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The Indian Energy Efficiency Market
Opportunities and Strategies for AustralianCompanies
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Australia Unlimited
INDIA – a major global economy
US$ 1.7Trillion
economy
11th largestglobal
economy,poised to be
the 3rd largestby 2030
Australia’s 3rd largest and
fastestgrowing trade
partner
Home to anumber of the
world’sleading
corporates
Rapidlyexpandingdomestic
market of 1.2billion people
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Clean Tech Market Snapshot
The Indian market for Low Carbon & Environmental Goods & Services over
the next decade is valued at US $310 billion (UKTI 2011)
World’s fourth largest clean tech opportunity (US, China and Japan) with a
6% share of the global market (EY 2011)
The projected market potential for green building material and technologies
is estimated to be US $100 billion (Green Building Association 2012) In 2012 Energy Efficiency is estimated to be a US$ 16 billion opportunity,
and the Bureau of Energy Efficiency forecasts expenditure of $148 billionthroughout the next decade.
The water and wastewater market was valued at $4 billion in 2011, and is
growing at a rate of 10-12% every year (TERI)
Over 160,000 MT of municipal solid waste is generated daily, driven byrapid urbanisation, with 500m people projected to move from ruralcommunities to cities by 2020.
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Key Market Drivers
Energy security and water scarcity are national priorities Water and waste management challenges due to rapid industrial
growth and urbanization
Abundance of untapped renewable energy resources such as solar,wind, biomass and water
Escalating costs of conventional energy sources with depleting fossilfuel reserves
Supportive government policies
Increased investments by global corporations to reduce climatechange risks and pursue new products/service opportunities
A$ 1 trillion investment in infrastructure - 2012 to 2017
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Sectors with Momentum
Energy Efficiency at plant and building level
Water and waste water management, particularly biological treatment
Smart grid technologies and distributed power generation
Environmental goods and services
Waste management
Green building products and services
Clean coal technologies
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Energy Efficiency - AttractiveBusiness Opportunities in India
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We intend to cover…
► Increasing Investment in Energy Efficiency in India
► Driving Forces for Increasing Energy Efficiency in India
► Market Transformation towards Enhanced Energy Efficiency
Building Sector
Industries
► Business Implications & Opportunities
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Increasing Investment in Energy Efficiency in India
New entry - Indian EE business
► In 2009, Schneider Electric, acquiredBangalore-based Conzerv Systems, anINR 700 million company providing energyefficiency solutions in the Indian market.
No transaction details were disclosed.[1]
► In December 2009, the global energyservices major Dalkia acquires Indianpremier energy services company, DSCLESCO for an undisclosed amount. [2]
► Indian IT giant Wipro invested in energyefficiency and clean tech market by startingWipro Eco-energy.
EE business volume in India
► Century cement India has given ABB anorder worth around USD 18 million toincrease productivity and energy efficiency.[3]
► TERI and Dalkia Energy won contractsfrom SIDBI for providing energy efficiencyadvisory solutions for MSME sector in fiveidentified cluster. Maximum project value ofabout USD 4.5 millions.
Indian energy efficiency market evolved rapidly over the last 5 years due to governmentinitiatives and investment from large players (domestic and global). Few cases are as
below:
[1] http://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/on
[2] http://www.aeee.in/node/44
[3] http://www.abb.com/cawp/seitp202/1e92ba88d982559585257a5900492539.aspx
http://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.aeee.in/node/44http://www.abb.com/cawp/seitp202/1e92ba88d982559585257a5900492539.aspxhttp://www.abb.com/cawp/seitp202/1e92ba88d982559585257a5900492539.aspxhttp://www.aeee.in/node/44http://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/onhttp://www.business-standard.com/india/news/schneider-electric-acquires-conzerv-systems/63762/on
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Climate change – the globalresponse
Driving Forces for Energy
Efficiency in India
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Drivers of Growth of Enhanced Energy Efficiency inIndia
Competitive
Advantage
EnergyDemand
Sustainability
ClimateChange
Regulatory
Driving EnergyEfficiency
Over the last 20 years, primary energyconsumption in India has increased
from 1.02 x 108 MTOE per year to 6.15x 108 MTOE per year
Source: US Energy Information Administration
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Energy Efficiency – Integral to India’s Climate ChangeResponsibilities
Energy Conservation
Act, 2001,Amendment 2010
Electricity Act, 2003
NMEEE (National
Mission onEnhanced EnergyEfficiency)
Building Energy Efficiency Designated Consumers (DC) &
Industries Energy Efficiency Audits & ESCO Labeling of Appliances
Demand Side Management (DSM) Smart Grid Open Access
Perform, Achieve and Trade (PAT) Market Transformation on Energy
Efficiency (MTEE) Financing for Energy Efficiency Power Sector Technology Strategy Low energy design concepts
Energy ConservationBuilding Code
(ECBC)
Minimum energy efficiency standards forcommercial buildings
Encourages energy efficient buildings/retrofit of buildings
Energy performance of buildings Energy efficient construction
Achieve 20-25%reduction of GHGIntensity by 2020
(Voluntary)
EnergyEfficiency
Objective – LowCarbon Growth
Carbon tax
Internal targetunder NAMA andother regulations
National Mission onSustainable Habitat
(NMSH)
Emphasizes the greater use of publictransport and non-motorized modes oftravel.
