Transcript AEEE Template - 24 Frames Digital

Mainstreaming Energy Efficiency Financing
Insights from a Solution Provider
Financing a Sustainable Low Carbon Indian Economy
Mumbai, 13 May 2010
T: +9111-43027344
E: info @ aeee.in
www.aeee.in
AEEE Mission
Alliance for an Energy Efficient Economy (AEEE) is a memberdriven industry association providing a common platform for
energy efficiency stakeholders to collaborate and align with the
Bureau of Energy Efficiency for implementing the Energy
Conservation Act, and National Mission on Enhanced Energy
Efficiency (NMEEE)
AEEE addresses barriers to EE implementation through policy
research; facilitating market transformation; fostering technology
innovations; capacity building of energy professionals and
stimulating financial investments
Vision: An Energy Efficient India
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Why AEEE ?
EE Industry: To integrate the highly fragmented EE business in India
Support Policies & Regulations: To work closely with MNRE & Nodal
Agencies, BEE & SDA’s, and Regulatory Commissions for effective
implementation of EC Act 2001, Electy Act 2003 & the NAPCC- National
Mission on Enhanced Energy Efficiency
Policy Assessment: To address cross-sectoral projects and issues &
assess the energy-impact of policies
Networking Platform: Platform to share and learn about global best
practices, enable industry benchmarking and access to CleanTech financing
& incubation programmes
Market Transformation: For partnership and co-ordination with Multilateral & Bilateral agencies for effective EE market transformation
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Highlights of 2008-10
 Policy Research and Advocacy
 Capacity building in M&V and Professional Certification
 Collaborations and Networking for EE companies with
endusers and energy intensive industries
 Support DSM programmes of Utilities
 Develop SME Expertise & Network for CleanTech & Startups
 Supporting India's Emerging ESCO Industry
 Partnerships & Cooperation with Apex Associations
 Integrating Resources and Information on Energy Efficiency
 Benchmarking EE in Indian Industry Nationally and Globally
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Industry Opportunities in
Sustainable Innovation
 CII defines benefits of Sustainable Innovation as: sustainability
for business and sustainability for the environment & society;
and the readiness for its implementation
 […] businesses, governments and donor agencies need to stop
thinking of the poor as victims, and instead start seeing them as
resilient and creative entrepreneurs, as well as value-demanding
consumers - CK Prahalad, The Fortune at the Bottom of the Pyramid
 Corporate Social Responsibility is now going beyond Serving the
Society, to emerging as a source of opportunity, innovation, and
competitive advantage for businisses
 Shift from Risk-Cost to Opportunity-Profit: FMCG products to
the poor, community-based waste management, and solar-based
LED lighting options, etc
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Need New Business Models in
Sustainable Innovations
 Companies have to recognize sustainability as a driver rather
than a barrier for innovation
 Focus on environmental consequences of business decisions
 Socio-economic-environmental impacts on businesses a twoedged sword:
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Climate Change threats, Resource Depletion, Population pressure
Expanding middle class and increasing demand for goods & services
 Re-orienting decision-making: Upfront Cost vs. Lifetime Cost
 Need for Cleaner Methods and Materials in Indian businesses:
India's retail market is expected to almost double from US$ 330
billion in 2007 to US$ 637 billion in 2015
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Energy Efficiency: Least Expensive &
Fastest way to Reduce GHG Emissions
 India's Energy Deficiency: Peak
Power Deficit: 11.6%
 Loss of GDP from lack of access
and availability of electricity
 “Govt of India’s ambitious target
of electrifying entire country by
2012, is likely to be delayed
because only half the proposed
new capacity has been added
during the three consecutive 5-Yr
Plans between 1992 and 2007”
 Energy Conservation Act 2001,
One unit of Energy saved at Consumer End
avoids 2.5 to 3 times Capacity Addition
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aims to reduce India’s energy
intensity
Financing EE Transition:
Integrate EE in all Sectors
“Mainstreaming energy efficiency in investment operations by systematically
integrating energy efficiency operations within the core energy practice by
replicating the business-as-usual and proven energy sector project designs
and instruments” - WB EE Action Plan for Sustainable Development (2007)
R&D+
Innovations
CleanTech
Startups
EE Equipment
Mfrs & Vendors
ESCOs & Consultants
General Industry
(End-Users)
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Financing approach
EE Policies & Regulations
Incentivise for EE implementation
Grants & Funding to support
Innovations
Increase access to EE financing
by ESCOs in PC mode
Support & Guide VCs & Startups
SMEs in India - Need for role change
Victims to Entrepreneurs
 SMEs constitute 80% of industrial enterprises in India
–
3 million SMEs
 One of the biggest employment-providers
 SMEs highly vulnerable to global competition, fluctuation
in price and input costs
