Energy Management Trends in Indian Industry

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Energy Management Trends in Indian Industry

Market Brief

Market Brief Energy Management Trends in Indian Industry: 2014 [JUNE 2015]

POWERED BY

Research, Market Intelligence & Interventions Team Sustainability Outlook

[email protected]

Image Courtesy: Devian Art


Sustainability Outlook carried out extensive industry-wide surveys and interviews amongst various stakeholders to uncover latest Energy

Management Trends by Indian Industries. These included:

Detailed survey and interviews with 85 leading Indian corporates

In depth interviews with 50+ senior business leaders, subject matter experts, and catalysts

Through these interactions Sustainability Outlook has identified key demand side and supply side energy management initiatives. This market

brief provides insights to the following questions:

Energy Management: An Imperative for Indian Businesses

India expected to face huge energy shortage by 2030 negatively impacting industrial growth necessitating efforts

for energy management Achieving a growth rate of 8% would involve setting up the infrastructure that is necessary to carry out industrial development at an

unprecedented scale. This means that India needs to install an additional 500 GW of electricity generation capacity by 2030. That translates to

installing additional capacity of 2500 MW every month for the next 15 years.

Figure 1: Current and Projected Energy Demand-Supply Gap

Source: MoSPI, GoI Data, Sustainability Outlook analysis

Power shortages (primarily owing to transmission and distributions losses) currently cost India 0.4% of its GDP. A large number of Indian

businesses use back up energy sources (mainly diesel gensets) and also schedule production activities based on power shortages in their

region; however this is not a long term solution. Also the cost of electricity has been steadily growing and is expected to continue rising in light

of shortage of conventional energy resources.

Industrial energy efficiency is imperative to reduce emission intensity by 2030 and ensure low carbon growth for

India Planning Commission estimates two scenarios by 2030 for Indias growth the baseline scenario (which incorporates inclusive growth policies

as outlined in the Twelfth Five Year Plan) and a low carbon growth scenario (with additional efforts to bring down overall emissions for India).

In the low carbon scenario, the GDP growth is about 3% lower due to the extra investments required for increasing the share of renewable

energy for the country, however the resultant reduction in total GHG emissions is enormous.

By 2030, in the low carbon growth scenario, the emission intensity of the country is expected to decrease by 42% over 2007 levels. This

reduction would primarily be driven by a shift towards low carbon energy sources (64%), however a large chunk of this reduction in emissions

What is the current state of energy management practices in Indian businesses?

What are the next generation opportunity areas for energy management within the Indian industry?

What are the demand side energy management initiatives?

What are the supply side energy management initiatives?


intensity (i.e. 24%) would be owing to energy efficiency measures expected to be undertaken by Indian industries. Hence businesses have a

huge role to play in implementing energy management measures to ensure Indias transition towards a resource efficient economy.

Figure 2: Growth scenarios by 2030 and need for industrial energy efficiency1

Source: Sustainability Outlook analysis (based on data from The Final Report of the Expert Group on Low Carbon Strategies for Inclusive Growth)

Policy Enabling Business Action on Sustainability There are a number of forward thinking regulations that have been rolled out by the Government of India which provides guidelines and benchmarks for effective resource management. Table 1 provides a snapshot of the regulations- both mandatory and voluntary -that are affecting Indian businesses today, or are likely to affect them in the near future. Not all of these standards or legislations are mandatory, but the provision of these standards, gives an incentive to companies to be better prepared for the future as also develop an edge over competitors.

Energy management has emerged as a key focus area for government due to its clear business case as also the

existing energy shortage in the country. Given that industry is one of the key energy guzzlers, the Government of India has rolled out as well as announced a number of energy management regulations. The most widely acclaimed is the Perform Achieve and Trade (PAT) Scheme rolled out by the Bureau of Energy Efficiency which is a Cap and Trade mechanism that has put energy efficiency on the strategic priority map of the top energy consuming industries

2

The designated consumers who are required to lower their energy consumption under this scheme have the flexibility of sale and purchase of

Energy Savings Certificate (ES Certs)3. This gives an opportunity to the more resource efficient companies to also translate their efforts into

1 Sustainability Outlook analysis (based on data from The Final Report of the Expert Group on Low Carbon Strategies for Inclusive

Growth) 2 Thermal power plants, iron and steel, cement, fertilizer, aluminum, pulp and paper, textile, chlor-alkali

3 Each ES Cert is valued at one metric ton of oil equivalent of energy consumed


cost savings. In 2015, the coverage of the units under the scheme (from the 478 designated consumers) would be increased and also the scope

would be widened to bring under its ambit three more heavily polluting industries- railways, oil refineries and power distributors4.