Sustainable urban infrastructure
National UrbanTransport Policy
2006
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Few Financial Schemes – Strengthening EnergyEfficiency Market in India
SIDBI (Small Industries
Development Bank ofIndia)
MoMSME (Ministry ofSmall Scale Industries)
IREDA (Indian RenewableEnergy Development
Agency) Grants
Petroleum ConservationResearch Association
(PCRA)
Industrial DevelopmentBank of India
(IDBI)
SIDBI and BEE are working as co-implementing agencies for preparing a World-Bank fundedproject titled “Financing energy efficiency at MSMEs”
SIDBI Financial Scheme for energy saving projects in MSME sector under JICA (JapanInternational Corporation Agency) Line of Credit
Scheme for energy savings projects- Nationalized banks
Credit linked capital Subsidy scheme (CLCSS)
Incentives offered by state/ central governments80% depreciation in the first year on the specified energy efficiency equipment andconcessional excise and customs duty on notified energy conservation equipment to promoteenergy efficiency
Concessions/ Rebates and Special Provisions from IREDA
Energy Audit Subsidy Scheme for setting up of Energy Audit Centre/ upgrading energy auditing facilities
Energy Audit Subsidy Scheme Equipment Finance
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Climate change – the globalresponse
Market Transformation towards Energy
Efficiency
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Railway, 2% Public Lighting,
1%
Industry, 46%
Commercial, 8%
Domestic, 21%
Miscellaneous,
2%
Public Water
Works & Sewage
Pumping, 2% Agriculture, 18%
Energy Consumption in India – Sector wise
Industry (46%) is currently thelargest energy consuming sector
Commercial building segmentconsumes around 8% of totalenergy consumption
Potential Energy Savingsin Industrial Sector is
around 6.99%
Potential Energy Savings
of up to 30-50% inIndia’s commercial
sector
EnergySaving
Opportunities
Aggregate Investment Potential in EnergyEfficiency Sector in India amounts to
USD 9.8 Billion (Source: WRI Report, 2008)
Source: BEE, 2009
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Energy Efficient Opportunities in DCsNational Targets of Energy Savings
Opportunities for Energy Savings
► Primary Aluminium - Alumina Refining,Aluminium Smelting
► Secondary Aluminium - Primary heating,Electric Motors, Pumping Systems
Aluminium
Cement Opportunities for Energy Savings► Grid & Power Management
► Power from waste heat recovery
► Use of alternate fuels
Power(Thermal)
Opportunities for Energy Savings
► Air and flue gas cycle
► Steam, feed water and condensate cycle
► Fuel and ash cycle
► Electrical & Lighting system
► ECW & ACW System
► Compressed air and HVAC system
Opportunities for Energy Savings
► Fuel Switch
► Cogeneration & Renewable energy
► Improved products and services
Fertilizers
Reported energyconsumption (MMTOE)
Apportioned expectedenergy reduction
(MMTOE)
7.73
0.455
Reported energyconsumption (MMTOE)
Apportioned expectedenergy reduction
(MMTOE)
11.87
0.698
Reported energyconsumption (MMTOE)
Apportioned expectedenergy reduction
(MMTOE)
101.14
3.10
Reported energyconsumption (MMTOE)
Apportioned expectedenergy reduction
(MMTOE)
7.86
0.462
Source: BEE, India
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Energy Efficient Opportunities in DCsNational Targets of Energy Savings
Source: BEE, India
Opportunities for Energy Savings
► Chemical recovery and cogeneration units► Capacity utilization & technology
► Waste heat recovery facilities
Paper & Pulp
Textile Opportunities for Energy Savings► Spinning
► Weaving
► Wet processing
Chlor-Alkali Opportunities for Energy Savings► Switch from Mercury Cell to
Membrane Cell Technology
► Improved Products and Services
Opportunities for Energy Savings
► Smelting reduction
► Top gas recycling blast furnace
► Use of charcoal and waste plastic
► Molten oxide analysis
► Waste energy recovery
► Coke dry quenching
► Advanced wet quenching
Iron & Steel
Reported energyconsumption (MMTOE)
Apportioned expectedenergy reduction
(MMTOE)
2.09
0.123
Reported energyconsumption (MMTOE)
Apportioned expectedenergy reduction
(MMTOE)
1.62
0.095
Reported energyconsumption (MMTOE)
Apportioned expectedenergy reduction
(MMTOE)
0.84
0.049
Reported energyconsumption (MMTOE)
Apportioned expectedenergy reduction
(MMTOE)
28
1.647
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Energy Efficient Opportunities in Commercial BuildingSector
Lighting Systems & Control
Construction Materials, Building Facades,Paints, Insulation
Heating, Ventilation & Air Conditioning(HVAC)
Building Design & Planning
Energy efficient building managementsystem (eBMS)
Building Energy Audits
OpportunitiesIdentified forEnergy Efficiency
in Buildings
Electrical energy consumption – 46,685 GWh (2007-08)
Source: General Review 2009, Central Electricity Authority
Electrical energy saving potential throughenergy efficiency: 1.92 Billion kWh (2007-08)
Energy Benchmarking
Heating
Ventilation & Air
Conditioning
(HVAC), 55
Lighting, 25
Internal Loads,
15
Others, 5
Energy consumption distribution incommercial buildings, BEE
