Power Ministry Initiates Several Measures for Promoting Energy Efficiency in Lighting Sector

BEE & EESL to Develop Business Model for Procuring Led Bulbs

Light Emitting Diode (LED ) are emerging as the most energy-efficient source of lighting, with a LED bulb using 1/10th as much energy as a normal incandescent bulb and half as much energy as a Compact Fluorescent Lamp (CFL) to produce the same amount of light. However, the major challenge has been its high cost. The first LED lamp made in India, in 2010 was sold for Rs.1200. The Bureau of Energy Efficiency (BEE) under the Ministry of Power initiated a systematic process to exploit the energy saving potential of LEDs, and to bring them into large scale use as soon as possible. Consequently, a roadmap was prepared, in close cooperation with the lighting industry, which sought to: (a) ensure the quality and reliability of LED lamps; (b) reduce the price of LED lamps, initially through large scale public procurement and then through a labelling programme; and (c) facilitate awareness and demonstration of this lighting through its technology. BEE simultaneously promoted demand for LED bulbs and for LED streetlights by providing financial support to all states to set up demonstration projects to highlight the lighting quality and energy savings of this technology. Further, in order to enhance demand for LED bulbs , the Ministry of Power, decided that henceforth all bulbs provided to below-poverty line households at the time of connection, estimated to be about 3.4 million, under the Rajiv Gandhi Grameen Vidyuthikaran Yojana (RGGVY) would use LED technology. At the same time, a number of electricity distribution companies have also entered into agreements with LED manufacturers for the supply of LED bulbs at preferential prices to their consumers. All lighting manufacturers have established manufacturing facilities for LED-based lighting system in India, and have started training programmes for lighting engineers and demonstration programmes in various buildings to showcase this technology. BEE together with EESL (Energy Efficiency Services Limited, a joint venture of 4 power sector central PSUs) have worked with electricity distribution companies to develop a business model under which EESL procures LED bulbs in bulk and sells them to households at Rs.10 instead of the market price of Rs.400. The electricity distribution companies then repays EESL, over a period of 5 to 8 years from the savings that accrue due to use of this energy efficient lighting technology. EESL has already completed a number of projects to retrofit existing streetlights to energy efficient LED streetlights as well as a 7.5 lakh LED bulb replacement project for households in Pudhuchery. This resulted in reduction of cost of LED bulbs from Rs.400/- to Rs.310/- inclusive of warranty. Recently in August this year , following the signing of MOU between EESL and Government of Andhra Pradesh, EESL completed the procurement process of 20 lakh LED bulbs last week. Almost the entire lighting industry participated in the bid and the lowest quoted price was Rs.204/- per LED bulb. This is almost 35% less than the Puducherry LED price and about 50% below the price at the beginning of the year. The rapid price reduction as a result of aggregation of demand augurs well for promoting energy efficiency in lighting sector with the state of the art LED technology. At a price of Rs.204, LED are just 30-40% costlier than CFLs. As compared to CFLs, LEDs are 50% more energy efficient apart from not using mercury as is the case with CFL. Also, LEDs have life that is 4-5 times more than CFLs and therefore are cheaper option on life cycle cost basis. A barrier of use of LEDs in household sector is the lack of standardisation and awareness. BEE will now be launching a labelling programme, coupled with an outreach and awareness campaign, to drive the LED demand significantly. The present demand of ICLs and CFLs is more than 1.1 billion units every year. Increase in domestic demand would further reduce cost of LED bulbs with larger production capacities getting created in India. Also, along with standardisation and awareness generation, bulk public procurement could also spur demand and lead to price reduction in an accelerated manner.