Sustainable infrastructure driven by voluntary standards and government incentives mandates slowly coming into

play Over the past few years, businesses have started developing green buildings and have implemented measures for energy, water and waste

management. In fact, India has over 2,380 registered green building projects and is amongst the top five countries in the world involved in

spearheading the global green building movement5. Most of these measures have been voluntary and taken up by forward thinking

businesses; however government is also now proactively developing incentive mechanisms and policies to further instigate the industry into

action.

The Energy Conservation Building Code (ECBC) rolled out by the Government of India sets minimum energy standards for new commercial

buildings having a connected load of 100 kW or contract demand of 120 kVA. The Centre has also given the flexibility to the State governments

to customize the Code based on the geographical conditions of the regions. In 2014, while some states have already adopted the Code, others

are in the process of discussions and rollout. There have also been recent incentive schemes like the proposal for incentivizing green buildings

and formulating regulatory mechanism to monitor construction, operation and maintenance of rainwater harvesting structures of buildings

and campuses by the Delhi Development Authority in December 2014.

Over the next few years, as the construction sector continues to grow, the Code and resultant state policies are expected to play an immense

role in promoting sustainable buildings.

GANGA and YAMUNA of Technopark Phase III Campus, Trivandrum. Image Credits wikipedia

4 http://www.business-standard.com/article/economy-policy/centre-eyes-higher-targets-for-energy-efficiency-mission-

114120401384_1.html 5 http://timesofindia.indiatimes.com/home/environment/developmental-issues/India-in-top-five-position-in-spearheading-the-

global-green-building-movement-IGBC/articleshow/30368691.cms


Due to the rollout of such forward thinking compliances as well as increasing business consciousness, more and more businesses have been transitioning from the use of compliances as

a checkbox activity to using them as an enabling tool for improving their sustainability strategy.

Key policies for promoting resource management within the Indian industry

Type of policy intervention

Domain of Policy Impact Potential to move the overall needle

on resource management for Indian industry

Current level of impact

Sustainable Manufacturing

Sustainable Facilities

Contribution of impacted businesses to

Indias GDP

Current level of adoption/ uptake

within industry

Sectors impacted

Standards and Labelling of Equipment and Appliances

Electronics

Energy Conservation Building Code

Perform-Achieve and Trade Scheme

Bharat IV+

N/A N/A

Green Telecom Towers Guidelines

N/A N/A

Electricity Amendment Bill, 2014

N/A N/A

Hazardous Waste Management and Handling

Target based performance benchmarking These policies provide specific targets to businesses with penalties for non-compliance.

Benchmarking guideline These are policy tools which provide direction for benchmarking overall industry behavior but in absence of specific targets.

Cap and Trade This is an intervention model where the policy tool delivers results with a mandatory cap on resource usage/emissions while providing flexibility to businesses in the manner of compliance

through trading.

Notes:

The potential to move the needle on resource management is an estimate of the expected resource efficiency achieved based on actual/expected number of businesses impacted.

The color gradation for sectors impacted refers to the overall number of sectors impacted (High= Many, Medium = Few, Low = One or Two)

Since some of the policies are upcoming, N/A is mentioned wherever the details of the policy have not been announced publicly.


Energy Management Trends in Indian Businesses

a) Demand side Energy management: These are initiatives to reduce the consumption of resources in facilities and/or production. These primarily include process modifications to lower energy/water consumption, changing raw material usage,

effective waste management etc.

Within demand side resource management, 136 initiatives pertained to Sustainable Facilities management primarily for

energy, water and waste management

A total of 95 initiatives were for aimed towards Sustainable Production comprising of energy, waste and water

management initiatives as well as efforts related to use of materials sustainably.

b) Supply side Energy management: These are initiatives to increase the generation of resources (primarily energy and water) by businesses for their own use. In case of supply side energy management, there would include efforts like installation of solar

panels, biogas plants etc. and supply side water management would include actions like rainwater harvesting, groundwater recharge

etc. A total of 73 initiatives for supply chain resource management were analyzed within the sample companies primarily for energy

and water management.

While energy management results in direct and significant reduction in cost, the benefits of water management initiatives are often difficult to

quantify. Waste management and recycling initiatives also indirectly reduce expenditure because they lead to a reduction in the cost of raw

materials used.

Some of the key sectoral trends observed are:

Manufacturing industries like textiles, automobile, processed food and beverages focus on demand side management, mainly for

rolling out resource efficient manufacturing technologies. All surveyed businesses with manufacturing units have invested in

improving their production processes, waste heat recovery or in use of chemicals/raw materials which lower energy usage.

