumes important situation of energy crisis and gives
the guidelines for dealing with it.

Salient features of the act

The Act empowers the Central Government and, in some instances, State Governments to:

•specify energy consumption standards for notified equipment and appliances;

•direct mandatory display of label on notified equipment and appliances;

•prohibit manufacture, sale, purchase and import of notified equipment and appliances not
conforming to energy consumption standards;
•notify energy intensive industries, other establishments, and commercial buildings as
designated consumers;

•establish and prescribe energy consumption norms and standards for designated consumers;

•prescribe energy conservation building codes for efficient use of energy and its conservation
in new commercial buildings having a connected load of 500 kW or a contract demand of
600 kVA and above;

•direct designated consumers to -

1o designate or appoint certified energy manager in charge of activities for efficient use of
energy and its conservation;
2o get an energy audit conducted by an accredited energy auditor in the specified manner and
interval of time;
3o furnish information with regard to energy consumed and action taken on the
recommendation of the accredited energy auditor to the designed agency;
4o comply with energy consumption norms and standards;
5o prepare and implement schemes for efficient use of energy and its conservation if the
prescribed energy consumption norms and standards are not fulfilled;
1- get energy audit of the building conducted by an accredited energy auditor in this
specified manner and intervals of time;

State Governments may –

3o amend the energy conservation building codes prepared by the Central Government to
suit regional and local climatic conditions;
4o direct every owners or occupier of a new commercial building or building complex
being a designated consumer to comply with the provisions of energy conservation
building codes;
5o direct, if considered necessary for efficient use of energy and its conservation, any
designated consumer to get energy audit conducted by an accredited energy auditor in such
manner and at such intervals of time as may be specified;
Establishment of Bureau of Energy Efficiency

Under the provisions of the Act, Bureau of Energy Efficiency has been established with effect
from 1st March, 2002 by merging the erstwhile Energy Management Centre, a society under the
Ministry of Power. The Bureau would be responsible for spearheading the improvement of
energy efficiency of the economy through various regulatory and promotional instruments.
The mission of the Bureau of Energy Efficiency is to develop policy and strategies with a thrust
on self-regulation and market principles, within the overall framework of the Energy
Conservation Act, 2001 with the primary objective of reducing energy intensity of the Indian
economy. This will be achieved with active participation of all stake holders, resulting in
accelerated and sustained adoption of energy efficiency in all sectors of the economy.

The primary objective of BEE is to reduce energy intensity in the Indian economy through
adoption of result oriented approach. The broad objectives of the BEE are:

•to assume leadership and provide policy framework and direction to national energy
efficiency and conservation efforts and programmes;

•to coordinate policies and programmes on efficient use of energy and its conservation with
the involvement of stakeholders;

•to establish systems and procedures to measure, monitor and verify energy efficiency results
in individual sectors as well as at national level;

•to leverage multi-lateral, bi-lateral and private sector support in implementation of the
Energy Conservation Act and programmes for efficient use of energy and its conservation;

•to demonstrate energy efficiency delivery mechanisms, through private-public partnership,

•to plan, manage and implement energy conservation programmes as envisaged in the
Energy Conservation Act.
Functions of BEE

The functions of BEE can be classified as regulatory functions being recommendatory body to
the Central Government in implementing the provisions of the Energy Conservation Act and
facilitation, market development and market transformation functions such as:

•arrange and organize training of personnel and specialists in the techniques for efficient use
of energy and its conservation;

•develop testing and certification procedures and promote testing facilities;

•strengthen consultancy services;

•create awareness and disseminate information;

•promote research and development;

•formulate and facilitate implementation of pilot projects and demonstration projects;

•promote use of energy efficient processes, equipment, devices and systems;

•take steps to encourage preferential treatment for use of energy efficient equipment or
appliances;

•promote innovative financing of energy efficiency projects;

•give financial assistance to institutions for promoting efficient use of energy and its
conservation;

•prepare educational curriculum on efficient use of energy and its conservation and

•implement international co-operation programmes relating to efficient use of energy and its
conservation.
Promotional Provisions to support EC Act

Various promotional provisions in support of the EC Act have, been initiated by the Bureau of
Energy Efficiency, which are briefly explained below:

1. Indian Industry Program for Energy Conservation (IIPEC)

This voluntary program of sharing of best practices, undertaking and specific energy
consumption targets has full acceptance in the 8 sectors of industry including aluminium,
cement, chlor-alkali, fertilizer, pulp & paper, petrochemicals, refinery and textile sector. Best
practices have been recorded and published through CDs and also incorporated in BEE’s website
which is being updated periodically for use of designated consumers.

