IAEEL newsletter 3-4/97
Commercial Lighting in India: The Need for Transformation
Commercial Lighting in India: The Need for Transformation
Energy efficiency is of paramount importance for India, where a population of more than 975 million people, rapid increases in urbanization and manufacturing capacity, and the emergence of a new middle class have driven an explosive increase in energy consumption. Guest writer Monik Mehra takes a look at how Indiašs commercial lighting market could be transformed.
In 1995, India had 89 000 MW of installed power with a production of ~320 terawatt hours. It has been estimated that 17% of the electricity produced is used for lighting systems which is typical for many developing countries. Power quality is rather poor in India: Interruptions, planned and unplanned, are common. Line voltage variation often exceeds 30%, and spikes and surges occur frequently. Under peak-load conditions, the nominal 220-V voltage may drop to as low as 160 V, whereas on weekends, holidays and at night the voltage may rise to 280 V.
Low system voltage and the tripping of the power circuits, resulting in blackouts and brownouts, are commonplace. Power shortages of up to 10% can occur during summer evening peak hours which can lead to an acute electricity shortage (up to 30%) in some cities. In fact, current trends in power supply and demand portend a future which is not too bright both metaphorically and literally speaking.
The need for power has also been fueled by growth in the manufacturing and commercial sectors. This growth can be attributed to the economic liberalization characterizing the last five years, during which period the Indian economy has undergone profound structural changes. This industrial and economic boom has increased investments from both Indian and non-Indian enterprises, and industrial output is anticipated to grow at a rate of as much as 1015% annually over the next five years, while gross domestic product is increasing at a rate of 3% to 5% annually.
COMMERCIAL LIGHTING MARKET
Lighting accounts for 60% of the total electricity consumption of commercial establishments, while the lighting share in households and industrial applications is ~28% and ~9% respectively, according to a USAID study.
Technological developments in the area of lighting products has not progressed as far as it has in developed countries. Many of the components used for energy efficient technologies are still imported. In the early 1990s, imported CFLs were taxed at a rate of 225%, the result of which was that each lamp cost more than the average household's monthly income. In connection with the economic liberalization, the import duty has been steadily reduced, from 225% to 110% to 50% and now to 40% (for 199798). Domestic production can reduce the cost of the final product and, as with imported components with lower import duties, the resulting lower prices of the more efficient devices can stimulate their subsequent adoption.
Some energy-efficient lighting equipment, like electronic ballasts for fluorescent lamps and CFLs, have been dogged with quality and reliability problems. There are two reasons for this: First, the components used were of inferior quality or design. Second, the ballasts and lamp designs were imported from Europe and were, consequently, not properly designed for the variable power characteristics of the Indian electrical system. As a result, customers have been hesitant to buy these products. Customer confidence could be increased by introducing systems more tailored to the Indian situation as proposed, for instance, by the National Physical Laboratory in New Delhi.
IMPLEMENTATION IS DIFFICULT
Energy-efficient lighting programs from North America and Europe could serve as examples for India. However, due to economic, social, and educational differences the policy instruments cannot simply be transferred from developed countries in the West. Rather, the policies must first be modified to suit India´s laws, culture and customs, technological infrastructure and so on.
In India, the most basic information and statistics on lighting energy use are often unavailable. Furthermore, energy efficiency standards and guidelines are not adhered to. One way to support implementation of efficient lighting systems would be to make information from an independent source available. The US National Lighting Product Information Program could serve as an appropriate model.
Information transfer and training would also help overcome the problems. To this end, Memorandums of Understanding between the Indian Society of Lighting Engineers and other international institutions have been established.
An interesting example is how the US Environmental Protection Agency´s Green Lights Program has served as inspiration for a Chinese Green Lights program. In that program, western institutions are helping to provide training for Chinese experts regarding efficiency, quality management in the lighting industry, standards, etc. In India, seminars, in-house workshops and mobile "demonstration kits" could be used to educate customers. Training seminars for selected utility representatives would also be useful.
However, while Western industrialized countries attract much attention, Indiašs close neighbors are often forgotten. Many South Asian and South East Asian countries share similar problems. Several interesting case studies of South East Asian energy efficiency projects in, for example Thailand and Korea are of great interest for India.
EFFICIENCY STANDARDS AND PROTOCOLS
If the pace of development of economically and socially desirable investments in the marketplace is too slow, strict regulations, protocols, and legislative acts can be passed (like the 1992 Energy Policy Act in the USA). Presently, efficiency standards for appliances are being developed by the Bureau of Indian Standards (BIS) but they are not tied to regulation. For example, there are no checking procedures required prior to awarding a building completion certificate. Codes similar in nature to the US ASHRAE-IES would provide a simplified performance-based standard offering flexibility to designers. Also, statuary regulations, like a National Energy Code, would make it essential for specifiers to consider energy-efficient lighting.
Regulations should be developed to promote the phasing out of standard incandescent lamps, replacing them with energy-efficient incandescent lamps or CFLs, and to expand production of CFLs and T8 fluorescent lamps.
KEY ROLE FOR ELECTRIC UTILITIES
Today, a vast majority of the nation's generating capacity is owned and operated by utilities under the control of central and state governments. Most utilities have not been involved in promoting energy efficiency through incentives such as consumer rebates or other means of financing end-use efficiency.
A major restructuring is on the way in response to strict guidelines laid out by financial institutions like the World Bank. Premier international lending institutions have seen the advantage of demand-side management (DSM) in the developed world and have initiated steps that encourage utilities to integrate DSM strategies into their operations. Electricity prices, which have increased over the last decade, will be reviewed periodically to ensure that they reflect the current costs of generation and transmission.
However, despite higher electricity prices, customers are unwilling to invest in an initially costly technology that is profitable only in the long run. Obtaining loans could be difficult for commercial customers, and in India the idea of renovating and upgrading lighting systems has not yet taken hold. By using innovative methods of electrical utility financing (e.g. lease-to-own and performance contracting), this barrier could be reduced.
Stringent, well-defined performance and power quality specifications could be developed for qualifying projects (i.e. modular, electronically ballasted). This would be followed by a standardized bidding process that would encourage lighting manufacturers to supplement the utility rebate with their own discount.
This leasing role can be tied to already existing relationships between the utility and its customers through the sale and supply of electricity. For instance, the monthly or quarterly lease amount could be recovered from the customers through the electricity bills sent by the utilities. In fact, such plans have been proposed and developed for India; however, they have never been realized. One major reason why a large CFL project was stopped in Bombay in 1993 was that only one foreign manufacturer could supply high-quality CFLs to the project (See IAEEL newsletter 2/93). Since then, India has changed a lot. Today´s situation, with several suppliers of high quality products and the changed utility environment, should make it possible to reconsider this and other similar DSM projects.
INDIA: FUTURE GIANT MARKET
Investments in energy-efficient lighting are typically cost-effective, compared with investments in power supply, and can help India to reduce the gap between future demand and supply. India is a huge market for international companies interested in producing more efficient technology for lamps, luminaires, and lighting controls. Efficiency standards for products coupled with education and adequate economic incentives and financing mechanisms should facilitate the large-scale introduction and acceptance of energy-efficient lighting in our country.
Monik Mehra
Applications Specialist
Lighting Services Inc. (LSI)
Tel: +1 914 942 2800
E-mail: ltgsvcsapp@aol.com