Energy management is a key priority for the power, oil & gas sector which directly deals with energy supply and transmission. These

companies focus on demand side energy management as well as supply side by exploring alternative energy sources.

Sectors like IT and IT enabled services, infrastructure and hotels/hospitality focus on demand side energy management primarily for

resource efficient facilities. It may be worth mentioning here that though the number of respondents belonging to the IT and

Hospitality sectors was lower compared to other sectors, the number of initiatives taken by each company was among the highest.

This goes to show that there is scope for implementing energy conservation measures is high even in sectors that are not among the

most energy intensive ones.

Supply side energy management is also gaining prominence amongst various sectors, especially in production heavy unites like

textile, manufacturing, automotive etc. where units are trying to bring down their dependence on external energy sources and

becoming more self -sufficient.

Figure 3: Snapshot of Energy Management initiatives undertaken by various sectors



Demand Side Energy Management Trends in Indian Businesses A total of 61 initiatives for sustainable facilities management from 85+ Indian businesses were analyzed to identify key energy management

trends.

Energy Management Trends for Sustainable Facilities Almost 50% of the initiatives undertaken for resource efficiency in infrastructure and facilities were related to energy efficiency. These

measures are applicable across all sectors to bring down energy consumption in buildings and facilities and include initiatives ranging from

energy efficient lighting and metering solutions to effective ways of minimizing heat transfer in buildings for lowering the cost of cooling.

Figure 8 below gives a brief overview of the various demand management initiatives taken on the infrastructure side.

Most of the initiatives taken in this area can be directly linked to financial benefits observed from implementing these measures. Except for

metering solutions which only help to track and analyze energy usage, all the other initiatives have a direct positive impact on the companies

bottom line in the near term.

Some measures, like building envelope have a higher capital expenditure and hence, a longer payback period. Nevertheless, by reducing the

amount of energy or grid-powered electricity they use, companies fulfill their sustainability goals, while also reducing energy costs, which is

one of the largest expenses for businesses.

Figure 4: Snapshot of demand management energy management initiatives in facilities being undertaken in Indian Businesses


Some of the major trends observed are:

1. Metering Solutions are increasingly being used to track and reduce energy consumption across businesses

Increasingly businesses are putting in measures to quantify their resource usage using metering solutions. In fact, the fundamental step for

businesses intending to improve energy efficiency is to install meters to track energy consumption. Using the results, businesses can determine

the energy intensity in infrastructure and identify areas with a potential for reduction in energy consumption. This data can also help

businesses prioritize the efforts being undertaken.


The monitoring efforts of Indian businesses fall under either of the following three kinds of energy management systems

6 : a) Enterprise

energy management which uses systems to help users monitor and report energy consumption across various business lines within a

corporation; b) Operational energy management which uses systems to monitor and control energy usage in highly intensive equipment like

heating, ventilation and HVAC; c) Information and communication technology energy management which includes systems used by IT

administrators to monitor energy usage by IT infrastructure like data centres, PCs and servers.

The monitoring solutions provide insights into resource usage and are further interpreted by businesses to identify potential areas of energy

savings. It is estimated that just by tracking usage and reducing wastage, consumers can reduce electricity consumption by at least 15%7.

2. Energy efficient lighting is the low hanging fruit industrywide

With Indias energy demand threatening to double itself by 2030, the Indian organizations have taken up innovative ways for conserving

electricity. Efficient Lighting solutions can be implemented either before design phase or onto a pre-existing building. Table summarizes

some of the energy efficient lighting solutions that have been implemented by various businesses.

New buildings can install intelligent daylighting solutions effectively bring down their energy consumption between 20-70%8. Existing buildings

can also be retrofitted using technologies like sky-roofs, efficient lighting and solar light pipes with quantifiable impacts for lowering energy

costs

Table 1: Key energy efficient lighting solutions implemented by Indian businesses

Technology Day Lighting Low wattage Bulbs Solar Light Pipes Sky Roof

New Building Retrofit Retrofit Retrofit

About the Technology

Using natural light during the daytime instead of artificial lights by ensuring proper size and orientation of windows

Use of LEDs instead of CFLs, tube-lights, halogens or incandescent bulbs, as well as incorporation of electronic chokes and voltage regulators

Use of hollow structures to transport or distribute natural light for the purpose of illumination into a room.