2. Voluntary EC Policy Declaration by Indian Industry

Industries have been approached to declare their top management commitments on energy
conservation. 44 industrial units under the National Campaign on Energy Conservation 2005
declared their energy management policies and have committed to reduce their specific energy
consumption levels.

3. Small Group Activities on Energy Conservation

BEE supports designated consumers in improving their energy efficiency through launch of
voluntary programs .BEE launched Small Group Activity focused on energy conservation in 4
industrial units in textile and cement sector. Feed back received from the units indicate that about
5 % savings through housekeeping and no cost measures is possible through this concept.

National Energy Conservation Awards

Industrial units have been motivated through National Energy Conservation Award scheme. In
EC Award 2005, 311 participating industrial units saved Rs. 9891 millions per year against an
investment of Rs. 13161 millions, on account of implementation of various energy conservation
projects. Electricity savings achieved by the participating industrial units resulted in saving in
avoided capacity equivalent to 250 MW. Response from the first time introduced schemes for
Government Buildings and Commercial Buildings (Private Sector) was also encouraging. In
total, 32 buildings establishment participated (16 each in both types of establishments) and
collectively saved Rs.36 million.
National Campaign On Energy Conservation 2005
On 14th December, 2004, the Hon’ble Prime Minister of India, Dr. Manmohan Singh launched
the National Campaign on Energy Conservation, under which various measures, activities are
being undertaken during 2005 by Bureau of Energy Efficiency, industries, Schools, State
Governments and Designated Agencies, Public Sector units of Ministry of Power, etc. . The
Hon’ble Prime Minister as a part of the national campaign also released a postal stamp on energy
conservation.

Milestones Achieved in National Campaign on Energy Conservation-2005

•Secured the support of 75 industrial and commercial units in the campaign
•117 Seminars, Workshops and Training Programmes on Energy Conservation organized
(2700 participants)
•Opportunity provided to 8400 students to visit industry and make them aware about the
Energy Conservation practices and methods adopted by the Indian Industry;
•17560 nos. of Schools and 3.43 lakhs students of 4th & 5th standard participated in the
School Level Painting Competition on Energy Conservation in 35 States/UTs
•44 Industrial units and hotels declared their Energy Policies bringing in the top management
commitment
 •New Award Scheme for Government Buildings and Commercial Buildings launched and
executed

Mandatory provisions of the EC Act

 Strengthening energy management and energy auditing capabilities of energy

professionals:
 Accreditation of energy auditors:
 Fixation of norms for different industrial sector
 Manuals and Codes for standardizing the process of energy auditing
 Notification of Designated Agencies :-
27 States Governments and union Territories have notified State level Designated
Agencies for the prose of implementing EC Act within the state.

Energy and Climate Change

Introduction

Climate Change is perhaps the most talked about and debated topic related to energy in recent
years. The issues of adaptation and mitigation to combat the Climate Change Challenge are
widely discussed in many seminars and conferences. As per World Energy Council estimates,
early 1000 policies have been announced by Governments across the world to combat climate
change in last two decades, but there are very little documented facts available about the audit
and effectiveness of these policies.

Threat of unlivable world

The London climate change partnership has called for need of climate change adaptation to
recognize interaction between different measures in short, medium and long terms, in its report
“Adapting to climate change- Lessons for London”. It has sought to understand and review
policies and measures while highlighting flooding, high temperatures and limited water resources
as prime concerns of climate change for London that need advanced planning for adaptation
measures. Eighteen other cities, which are already having some kind of climate change
adaptation strategy, have been studied in this report.

