GEF finances Power Ministry to promote energy efficiency among SMEs

New Delhi, Jan 27 (KNN) With the primary objective of reducing energy intensity of the Indian economy, the Ministry of Power has received financing from the Global Environment Facility (GEF) to promote energy efficiency at the small and medium enterprises in India and appoint agencies for supporting the policy development and implementation of the programme.

“To bridge the efficiency gaps in the various units within the same sub-sector, there is need to identify general and specific energy saving measures to facilitate the industries in their faster implementation in their respective plants. However the need for developing information and projects is much more in SME sector which usually cannot obtain or source the information needed with regard to energy efficiency,” said a notification.

The large number of SMEs like foundries, brass, textiles, refractories, brick, ceramics, glass, utensils, rice mills, and other manufacturing units etc, are said to have large potential for energy savings. Many of these units are in clusters located in various states of the countries.

“In quantitative terms, there is not much authentic information and data available with respect to their energy consumption and energy saving opportunities.  Majority of SMEs are typically run by entrepreneurs who are leanly staffed with trained technical and managerial persons to deploy and capture energy efficiency practice to reduce manufacturing cost and increase competitive edge,” the notification added.

Therefore, it will be useful to build their energy efficiency awareness by funding/subsidizing need based studies in large number units in the SMEs and giving energy conservation recommendations including technology up-gradation opportunities.

 “The Bureau of Energy efficiency (BEE) is intending to hire and appoint five agencies for supporting the policy development and implementation of BEE’s National Programme for energy efficiency in small and medium enterprises in India,” the notification said.

BEE, a statutory body under the Ministry of Power has received financing from the GEF towards the promotion of energy efficiency at MSMEs, and intends to apply a part of the proceeds for consultant services, the notification added.

The project “Financing Energy Efficiency at MSMEs” for Energy Efficiency in India, and is being jointly executed by BEE and Small Industries Development Bank (SIDBI).

In this context, BEE seeks bids from consultants who would be responsible for identifying 20 SME units and 20 EE technologies with highest energy saving and replication potential in sector assigned.

The agencies will do so in consultation with relevant, cluster association, and the SDA. It shall be mandatory for agency to seek the consent of unit owners in writing, prior to recommending name of the unit to BEE for implementation of technology demonstration in a unit and seek release of subsidy to the unit in future.

The agency would also be required to produce a letter of support from the relevant sector or cluster association along with a proposal.  BEE will enter into a contract with the individual units which are recommended by the cluster association of the cluster before implementation of the technologies.

The mission of BEE is to develop policy and strategies with a thrust on self-regulation and market principles, within the overall framework of the Energy Conservation Act (EC Act), 2001.

The Census of MoMSME (2006 – 07) reveals that there are 26.1 million MSME units in India out of which 7.3 million are the manufacturing units and 18.8 million are service enterprises.

Most of the enterprises are micro (95 per cent) and small (4.7 per cent) whereas medium MSMEs represent 0.3 per cent of the total number of units. The Indian industries consumed about 202 mtoe (million tons of oil equivalent) in which it is estimated that MSMEs sector consumes about 50.5 mtoe (2009), which is about 25 per cent of the energy consumption in industrial sector in the country.

The manufacturing SMEs units are spread in all over India in the form of clusters. There are more than 400 manufacturing clusters in which about 12 energy-intensive product categories are made in about 180 clusters.

These energy intensive enterprises consume about 22.7 mtoe which is about 45 per cent of the total energy consumption in the SME sectors; they also offer maximum potential for energy conservation.

It is envisaged that such interventions supported by diagnostic studies and pilot projects at cluster level focusing on energy/resource efficiency, energy conservation and technology up gradation would help in addressing the cluster specific problems and enhancing energy efficiency in SMEs, added the notification