Installation of a sky roof/sky light in a room to increase the amount of natural light entering the room

Case in Point SNQS International (Textile manufacturer)

ITC Paperboards- Bhadrachalam Unit (Paper Manufacturing)

ITC Windsor (luxury hotel)

ABB Mumbai. (Heavy electrical equipment manufacturer)

Measures Taken 100% day lighting through

windows and roof mounted translucent roofing system for almost throughout the year

Replacement of 2025 fluorescent Tube Lights with those with electronic chokes; replacement of 100 400W Mercury Vapor lamps with 250W Metal Halide lamps; installation of automatic timers to optimize lighting use, and installation of lighting transformers to reduce lighting voltage levels

Installation of four solar light pipes (two in the buffing room and the other two in the OWC area).

Installation of a simple sky roof in the packing department effectively eliminating the need for artificial lighting during the day.

Savings observed

43.5 % reduction in energy savings with actual savings amounting to 96048 KWHr/Yr

Reduction in overall energy usage for lighting during business hours.

Savings of 2 KWh per day which adds up to 730 KWh per year, saving the company INR 5000/ per year.

Elimination of the need for lighting during business hours.


3. Building Envelope Analysis for reducing energy wastage is being taken up by mainly by the IT and Hospitality sector

Since India has a primarily warm climate, over 40% of commercial building energy is spent in air conditioning and cooling and the main aim of

building envelope analysis is to reduce this load. All the external heat gain of the building comes from the building envelope with the roof,

walls and windows contributing about 30%, 15% and 20% respectively.

Building Envelope analysis involves a heating or cooling load analysis, taking the entire building as a single system. Even simple measures like

using shaded windows can lower heat gain, thereby reducing the load on the air conditioning system. Most of the building envelope analysis

should be done before a building is set up, so as to utilize green building principles most effectively. The orientation of buildings, windows and

opening must allow for cross-ventilation and entry of light, but minimize the heat gain into the building.

Table 2: Key energy building envelope solutions implemented by Indian businesses

Technology Building Orientation Wall Insulation Cool Roof Paints

About the Technology

By orienting buildings in an east-west direction, it is possible to maximize the amount of light infiltration, while minimizing the heat absorption from the sun.

Increase in insulation reduces heat transfer from the buildings external surface to its internal walls.

Cool Roof Paints are white paints for roofs that reflect most of the incident solar radiation and the heat that is absorbed is also readily emitted by the roof, thus keeping it coo.

6 http://www.cognizant.com/InsightsWhitepapers/The-Future-of-Energy-Management.pdf

7 As per Schneider Electric, a leading provider of metering solutions

8 http://www.treehugger.com/clean-technology/intelligent-daylighting-solution-saves-20-70-energy-costs-no-investment.html


Case in Point Infosys- Hyderabad campus (IT and IT enable services)

SNQS Internationals (textiles company)

ITC Green Centre, Gurgaon

Measures Taken

Appropriate building orientation, efficient building envelope that maximizes light but minimizes heat gains, and harvesting enough daylight so that artificial lights are kept off from 8am to 5pm.

Covering 40 % of opening in the walls with high thick glass wool and aluminum foil insulation to minimize heat penetration.

Using cool roof technology to reduce average surface temperature and air conditioning costs- leading to reduction of average summertime daily roof surface temperature by 30 degrees

Savings observed

50% lowering of energy consumption compared to 2007 levels

Reduction in energy consumption by 43%

Cooling energy savings of approximately 10%-15% during hot summer days9.


4. Sustainable alternatives for heating and cooling are gaining prominence in the industry

Heating and cooling are among the most common uses of energy across all sectors. Cooling is used primarily for thermal comfort or for storage

of particular items at a specified temperature in the commercial sector, or for some specific processes in manufacturing. Heating, on the other

hand can be used for a large variety of purposes ranging from cooking, washing, cleaning, sanitization to boilers amongst others .Commonly

used cooling technology to become more energy efficient involve the use of Water cooled chillers and Wind Air Ventilators.

With a relatively small investment requirement, businesses can benefit by significant direct cost savings with a minimal payback period of less

than a year in most cases.

Table 3: Alternative heating and cooling solutions for energy management

Technology Water Cooled Chillers Wind Air Ventilators

About the Technology The chillers spray water into the cooling tower instead of using air-cooled condenser coils. Water cooled chiller are most commonly used in buildings larger than 200,000 sq. ft., where the cooling load is large enough for the increase in efficiency gains to offset the higher equipment cost.

These do not need any electricity to operate and are designed so that a small movement of wind flow will cause its vanes to rotate, causing an exhaust effect that draws out the hot air from the room, allowing fresh air to enter from the other opening. They provide an alternative for electrically operated exhaust fans.

Case in Point Mahindra & Mahindra Hero Honda- Dharuheda factory

Measures Taken Replaced traditional chillers with screw chillers Replaced 125 electric driven exhaust fans with 225 rooftop wind ventilators.