Does it mean that the climate change is for real and there is a need, or may be an urgent need to
start looking at adaptation, as success of extent of mitigation measures is not yet proven.
World population has grown nearly seven-fold over the past 200 years. The world has been able
to cope with this increase partly due to the benefits of industrialization. From 900 million human
beings in the world 200 years ago, population was still just 1.65 billion a century ago and 2.5
billion in 1950. But by 2050 there are likely to be nearly 10 billion people using the world’s
resources of land, air, water and what lies underground. Although the rate of population growth
has recently been slowing as fertility rates decline almost everywhere, a substantial increase in
population lies ahead. "The Year 2000 Revision" by the United Nations of its World Population
Projections suggests a population of 9.3 billion in 2050 as its medium variant; 10.9 billion as its
high variant; and 7.9 billion as its low variant.

Furthermore, the projected increase for the next few decades is expected to come predominantly
in those developing countries currently least able to cope economically, and in many cases where
their natural environment is already under severe threat. The population of less developed
regions is projected to almost double from its present 4.9 billion to 8.2 billion. Of the total
increase, over 90% is expected to occur in the urban areas of developing countries and less than
10% in rural areas.

This will place enormous stresses on agricultural production and distribution systems, water
supplies (in terms of quantity available and quality), sanitation, medical services, housing, other
infrastructure, health and welfare provision. As none of these can do without energy, energy
services will be placed under most stress, both in terms of providing environmentally compatible
services in urban areas for an additional 3 billion people within 50 years and in addressing the
needs of rural populations, where 2.4 billion people are still denied access to modern energy
services.

Increasing demand for energy has no doubt adversely impacted the natural environment. The use
of fuel wood and animal dung in rural communities contributes to deforestation and soil
impoverishment. Fossil fuel emissions have caused acid rain and contribute to greenhouse gases.
Emissions from the use of most fuels – particularly wood, crop wastes, animal dung, coal and oil
– have had severe impacts on human health. Indoor pollution has most severe health affects -
lungs are affected, and victims become exposed to a range of respiratory diseases – some of
which have fatal consequences. The common thread in all these impacts is how we use and abuse
our land, water and Energy Sources.
All energy sources impact the environment. Some have less environmental impact – whether at
the local, regional, or global level – than others. The non-fossil fuels are also associated with
some detrimental effects. There is public concern about operational safety, hazardous waste
treatment and storage, and potential proliferation in the nuclear power field. There are also
several concerns about large hydropower schemes. Large-scale biomass development brings with
its concerns about sylvan mono-cultures and loss of biodiversity, competition for agricultural
land and water resources, and the adverse impacts of harvesting and burning. In short, all energy
sources have environmental impacts and can change the world around us. We will need to
understand and deal with these impacts if we are to provide people with the energy services they
require in a sustainable way.

Fossil fuel use is also heavily implicated in carbon dioxide, methane, and nitrous oxide
emissions. Carbon dioxide (CO2) is the most significant greenhouse gas (accounting for 60% of
the radiative forcing from all long-lived greenhouse gases emitted as a result of human
activities). Methane (CH4) emissions account for 22% of the total radiative forcing from all
greenhouse gases emitted by human activities. Nitrous
oxide (N2O) emissions account for 5% of the Total total
radiative forcing from all such emissions. In 1995, CO2
5% 13%
accounts for 82%, CH4 is 12%, NOx is 4% and
remaining GHGs are only 2%. Halocarbons,
22%
perfluorcarbons and sulphur hexafluoride are the 60% main
remaining greenhouse gases – all emitted as a result of
human activity. The first two of these are also
stratospheric CO2 CH4 Nox Others ozone
In 199 5 depleting
4% 2% substances covered by the Montreal Protocol. Sulphur
hexafluoride, emitted mainly from aluminium smelting, may
12%
also break down into a gas with an even higher radiative
forcing effect – trifluoromethyl sulphur pentafluoride
82% (SF5CF3) – emitted since the late 1950s and still increasing at
an annual rate of 6% per annum. Warming is also caused by
CO2 CH4 Nox Others certain aerosols, black carbon from the burning of biomass
and fossil fuels, mineral dust from agricultural and mining activities and cirrus cloud formation
from the vapour trails of aircraft.

