EESL – Using Innovative Business Models to Scale up EE investments

Energy Efficiency Services Limited(A JV company of PSUs of Ministry of Power, Govt of India)

20th April, 2015, Bangkok

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Rising demand for refrigerants AP RegionRising demand for refrigerants AP Region

Demand Forecast for Refrigerants

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Years 2005-2020

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Actual Growth

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HFCs use growing at 8% per annum (2004-2008)-GHG emissions could be upto 19% of total GHG emissions in 2050 in BAU – from 1%

Annual emission could be 8.8Gt CO-eq by 2050

India – AC penetration about 4% - annual demand is about 3.5m

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Barriers for no-ODS low-GWP Barriers for no-ODS low-GWP Technologies Technologies

Low demand –though technology exists

High cost as compared to existing HVAC using HFCs of HCFC

Inadequate information about refrigerants – energy use awareness significant in several countries

Issues related to toxicity/ inflammability a concern

Case Study – No-ODS HC Based AC

-Commercially available in India 1.5 Ton

-Energy efficiency more than 3.9 EER – best in class (5 STAR)

-Cost Rs. 45,000 ($ 750) – about $ 100 more than other HFC based 5 STAR AC

-EESL business model could help scale up demand for such ACs

-Attract other manufacturers to invest in this technology

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EESL – Replicable and Scalable Business Models

-Third party investments in efficient equipments by EESL

-Aggregating demand to bring economies of scale – drive down costs to make efficiency affordable

- Risk mitigation – technical risk through back to back arrangement with suppliers.

-Financial risk – BG, ESCROW and Revolving LCs – Approval by ERCs for bulb and agriculture programme (part of ARR) and state govt guarantee for Street Lights

-Awareness and outreach in project areas

-Ongoing investments in lighting EE of about $ 1.3 billion

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EESL – Business Model - Addressing Barriers

-First high cost barrier – providing LEDs at $ cents 1.3-Monetise energy savings to pay for upfront investment ($ 5/ LED)-Aggregating demand – reduced prices of LEDs – from $ 6 to $ 1.3

No of incandescent bulbs replaced in AP

4.1 m

Annual energy savings 229 million KWhGHG emission reductions 226,710 tCO2

Reduction of installed load 217 MWActual capital investment Rs. 80 crore ($ 14m)Cost savings to DISCOM every year for reduced peak power

Rs. 112 crore ($ 18.7m)

Annual payments to EESL Rs. 30 crore ($ 5m)

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Moving towards market transformation

LED prices reducing by aggregating demandParticipating entities have increased

Thank You

For more information contactskumar@eesl.co.in

www.eesl.co.in

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