Savings observed Annual savings of 1.26 Lakhs KWh of energy annually resulting in savings of INR 12.6 lakh/ year.

Initial investment cost of Rs.10.63 lakhs, with monthly savings of Rs. 1.5 lakhs and a payback period of 7.5 months.


Industrial cooling tower, Image credit wikipedia

9 http://www.cseindia.org/userfiles/cool_idea.pdf


Approach of Sustainability Focused Indian Businesses towards Energy Management An increasing number of Indian businesses have started focusing on energy efficiency measures for sustainable facilities management within

the industry - within both services and the industrial sector. This is because of the comparatively shorter payback periods for most of the

initiatives as well as the directly observable benefits. Another reason is also the ease of bringing about change or feasibility of making

facilities more resource efficient as compared to changing production processes within industry.

Figure 5: Feasibility vs. Payback Period of Initiatives for Energy Management Feasibility represents the ease of access to technology and of implementation. (Payback period between 1-5 years has been considered low, and more than 5

years has been considered as high.)


Figure 6: Current level of uptake of initiatives for Energy management within sustainability focused Indian businesses


Figure 5 and 6 provide an overview of the uptake of initiatives for sustainable facilities management within Indian businesses. The businesses

can identify themselves as Sustainability Followers, Sustainability Leaders and Sustainability Thinkers based on the level of uptake of their

internal initiatives within the overall industry.

As expected, energy and water management initiatives with high feasibility and low payback period have seen an active uptake for sustainable

facilities management. Within the overall gamut of initiatives that can be undertaken for sustainable facilities management, efforts like energy

efficient lighting, efficient water fixtures etc. have become business-as-usual for sustainability focused businesses (and hence these businesses

have become Sustainability Followers). Some initiatives like the Sewage Treatment Plant despite a higher cost has seen uptake within the

hospitality sector due to compliance mandates. While the efforts being undertaken by these Sustainability Followers are commendable, they

need to step up their efforts and move beyond the low hanging fruits going forward.

Initiatives like wind air ventilators are typically undertaken at factory premises and have a comparatively longer payback period (2-4 years)

with medium feasibility of implementation. And water as a commodity has a very low price due to which there is very little incentive for

businesses to monitor water usage this behavior is further augmented by the higher price of water meters. Hence wind air ventilators and


water monitoring initiatives are currently being taken up by only those businesses which are looking to move beyond business-as-usual efforts

sometimes despite higher investment such forward thinking businesses are Sustainability Leaders.

Initiatives like building envelope require higher investment with a long payback period and mostly done on new buildings hence requires

strategic planning by businesses in advance. Similarly water cooled chillers are medium feasibility technologies for energy efficient cooling in

buildings, however the investment required and payback period are high. Hence such initiatives are being undertaken only by innovative

Sustainability Thinkers who have a strategic long term outlook for ensuring sustainability in their operations and facilities.

Sustainable Production Trends in Indian Businesses

Energy Management Trends for Sustainable Production A large number of energy intensive manufacturing sectors have started rolling out initiatives for more efficient production.

Figure 7: Snapshot of demand side energy management initiatives for sustainable production


Some of the key trends for sustainable manufacturing are:

1. Up-gradation of existing technologies and processes has longer payback periods but huge benefits

Up-gradation may involve replacing older machines with less energy intensive ones, optimizing process parameters, adding new processes in

the production line to reduce overall energy consumption or replacing old equipment and production technology with more modern ones.

Technology up gradation or improvement of the machines used in processes has led to significant savings in many manufacturing units; even

though there is high capital expenditure and the payback periods purely from an energy savings point of view may be longer than 3 years.

There are multiple benefits of updating old equipment, like flexibility of operation and shorter processing time apart from just energy savings.

Technology Up-gradation

Case in Point Mindarika (a unit of Minda Industries Group) in Gurgaon Plant Bhanu Farms, Food processing company

Measures Taken Using new electric based injection molding machine in place of hydraulic machine (initial investment of Rs. 40 lakhs)

Upgradation of old capacitors with fully automated capacitor panels that constantly keep the power factor to 0.9

Savings Energy savings worth Rs. 18.37 Lakh annually Energy savings of 850 units a day which translates to annual

savings of Rs. 29.7 lakhs


Replacement of Chemicals/ Material Add new Processes in Production line Replace existing production technology

Case in Point Dystar (manufacturer of dyes and chemicals for the textile and leather industry)

Mahindra & Mahindra (automobile manufacturer)

Bhanu Farms (food processing company)

Measures Taken Replacement of older dyes with in-house Sera Zyme C-PE and Sera DAL G-RFXand Remazol UltraRGB.