The growing atmospheric concentration of carbon dioxide is now generally agreed to be the main
force behind global near surface temperature warming. The atmospheric concentration of carbon
dioxide, which was about 280 parts per million by volume in 1780 (at the beginning of the
Industrial Revolution) had risen to 320 ppmv by 1965, and to 367 ppmv by 1999. The
atmospheric concentration of methane was about 700 ppbv (parts per billion by volume) in 1780
and was 1750 ppbv in 1999. The other greenhouse gases (water vapour excluded) are wholly
anthropogenic and their atmospheric concentration has emerged since the 1930s. Greenhouse
gases other than carbon dioxide are believed to have a much larger warming impact per unit of
volume. Methane is believed to have 21-times, nitrous oxide 310-times, sulphur hexafluoride
23,900-times, and the HFCs and PFCs
Sectoral Emissions in 2003
between 150 and 11,700 times the
warming impact of carbon dioxide. This
13%
warming impact is termed the Global
41%
Warming Potential. 21%

Of the total emissions, 96% of CO2, 35% of

methane and 26% of NOx comes from 18% 7%
energy sector. If we look at global sectoral
Electricity fuel Conversion
emissions of CO2, we find that 41% Industry Transport
Buildings
comes from electricity sector, 7% from Fuel
conversion, 18% from Industry, 21% from transport and 13% from buildings.

Therefore, if the threat of human-induced global climate change is to be averted, then major and
early change is required in activities and lifestyles which cause greenhouse gas emissions, energy
sector in particular is a big challenge – including the use of fossil fuels; deforestation and the
burning of biomass; the use of a variety of materials in electric instruments and insulation; and
heavy reliance on ruminant animals and foodstuffs (particularly rice) that involve substantial
methane emissions – unless most of these emissions can be recaptured and reliably stored at a
feasible cost.

WEC’s Viewpoint on Climate change:

WEC is now engaged in the detailed assessment of climate change policies in the energy sector;
nonetheless, two broad messages are already clear.

• First, that energy is a dynamic and complex system, not simply a static entity from
which parts can be isolated to be excised, adapted or improved, without effect on the
broader picture. An increase in consumption in one part of the world affects the whole
world through its impact on prices and world markets; a change in demand for one fuel
will affect demand for other fuels; short term decisions may have long term effects in an
industry where investments typically have a lifetime of decades or more. Decision
making for energy needs to take account of these wider system effects – to look at
individual policy measures in isolation and assume that the rest of the energy system will
simply go on as before is unrealistic. Yet, this is largely what has been happening.
Climate change policies have been introduced essentially as autonomous elements;
different policy strands – liberalization; security; environmental protection – have been
treated in isolation without any real consideration of the overall effect. Perversely,
perhaps, one of the major impacts of climate change policies has been to create
uncertainty – and hence to inhibit investment and thus undermine the achievement of all
energy goals.

• The second key factor is the need for energy. Throughout history, mankind’s ability to
master its environment has been dependent upon the availability of energy. Only through
universal access to commercial energy, made possible by continued advances in
technology, can the worldwide demographic “Climate Change” now underway can be
solved. It is also true, as pointed out above, that in many ways energy and climate-change
are opposite faces of the same coin. Energy-related emissions make up such a large
proportion of anthropogenic greenhouse gases that it is impossible to deal with climate
change without affecting energy systems; equally, whatever happens with energy systems
will have an impact on climate change. But although energy is about climate change it is
not just about climate change – energy meets a range of basic human needs and powers
economic development. While this is often acutely apparent in developing countries, it is
equally true, if less obvious, of developed countries. Again, this can be seen in the EETS.
 Setting emissions caps for industry involves not just environmental considerations but
also wider issues of competitiveness, welfare and employment. In WEC terms, all three
A’s (Accessibility, Availability and Acceptability) have to be taken into account. When
this is not done, policies will either be compromised from the start or be ineffective, as
they will go against the grain of market and social dynamics.

WEC has assessed climate change policy measures against this background of the need for a
holistic approach, taking account of all three aspects of sustainable energy.

It is the view of WEC that the first problem in energy sustainability is that there are 4 billion
people, half of whom do not have any access to modern energy services, and the other half of
whom have unreliable and often unaffordable supplies? The pace at which basic access, as well
as reliable and affordable access, is being provided is highly unsatisfactory. They do not have the
opportunity to choose their energy source, let alone assess its full impacts; these people pay a
huge price for the non-traditional forms of energy they do gather and use, but the impact of such
a situation on all of us and on the world we live in is quite simply unsustainable.

