Energy Efficiency Project Development

There are various projects dealing with various aspects of energy and GHG reduction strategies on a country-specific basis. The international funding for most of these projects comes from the Global Environment Facility (GEF), United Nations Development Programme (UNDP), the World Bank, the Asian Development Bank (ADB), and so on. The ongoing assistance for a given option does not automatically rule out the option, as it needs to be ascertained whether involvement is still needed for furthering that option to its logical conclusion. For example, if only the feasibility analysis is done—which is the case with many of the projects—then based on that, a demonstration project may still be needed. In some cases further work may not be needed for the time being. In other cases, building upon ongoing efforts may make GEF involvement more successful and cost effective. A number of efficient options exist to reduce energy consumption. Hence, at the country level, it is important (a) to identify and evaluate various efficient options, (b) to develop specific investment projects and related institutional designs for selected policy options and (c) to strengthen the institutional and technical capabilities. These are critical steps. Careful preparation of project design is vital to its success. This requires technical skills that need to be developed.

By the end of this project period, expertise in identifying and assessing various projects in the areas of power, coal, demand-side management and cogeneration could be achieved. These projects would promote more efficient use of power generation through renewable fuels, reducing demand for fuel through efficiency improvement in fuel use and power generation, reducing demand for power through demand-side management, better utilization of cogeneration and renewable fuels and reduction in use of petroleum products. Also the identification ofdonors and implementing agencies, the institutional and financial mechanisms could be done. Specifically the following achievements are expected at the end of the project.

• Several investment project options could be evaluated as part of the case studies undertaken in this project. On the basis of these evaluations, investment measures, including financial requirements would have been designed for the reduction of energy through various options.

• A plan, which includes measures that address the investment requirements, the institutional and economic incentives, and the associated environmental benefits. The mix of approaches appropriate to each technology will also be delineated.

• Models and methodologies for the technical and economic evaluation of EE options at the micro and macro level will be acquired or developed.

• Development of institutional mechanisms such as the Energy Service Company for implementing the selected options would have taken place.

The projects that can be taken up for improving EE in various sectors are given in Table 5.8.

Table 5.8 Energy Efficiency Projects

Energy type

Efficiency improvements

1. Electricity

• Reduction of T&D losses

• Improving end use of electricity

• Agricultural pump-sets

• Domestic appliances

• Industrial motors

• Reduction of auxiliary consumption in power plants

2. Petroleum Products

• Industrial boilers

• Co-generation

3. Coal

• Coal beneficiation

• Coal bed methane

4. Renewable Energy Sources

• Solar, thermal, including industrial process heat power


• Solar passive architecture

• Biomass energy

• Co-generation

• combustion

• gasification

• pyrolysis, etc.

• Solar photovoltaic power

• Fuel cells

5. Transport

• Compressed natural gas vehicles

• Electric vehicles

6. Buildings

• Efficient buildings

Source: Authors.

Source: Authors.

The EE projects should be viewed in a programmatic context. The basic objective is to identify cost-effective options and assess specific investment and related institutional and policy options. This can be achieved through the evaluation of efficient options, identification of technology gaps, investment requirements, economic incentives and institutional mechanisms necessary to achieve technology penetration. The emphasis of this is on energy efficiency and fuel substitution and hence, the potential for reducing energy utilization in the long run.

To be a successful energy efficiency project or programme, it should,

• Provide significant energy savings;

• Be comprehensive, striving to achieve all cost-effective savings available in each customer interaction;

• Be preferably large scale, creating EE capability as well as capturing present savings;

• Be monitored and evaluated, to documents saving and to support;

• Provide continuous improvement; and

• Pay particular attention to preventing lost opportunities.

To select and give priorities to various EE projects, we need to weigh a variety of considerations. These criteria can be as follows:

• The magnitude of potential energy saving. How much resource can the energy efficient project eventually save? This depends on the extent of the use and its potential growth in future.

• The cost effectiveness of savings. How much would it cost to save one unit of energy?

• Replicability of the project. Can the project be taken off on its own after the initial momentum or not?

• Sustainability. Is the policy framework available such that the project benefits will last long? What are the perceived risks?

• Monitorability and measurability. Are the savings measurable and can the project be monitored or not?

• Implementability. How easy is it to implement the policy? Does it create incentives which are appropriate?

• Barriers. What are the barriers to the implementation of the project relating to technological, institutional, capacity, policy or transaction costs?

This is a long list and there may not be an easy way to quantify all of these criteria. Qualitative assessment and a measure of judgement are inescapable. Figure 5.1 provides the methodology for selecting the projects. This is one method of selecting an EE project which is government-driven and supported by an international agency.

Since the costs and benefits of energy efficiency projects vary according to the actor involved, it is important to consider these projects from the perspective of various stakeholders (Figure 5.2).

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Renewable Energy 101

Renewable Energy 101

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable. The usage of renewable energy sources is very important when considering the sustainability of the existing energy usage of the world. While there is currently an abundance of non-renewable energy sources, such as nuclear fuels, these energy sources are depleting. In addition to being a non-renewable supply, the non-renewable energy sources release emissions into the air, which has an adverse effect on the environment.

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