For Building with electricity demand >500kW.Total Energy Consumption: 9.92 Billion kWh(2007-08)
Source: National Productivity Council (NPC)
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Business Implications of Energy Efficiency in IndianMarket
Energy efficiency has introduced many new businessimplications
► New business challenges – addressing cap and trade
(PAT compliance) costs, calculating value at stake,assessing strategic risks
► New market opportunities – transforming businessprocesses, changing buying patterns for procurement andconsumers – focus on energy efficiency, creating newmarkets and industries through innovation
► New regulatory environment – addressing recent andanticipated regulations and policies, reassessing directors’
responsibilities
► New risks – managing new risks: the threat of climatechange, was ranked as the number 4 business risk in theErnst & Young 2009 business risk report
► New technology – smart grid, cleantech, carbon captureand storage, and others
Energy efficiency is an issue withdirect economic implications that willtransform business
New risksNew regulatory
environment
New marketopportunities
New businesschallenges
Newtechnology
Energy
efficiency
Among sustainability issues, energy efficiency has been driven to the top of the business agenda due to itsimpact on business performance
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Opportunities for Australian Companies in Indian Market
Mapping technology/ solutions offered
by Australian companies against
Indian energy efficiency market
Non-ferrous metals(Aluminium)
Smart Grid
Energy performancecontracting (EPC)
Energy efficiency andenergy management
solutions
Opportunities in Indian energy efficiency market estimated at 148 Billion USD
* Estimated in NMEEE
The Indian energy efficiency market creates significant business andinvestment opportunities for the Australian companies
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Opportunities-Energy Efficiency and Energy Management Solutions
Avenues of energy efficiency
Defining energy reduction goals Developing energy strategy Base-lining, benchmarking, formulation of action
plan Setting appropriate reduction targets Energy audits Energy data analysis Identification, evaluation and development of EE
opportunities, including business case, design,manufacture, implementation, commissioning andmonitoring
Market potential in India
The end use energy efficiency potential in industry and building sector aloneis of the order of INR 100 Billion and INR 20 Billion per year respectively*
Projected market potential for energy efficiency in India reported by differentorganizations like BEE, USAID, WRI, GIZ indicate encouraging growth trendfor energy efficiency
Energy audits in several sectors indicates energy saving potential of 23%-
46% in end uses such as lighting, cooling, ventilation, refrigeration etc
OpportunitiesMajor players in India
Honeywell Emerson Climate Technologies KLG Systel HCL TCS
Accelerating economic development has prompted India’s energy demand to
double by 2030 due to which there is a critical need for energy efficiency The opportunities available in the mid cap segment may be initially explored
by Australian firms because it is fast growing and has limited in-house corecompetence in energy efficiency
Attractive opportunity for Australian companies to participate in state-supported initiatives in India (in programs funded by the Indian Governmentor international funding agencies like UNDP, GEFA, DIFID, JICA, GIZ etc)
* Electricity Demand Side Management (DSM) in India, USAID, India
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Opportunities-Smart Grid
Avenues of energy efficiency
Networking platforms enabling conversion ofelectronic devices into smart devices
Back-end smart-grid management software Home area networking (HAN) devices and
systems Networked solutions for distributed generation and
street lighting
Market potential in India
The market in India today is at a nascent stage. However, it is estimated thatthe country will install 130 Million smart meters by 2021
The current smart- grid market in India is estimated to be 1.1 Billion USDwith a 16.3% CAGR forecast between 2011 and 2015*
Market entry strategyMajor players in India
HCL Infosystems Echeleon Corporation
CISCO General Electric Telvent Siemens IBM Capgemini
Implementation of smart grids projects in India is currently at pilot phase toevaluate best possible frameworks and business models
Though Indian utility companies understand the benefit of smart grid, thepoor financial strength of the DISCOMs and other socio economicalconditions posts challenges in the implementation of smart grid in India
This market segment may be driven in near future through Governmentinitiatives; hence Interested partners for Smart Grid may join India SmartGrid Forum to remain updated about future plans and policy initiatives
*Per market insights cited by CMR India, Energy & Utilities Practice, January 2012 and Global Smart Grid Federation,
October 2011.