Slightly more than one billion people in the industrialised countries (about 20% of the world’s
population) consume nearly 60% of the total energy supply whereas just under five billion
people in developing countries consume the other 40% of the total energy supply. Even taking
into account such factors as colder temperatures in some advanced countries, this imbalance is
significant. The two billion poorest people ($1000 annual income per capita or less), use only 0.2
toe of energy per capita annually whereas the billion richest people ($22000 annual income per
capita or more) use nearly 25 times more at 5 toe per capita annually.

Given this dramatically uneven distribution and the limited evidence of improvement in
economic growth in many developing countries, the number one priority in sustainable energy
development today for all decision-makers in all countries is to extend access to commercial
energy services to the people who do not now have it and to those who will come into the world
in the next two decades, largely in developing countries, without such access. Their opportunity
for education, good health and individual dignity is in doubt. Progress in meeting the energy
requirements of these roughly two billion people should be regarded as the first test of the
sustainability of our energy development path.
The challenge is to provide the minimum services, including energy services, to allow these
people to achieve a decent standard of living, not barely to survive. The manner in which modern
energy is supplied to everyone in the world is humanity’s greatest opportunity to establish an
environmentally sustainable system for the whole of the next millennium.

Mitigation policies:

Innovative ways of implementation of various policy and technological options will have to be
found. To give an example of Estonia, a Baltic state, a draft reform approved by the Government
calls for a partial reorientation of taxes from focusing on income to focusing on the uses of
natural resources and nature of pollution. The broader goal of this tax is to reduce GHGs and at
the same time not to increase the overall tax burden by balancing this increase by reduction of
income tax.

Policy based Approach

• Economic and fiscal instruments like focused subsidies and targeted energy taxes.
However, the general rule is that energy taxation affects poorer consumers more than the
wealthy.
• Emission trading, Feed in prices for electricity produced from renewables, CHP and
CDM & JI are other instruments that may be useful.
• Regulations and standards - Buildings standards , Appliance standards, Vehicles
regulations, Other environmental regulations such as the EU’s Integrated Pollution
Prevention and Control system which mandates the use of state of the art technologies
may also be aimed
• Voluntary agreements- voluntary agreements should get round some of the problems of
regulation. Because they are negotiated directly with those affected (usually industrialists
and manufacturers), they should have the benefit of flexibility of response and cost-
effectiveness.
• Information and awareness
• Promotion of alternate resources: Renewables, Hydro, Wind, Biomass, Solar, CHP,
Distributed generation, Nuclear, Alternate fuels, Cleaner fossil systems, Efficient
technologies, Energy Efficiency
 • Research and development to urgently deploy the teachnologies that have achieved the
demonstration stage and work on futuristic technologies.

Technology based approach

This is defined in a broad fashion to include development, diffusion, deployment and transfer
of technologies and practices for both the short and long term, ranging from energy
efficiency, clean coal, nuclear, renewables, Capture of Coal bed methane, reduction in gas
flaring, Reduction in methane leakage, Landfill gas capture, carbon capture and storage and
advanced transportation, so the scope is very wide. It also refers to longer term
“transformational” technologies such as hydrogen and nuclear fusion.

Reducing the carbon intensity of power generation (for which a range of alternatives already
exist, such as nuclear and renewables; the range may well be significantly boosted in the medium
term when carbon capture and storage becomes viable). Though a word of caution is necessary
when talking of Carbon Capture and storage, it is regarded as being one of the most promising
technologies currently under discussion; however, it is one thing to extract a small amount of
carbon dioxide from a small amount of flue gas for carbonated beverages or even a large amount
for advanced oil field recovery. Costs are more easily justified if the resulting product is useful. It
is quite another matter to extract all of the carbon dioxide from the massive amounts of flue gas
in a modern power station. We also cannot compare the challenge of flue gas carbon dioxide
recovery to the removal of carbon dioxide from a natural gas stream and its sequestration in the
ocean. The scope of equipment required for flue gas carbon dioxide separation is quite massive
in comparison. This is just one more field of development we need to understand better. A word
of caution is also necessary when discussing carbon sequestration. While further work on
alternate carbon sequestration /fixation is certainly welcome, the carbon storage route is debated
and not without associated risks of large scale catastrophic leakages.