 Huge potential for EE – and wide variations in present
efficiencies – highly diverse and dispersed
 SMEs lag behind larger Indian industry benchmarks in
productivity, technology upgrading & energy efficiency
 SMEs have low priority for EE due to lack of awareness &
capacity (skills) to adopt EE methods & technologies
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Financial Barriers for
Energy Efficiency in SMEs
 Over 20 years national and international institutional interventions thru
EE programmes in SMEs (banks, bilateral agencies & research
organizations, including 3CEE Project)
 Financing still a constraint for smaller enterprises
 Low presence of domestic financial institutions in ESCO financing,
especially in SMEs
 Need for greater accountability of measured data on energy
performance of industrial operations and processes
 Lack of incentives for SMEs to monitor & take up EE measures
 Lack of interest from the industry in implementing capital intensive
measures
 Trust issues relating to service providers: Energy Auditors/ ESCOs,
and absence of champions and strategic partners
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State of EE Financing for SMEs
(USAID-ECO-III Study)
 Low & medium investment projects, having payback of less than 1 year
are normally implemented from internal accruals
 Medium to large investment projects normally implemented as part of
modernization or expansion programme thru debt financing
 There are several existing sector-specific credit lines – Information on
such schemes known only at cluster level (Bank HO) since they are
operated through Nationalized Banks
 Asymmetry associated with reporting production and hence energy usage
 Preference and comfort in relationship with existing banks (working capital
lenders)
 Decision for obtaining debt financing is based on the scale of investment
and importance to main production operations
 Loan review and servicing process are not consistent and scalable
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Recommendations & Solutions
(USAID ECO-III Study)
 Financial Products & EE Solutions to be customized to the
client and industry; products to be built around existing ones
used for SMEs
 Need for high level of awareness on possible areas and
opportunities for energy cost reduction
 Need to dovetail EE financing with existing financing schemes,
which have a better reach at the cluster level
 Role of SME associations to unify & empower SMEs
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To realize & support BEE’s Agenda for Energy Efficiency in SMEs
by accelerating adoption of energy efficient technology and
practices
Create centers of excellence for updated information on case
studies, testing facilities and costs of inputs and end-products
© 2010 Copyright Alliance for an Energy Efficient Economy
Role of AEEE
 Strengthen ESCO business model through M&V (IPMVP & IEEFP)
 AEEE aims to engage with Fis and Banks to examine Inttl Energy
Efficiency Financing Protocol and its relevance and application to
Indian industry
 Platform to raise the level of SME dialogue with Banks / Financial
Institutions
 Facilitate EE companies (Vendors/Manufacturers) to work with SMEs,
through cluster approach & cross-cutting technologies
 Provide information services for SMEs and facilitate dialogue with other
stakeholders (BEE, other policy making bodies)
 For partnership & co-ordination with Multi-lateral & Bilateral agencies
for effective tapping of programmes and financial opportunities
 Forum for global best practices, enable industry benchmarking and
create opportunities for energy efficiency market
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AEEE Concept of
Energy Auditors Expertise
Energy Efficiency: “From Boiler Room to Board Room”
Create a pool of skilled and competent Energy Auditors & M&V
professionals
Level 1 - Energy Audit – Certified Energy Auditors / Managers
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Identifies opportunities, does not achieve Energy Efficiency per se
Level 2 - Investment Grade Audits & develops projects/ DPRs that can
attract Banks/ Institutional funding
Level 3 – Certified M&V Professional (CMVP)
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Use reliable, International M&V protocols to COMPUTE energy savings
Expertise in EE Financing to ensure/ keep track of payback – by
means of IEEFP (International EE Financing Protocol)
Level 4 – Carbon Accounting – Carbon Reduction Manager
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M&V Capacity Building
Support ESCO business and enhance success rate of EE
project: M&V and IPMVP Protocol
 Address the Risk factors in Energy Saving Performance Contracts
 Affiliation with Efficiency Valuation Organization (EVO)
 AEEE Member companies ready to share experiences of Energy Audits,
Metering and Monitoring projects
 AEEE leveraged USAID/ECO-III project funding & support for M&V
Certification & Training programme
IPMVP Trainings and Certification Exam in India
 M&V Fundamentals trainings in Delhi, Mumbai and Bangalore
 CMVP Certification training and exam in Delhi Nov’09
 First time in India: Certified 8 CMVPs – of 700 CMVPs globally
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Thank you
SEE-Tech
TIDE
Technocrats
BEBLEC
Alternative Futures
Cosmos Ignite
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CMAI