Switching off Oven and Cooling Zone by changing WAX process

Using a transformer with on-load tap changer for their processing plant.


Savings Use of 19.6% and 28% less electricity, respectively, for processing by the dyes

Savings worth 20.7 lakh units of electricity annually (or Rs. 2.07 crore).

Reduction of 10% energy usage, saving 200 units a day, saving Rs. 7 lakh annually


Owing to the high capital cost of technology up-gradation, Government of India provides subsidy to manufacturing units under the Credit

Linked Capital Subsidy Scheme (CLCCS) covering above 1500 technologies and machineries under 51 sub-sectors. Due to the positive uptake of

the scheme within the industry, the government is now planning to expand this list of technologies and sectors eligible for subsidy to promote

adoption of upgraded technology.

2. Industrial Heat Recovery taken up by businesses resulting in direct energy savings

Industrial processes require transfer and exchange of heat for cooling down or heating up the main medium. During the cooling process, the

heat exchanger fluid heats up and this heat can be captured for reuse within the heating cycle. This type of industrial heat recovery efforts

saves a lot of energy, since the additional energy required to heat up the fluid by a few degrees is a lot less than heating it up from room

temperature. The reverse is true for fluids that are cooled in industrial processes. This is usually done through use of boilers, evaporators,

condensers, etc.

Companies like Shree Cement have successfully used waste heat recovery to generate 46MW of green power, leading to a reduction of CO2

emission by 1.2 lac tons/day.

3. Businesses observe huge benefits in simple process optimization and timed production

By simply optimizing current production processes, businesses across industries have been able to save significant amount of money and

energy, while improve productivity.

Process optimization and timed production

Case in Point Hindustan Unilever (Fast moving consumer goods company) Mahindra & Mahindra (automobile manufacturers)

Measures Taken Process optimization involving pre heating of steam Eliminated the Sealer Oven in their paint shop

Savings 25% reduction in energy consumption in the process Saved 5 Lakhs KWh and 175 MT LPG annually


Approach of Sustainability Focused Indian business towards Resource Efficient Production Unlike sustainable facilities management where a significant number of initiatives have high feasibility and low payback periods, most of the

initiatives for sustainable production have either long payback periods or high difficulty in implementation.

However, many businesses have started integrating practices for mainstreaming sustainability in their production processes to enable efficient

energy management and also to materials sustainably. Such efforts are being necessitated for large as well as small businesses due to

mandates as well as the resource shortages being faced.

Figure 8: Feasibility vs. Payback Period of Initiatives for Sustainable Production (Feasibility represents the ease of access to technology and of implementation. Payback period between 1-5 years has been considered low, and more than 5

years has been considered as high.)



Figure 9: Current level of uptake of initiatives for Energy management in sustainable production within sustainability focused Indian businesses


It is interesting to note that while businesses are undertaking initiatives for sustainable production, more than 60% of these initiatives have

become business as usual within the industry. However, unlike sustainable facilities management, a large number of businesses have moved

on to undertake the next level of sustainability initiatives.

Initiatives like installing heat recovery unit for energy efficiency, improving process integration for energy and water savings, wastewater

recycling etc. have become a fair practice amongst sustainability focused businesses (Sustainability Followers). Many such sustainability

focused businesses have also started using alternatives to plastic packaging and recycled material during production. Although these initiatives

are not always highly feasible with short payback periods, many businesses are undertaking sometimes in response to compliance mandates

and also due to the direct observable benefits. Hazardous industrial waste management is one of the most expensive waste management

measures, but since it is mandated by law, industries have put it steps for implementation.

Some forward thinking companies have gone further than the low hanging fruits/compliance mandated initiatives to mainstream sustainability

in their production (Sustainability Leaders). These businesses are often undertaking cost intensive initiatives like technology up gradation for

better energy and water management and also increasing the efficacy of production for creating lesser material waste. These businesses are

also making efforts to create closed loop systems to reuse waster, energy and waste within production systems itself as much as possible.

Sustainability Thinkers are innovative forward thinking businesses who are going even further to automate processes and investing in R&D to

develop technologies and products for reducing resource consumption.

It is pertinent to note here that all businesses undertake initiatives depending on their technological need, level of resource consumption and

funds available sometimes in response to mandates or sometimes for thought leadership. Hence, most often the result is that a company

might be exceptional in managing one aspect of resource consumption (for instance, energy) and lagging in other efforts (for instance use of

materials sustainably). There are hardly any Indian businesses that can be sustainability thinkers in all resource management dimensions since

sustainable production is an ongoing journey.