Restraining the growth in transport emissions. In the short term restraining emissions,
stabilising them in the medium term; and reducing them in the long term should be the target. In
the near term, a number of options are available for reducing the carbon intensity of transport,
though a step change is unlikely to take place until viable carbon free alternatives are developed
and deployed. There are opportunities in energy efficiency and energy conservation through
provision of Good quality rapid mass transport, shift of transport to Railways and waterway,
Better quality of roads, use of alternate fuels, use of biofuels and synthetic fuels and so on.

Technology development, deployment and transfer need to be accelerated. Technologies are

available already or under development which could make an enormous difference to future
emissions trajectories. They need to be made accessible on a worldwide basis or we risk getting
locked into unnecessarily high carbon pathways

Climate Change and Energy Efficiency

It doesn’t need any emphasis to state that Energy efficiency is probably the priority area needing
utmost attention. Number of measures are used in this field and many countries have operated a
number of programmes for many years. Some of these programmes have been quite large scale –
for instance,

 As discussed earlier, India has set up a Bureau of Energy Efficiency under the Energy
Conservation Act 2001 with the aim of reducing energy intensity across the economy.

 Thailand has put great emphasis on energy efficiency, and its demand-side management
programme aims to reduce emissions by over 50 million tonnes per year.

 China implemented a Green Lighting programme in 1996-1998, during which it

marketed 267 million high efficiency products. China has placed energy efficiency at the
very centre of its energy policy, with resource conservation much in mind – with its
rapidly growing energy demand, it wishes to make the best possible use of its indigenous
energy resources.

In principle, energy efficiency offers scope for meeting a wide range of energy policy objectives
if implemented effectively. It can add to the global security of energy supplies by reducing the
need for energy and hence the call on insecure energy sources; it can reduce emissions by
improving energy intensity and reducing fuel use; and it can increase access to energy services,
by reducing their effective cost.

It can be very difficult to predict or monitor the impacts of end-use energy efficiency
improvements. Energy systems and people’s behaviour are both complex and dynamic processes.
In particular, it is not always clear whether energy efficiency leads to lower energy use: since it
lowers the effective costs of energy it may also increase demand. The direct savings can be taken
up by such factors as increased comfort, more extended use of a service, or willingness to use
new services (e.g. air-conditioning did not take off as a technology until it had reached an
adequate level of efficiency). There is only a very loose correlation between energy intensity and
energy use.

 For instance, China has a strong record on energy efficiency, aided by programmes such
as those described above. During the 1990s, energy intensity halved in China and it is
significantly lower than in many countries at a similar stage of development.
Nonetheless, it is also the case that, over the same period, energy use and CO2 emissions
grew by 40% – improved energy efficiency does not guarantee declining emissions.
While the increase in emissions might have been higher in the absence of the energy
efficiency gains, this is also by no means certain.

In nearly all cases, references to emission reductions due to Energy Efficiency measures, are not
to actual reductions but to an outcome which is lower than it might otherwise have been (so that
the calculation is very dependent on the assumptions about what would have happened in the
absence of the energy efficiency programmes concerned). However, there seem to be two broad
conclusions.

1.The savings from individual programmes remain genuine, even after taking account of
increased comfort and other effects discussed above.
2.The savings are usually relative (to expectations or to a control group) – in very few cases have
actual reductions in energy use been demonstrated to result from an energy efficiency
programme.

Furthermore, even where there are savings at the programme level, they do not flow through to
an absolute reduction in energy use or emissions at the national level. For instance, a recent IEA
information document on the subject notes that, “energy efficiency efforts alone have not been
sufficient to halt growth in energy consumption or CO2 emissions in the OECD countries”, and
the conclusion would also apply outside the OECD.

The distinction is critical in relation to climate change policies. Both the Kyoto system and most
(though not all) national targets are based on absolute rather than relative targets (i.e. what
matters is whether emissions are actually lower, rather than simply lower than they might
otherwise have been). It is also, of course, the absolute level of emissions which has an impact
on the environment, not the relative level.