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Favoring Growth of Australian Companies in IndianEnergy Efficiency Market…
Population growth andeconomic development in
India will increase thedemand of new technologies
in India
Analysis of Australian company energy efficiency offerings suggests that there is a huge growthopportunity in the Indian market by collaborating with local players/ government in India
Global commitments of energyreduction targets is increasingthe policy intervention in India
Utilities are playing a key rolein deployment of energyefficiency programmes
favoring possibility of tie-upswith the utilities
In India, DCs account for 25%of the GDP and 45% of thecommercial energy. Withincreasing governmentintervention, technology
change would happen at afaster rate driving technology
up gradation
70% of buildings are yet to bedeveloped till 2030 displaying
a crucial need of energyefficient technologies and
products and energy servicecontracts
Energy efficiency- ‘Akey selling point’
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Climate change – the globalresponse
Thank You
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India: Suggested Market Entry Approaches
• Tapping large corporates for niche product offerings in EnergyEfficiency, Environmental management solutions, Waste Water
solutions
• Local manufacturing in a JV - the most appealing way to seize
market opportunities
• Technology Transfer (Licensing) or project specific technology
provider
• Exporting through local distributor- suitable for specific niche
products and services not available locally or available in
insufficient supply
• Targeting Multilateral agencies' (UNDP, IFC, World Bank, ADB)
projects
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Tips on Doing Business in India
• 28 States with different business practices, regulations, opportunities,
languages and culture• India is a highly competitive market
– a priority for leading companies from across the world
• Research and due diligence are critical
– shop around and do your homework before entering into agreements• Know your strengths and focus on key opportunities
– The size and scale of business potential can be overwhelming
• Indian bureaucracy is legendary
– Be prepared for longer time frames for decisions and success
• Relationships are key
– budget for regular travel, training and ongoing business development
– does your potential partner have the right connections to succeed?
• Leverage Austrade’s networks and expertise
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Live Commercial Opportunities from India
Water and waste water:
• Doshion Ltd - seeking technology partnership for water distribution businesscomprising of source intake facility, transmission networks, treatment, technology,distribution, waste treatment, recycle, reuse and Zero Liquid Discharge (ZLD)
Energy efficiency:• Waaree Energies Pvt Ltd - seeking solar technologies such as solar thermal, water
heating, solar water purification and desalination units• Mamata Energy - seeking technology tie-up in solar concentrators, thermal power
generation and hot water systemsEnvironmental management / monitoring and control:• Uniphos Environtronic Pvt Ltd - seeking air quality monitoring systems and water
COD and BOD monitoring systems• Terracon Ecotech Pvt Ltd - seeking consultancy service in the area of ecological and
mining restoration
Waste management:• Shapoorji Pallonji - Seeking technology provider for JV in solid waste treatment forconverting municipal waste to diesel
Vocational training in Cleantech:• Tata Quality Management System - seeking courses in the area of climate change
capacity building for the group companies such as Tata Motors, Tata Steel, TataChemicals etc.
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Successful Australian companies in India
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Austrades’ Market Activities-Potential Lauchpad
Oct 12
• Energy Efficiency workshops in India to potential customers to showcase Australia capability – looking for Australian industry speakers
Oct 12 through to March 2013
• Clean technology, energy efficiency and green building missions to Indiaorganised by State Governments
Nov 12
• Australian Innovation Forum
May 13
• Indian Government mission to Oz Water, Australia
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Indian network
Kylie BellTrade and Investment Commissioner
Malini Dutt
Vijay Kumar
Ramakrishna Dastrala
Jinendra Khara
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Sectoral
opportunities
Contact us for assistance:
Vijay Kumar Austrade, New Delhi (India)T: +91 11 4575 6226E: [email protected]
Malini Dutt Austrade, Mumbai (India)T: +91 22 6116 7133E: [email protected]
Kylie Bell
Austrade, Mumbai (India)T: +91 22 6116 7117E: [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]