Supply Side Resource Management Trends in Indian Businesses The supply side resource management initiatives being undertaken by 85+ businesses were analyzed, out of which 62% of initiatives were

focused on generating cleaner alternative energy generation - dealing particularly with solar energy, biomass/biogas and wind energy and 38%

were focused on water management initiatives.

Supply side Energy Management Trends in Indian Businesses Figure presents a snapshot of the supply side energy management trends being undertaken by businesses. Most of these initiatives are

sector agnostic, however certain initiatives, like adding wind power generation capacity, would not be economically feasible unless the

operations of the company were large enough to justify the initial investment. The key aspect of increasing renewable energy capacity like

solar or wind energy is that unlike conventional energy, this involves a high initial cost, but low operational costs; hence companies often view

this as a long-term investment.


Figure 10: Snapshot of supply side energy management trends in Indian businesses


Some of the major trends observed are:

1. Despite the high upfront capital expenditure, renewable energy generation technologies are being implemented by a

large number of corporates

Decentralized solar power systems are the most popular choice for industries and businesses. Most companies have systems with battery

back-ups that can store the surplus energy generated during the day and utilize it at night. Unlike solar panels which can be installed on the

roof of any building, installing wind turbines is a project on a much larger scale. The other issue with wind power is that it is very location

specific, and detailed analysis is needed before the project installation can begin.

Solar water heaters provide a popular alternative for water heating, used for low temperature applications (60-90 degrees C) like cooking,

cleaning, etc. While the temperature of the water is not high enough for industrial use in most cases, it is ideal for domestic purposes, and can

be used in hotels, kitchens and other commercial buildings that require hot water.

Generation of Energy from Biomass, is a particularly attractive option for industries that already produce biodegradable waste, like sugarcane

manufacturing, food processing etc. Energy can be generated from Biomass by either directly incinerating waste material like firewood, rice

husks, crop stalks, or by producing Biogas from organic materials such as animal dung, canteen wastes, and industrial wastes. The gas

essentially comprises of methane which has a high calorific value.

Estimates show that there exists a potential of generating 956 MW of energy from waste by 201710

. With technological improvements,

improved waste management systems and better quality of source waste due to increased segregation, the potential capacity for waste to

energy plants is expected to grow to approximately 2200 MW by 2030 and 5400 MW by 2052 and hence biomass can play an important role.

Biogas can be generated from organic material and has a low carbon footprint when used as a fuel. Recognizing this, a lot of businesses are

using their waste to generate biogas and generate heat from combustion of the gas. Biogas uses the organic raw material as a fuel and it is

incinerated to produce heat and electricity, either by pyrolysis or gasification.

For instance, automotive major, TVS Motors has installed a Biogas plant (using waste food) in their facility which has a feeding capacity of

5MT/day which is currently generating 60-70 kg of gas. Another leading example is Kirloskar Oil Engines is also generating 500kg biogas per day

from kitchen waste.

10

Report Value Out of Waste: The USD 1.5 Billion Opportunity, cKinetics, Feb 2015


Installation of Solar Panels Installation of Wind Power Installation of Biomass/ Biogas Plant

Case in Point GETCO (an electrical power transmission company)

The Leela (luxury hotel) Welspun (textile manufacturer)

Measures Taken Installation of 500 MW of Solar Panels, with average generation around 300 MW a day.

Installation of wind mills which generate 70% of their electrical consumption,

Establishment of a biogas plant of 5MT/ day, currently generating 60-70 kg gas/ day

Savings Savings of 14.4 lakh kilo liters of oil and 5040 metric ton of coal.

6118 Tons of CO2 reduction that would have been otherwise used to generate the energy from coal.

Savings of 15740 units of electricity and 11 MT of coal per day.


2. Flare Gas Recovery has a fair number of takers amongst oil refineries

In oil refineries, flare gas is burnt off as a pressure relieving mechanism. However, some oil and gas companies have initiated flare gas recovery

projects by which they do not waste the energy in the flare gas by combustion, but instead the gas is recovered and burnt as a fuel to generate

heat needed for the operations. Hydrogen is generated as a by-product of certain industrial processes, and it can then be stored and used as a

fuel. This is mainly done by oil refineries.

3. Energy storage technologies seeing limited uptake owing to high cost

Improved energy storage systems involves the use of large capacity batteries that can be used with renewable electricity generation like solar

or wind power to store the energy for use, as and when required. The larger the capacity of the battery the longer the back-up provided and

the more reliable the system becomes.