EE thrust areas:

Energy efficiency can be promoted in a variety of ways, from information and awareness
campaigns such as energy labeling of appliances, to higher prices.

The WEC review on energy efficiency pointed out that the best results on energy efficiency came
from the industrial sector, where market forces are strong (eg. Improved efficiencies in
automobiles). It also noted that the public transport and households were not showing such
achievements.

The building and industrial sectors, as major consumers of energy, also have significant
technical opportunities to improve energy efficiency. Advances in the design, construction and
operation of commercial and residential buildings, as well as industrial processes, provide
opportunities for major reductions in energy use. As a result, it is now feasible for many
structures to become net zero energy consumers and even energy resources. This progress has
been demonstrated in a variety of circumstances worldwide.

Electricity is a proven route to major emissions reductions and to achieving sustainably low
emissions. There are many options for decarbonising electricity – nuclear for those who find it
acceptable, but also a range of other options including cleaner fossil fuels; renewables; and in the
medium to longer-term, advanced technologies of various sorts and carbon capture and storage.
Electricity is also an important vehicle for improving energy efficiency throughout the value
chain.

Future technologies offer even more potential – in forms which may make it easier to secure
savings, e.g. Heat Pumps & LEDs, intelligent technology, end use efficiency.

Energy Conservation in India

India has made rapid strides towards economic self-reliance over the last few years. Impressive
progress has been made in the fields of industry, agriculture, communication, transport and other
sectors necessitating growing consumption of energy for developmental and economic activities.
If India is to achieve the targeted growth in GDP, it would need commensurate input of energy,
mainly commercial energy in the form of coal, oil, gas and electricity. However, India’s fossil
fuel reserves are limited. The known reserves of oil and natural gas may last hardly for 18 and 26
years respectively at the current reserves to production ratio. India has huge proven coal reserves
(84 billion tonnes), which may last for about 200 years but the increasing ash content in Indian
Coal as well as associated greenhouse gas emissions are the major concern.

Energy being an important element of the infrastructure sector has to be ensured its availability
on sustainable basis. On the other hand, the demand for energy is growing manifold and the
energy sources are becoming scarce and costlier. Among the various strategies to be evolved for
meeting energy demand, efficient use of energy and its conservation emerges out to be the least
cost option in any given strategies, apart from being environmentally benign.
The steps to create sustainable energy system begin with the wise use of resources, energy
efficiency is the mantra that leads to sustainable energy management.

Conclusion:

Energy conservation is the need of the hour. The first oil shock of 1973 shook up the
industrialized nations of the world and awakened them from the sleepy complacency of never-
ending oil flow. It made them face the stark reality of the uncertainty in oil supply restoration and
the fragility of the trade in oil. This was the time when many countries realized the urgent need
for energy conservation.

Notably, the wave of energy conservation had struck the Indian intelligentia 3 years earlier when
a Fuel Policy Committee was set up by the Government of India in 1970, which finally bore
fruits three decades hence in the form of enactment of the much awaited Energy Conservation
Act, 2001 by the Government of India.

Also, with due concerns to global warming, the world needs to develop a coherent and practical
approach to climate change. The Intergovernmental Panel on Climate Change has recently
confirmed that the evidence for global warming is unequivocal; meanwhile, the effort is under
way to develop a successor to the Kyoto Protocol and provide a roadmap towards the lower
carbon world of the future.

What is needed to be understood that economics and environment are often conflicting subjects,
and therefore, no unique set of mitigation policy measures may be universally applicable,
basically due to differences in size of population, difference in income levels, issue of lack of
access to modern energy, difference in primary energy consumption levels, difference in primary
energy mix and so on.

A few nations account for most GHG emissions, while access remains a core issue for more than
2.4 billion people, therefore, any climate change policy must focus on cooperation with
developing world to achieve sustainable progress in emissions reduction.

Energy efficiency has a big role to play in controlling emissions at least in short term and
medium term and in making emerging technologies more viable in long term.

One important point is that energy efficiencies are achievable at all stages of the energy supply
chain including, for instance, power generation, and in transmission and distribution as well as in
energy use.

It is also important that though EE measures will result in actual savings, EE may or may not
have direct correlation with reduction in energy use and direct reduction in absolute emissions.