However, due to the prohibitively high cost of advanced energy storage systems, very often, it is not an economically viable option still a few

front runners have started using energy storage systems to back up their renewable energy initiatives.

Flare Gas Recovery Hydrogen Generation Installation of Energy Storage

Case in Point Oil and Natural Gas Corporation (an oil and natural gas company)

Indian Oil Corporation (an oil and natural gas company)

Sun Carrier Omega (renewable energy service provider)

Measures Taken Recovered heat from Process Gas Compressors (PGCs) in Mumbai High South (offshore platform)

Used Hydrogen Generation in three of its refineries. They optimized the use of Hydrogen and improved recovery through PSA (Pressure Swing Adsorption) systems

Cellcube vandium redox flow batteries are rated at 30kWand 300 kWh and provide the necessary backup required for their off-grid solar power plant that operates 24/7 365 days a year from on-site solar power.

Savings The recovered heat was used for process heating oil. The total Carbon Emission Reduction through this and other measures was 18, 75,003 per year from waste heat recovery.

This and other measures have enabled saving energy equivalent to 83000 SRFT (standard refinery fuel in tonnes)

Difficult to quantify, since it does not generate or reduce electricity consumption, but stores excess generation for future use.


Approach of Sustainability focused businesses to supply chain Resource management Supply chain resource management is slowly picking up in Indian businesses due to greater awareness, increasing availability of technology

and reduced dependency on external power sources. Figure and present the feasibility versus payback period of supply chain management

initiatives and level of uptake within sustainability focused businesses.

Supply side technologies like solar have a high payback period, but are still a very popular choice, because of the easily available technology

and government incentives for solar power users. Rainwater harvesting is a water management initiative which is extremely popular amongst

industries as well as the services sector. Such initiatives have seen good uptake within Indian businesses (Sustainability Followers) and are

often the first step in the supply chain management journey.

The next set of businesses (Sustainability Leaders) move beyond the low hanging fruits such as rainwater harvesting to also undertake

groundwater recharge in their region which has higher investment implications. Within the hospitality as well as industrial sector, solar water

heaters are also actively being taken up which have a higher investment requirement than conventional heating.

Other technologies like hydrogen generation and installation of energy storage are also being taken up by such sustainability thinkers who

are coming forward to embrace new technologies.


Figure 11: Feasibility vs. Payback Period of Initiatives for Sustainable Production (Feasibility represents the ease of access to technology and ease of implementation. Payback period between 1-5 years has been considered low, and more than

5 years has been considered as high.)


Figure 12: Current level of uptake of initiatives for Energy management in Supply chain



The Way Forward India Inc has realized the benefits of sustainable energy management practices and is clearly going beyond compliance to cash in on these

benefits. There is a tremendous scope for improvement of energy management in sectors like HVAC which present a sizable business

opportunity for the service providers. Energy management is regarded as a tool to improve the productivity as well as reduce input cost.

This brief is an outcome of on-going industry engagement efforts by Sustainability Outlook to capture the resource sustainability trends in the

Indian industry.

To get engaged in the process of identification of sustainability trends in India for 2015, nominate your sustainability initiatives for the 2015

Parivartan Sustainability Innovation Awards

To receive the reports, get engaged or to learn more about the on-going work related to Smart Cities, please email us at

[email protected] (Market Access & Insights Team at Sustainability Outlook)

Being Open to adoption of new technology

Encouraging Energy management practices at all levels of organizations Way Forward for Businesses Way Forward for Businesses

Stricter policies on energy efficiency and proper enforcement of policies across all sectors

Supporting energy efficiency measures through financial inentives

Way Forward for Policy Makers Way Forward for Policy Makers


Image: Flickr

About Sustainability Outlook Sustainability Outlook, a division of cKinetics, is a market intelligence, discovery and collaboration platform facilitating sustainability linked actions amongst businesses, policy makers and investors. Sustainability Outlook actively tracks and provides market insights in resource management with focus on policy, technology and finance to work towards creating closed loop systems. Contact Market Access & Insights Team [email protected]

Sustainability Outlook and cKinetics are trademarks of cKinetics Consulting Service Private Limited, its parent, or subsidiaries thereof. Other product and company names mentioned herein may be trademarks and/or registered trademarks of their respective owners. Sustainability Outlook assumes no liability or responsibility for any errors or omissions in the content of this report and further disclaims any liability of any nature for any loss whatsoever caused in connection with using the information on this report. By accessing Sustainability Outlook reports and services, you agree to the following terms, and your viewing of and any use of the information is subject thereto: http://sustainabilityoutlook.in/content/page/terms

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Energy Management Trends in Indian Industry