Energy consumption across the world is increasing by leaps and bounds. The rise in energy demand was more pronounced in the latter half of the twentieth century due to rising population, industrial development and better living standards. From 1900 to 1965, global energy consumption increased by 600 per cent and from 1965 to 2000, it was expected to be 450 per cent. In 1973, energy consumption was 5,900 million metric tonnes of oil equivalent (mmtoe) and is projected to exceed 12,000 mmtoe by 2010.

The burgeoning energy consumption has resulted in exploitation of fossil fuels at a terrific rate and the world could be facing a deep energy crisis some years down the line. Sustained use of fossil fuels leads to emissions of polluting substances, which disturb the atmosphere and cause health risks. In light of these aspects, a macro-level approach to energy conservation on a worldwide scale assumes more and more significance. Although a variety of alternate energy sources are being experimented, coal and petroleum continue to dominate the global scenario.  While nuclear energy’s share is on the rise, its use is still not as widespread as the conventional fuels.

In India, which is one of the high growth centres of almost all forms of energy, petroleum accounts for 40 per cent of the energy consumption. The country’s refining capacity has seen significant additions in the last one or two years and is currently in a position to meet the demand of most petroleum products.

However, there is acute shortage of crude petroleum, since the crude requirement is about 110 million tonnes per annum, against a production level of 30-33 million tonnes per annum.  Heavy dependence on import means higher cost of energy and the uncertainties of fluctuating crude supplies and international prices.

In what is billed as a major effort in energy efficiency and conservation, the Government of India has proposed the Energy Efficiency Bill 2000, which has already been tabled in the Parliament.  This bill, the first of its kind in India, seeks to maximise the energy efficiency in the country through a systematic approach as highlighted below:

• provision for creation of a central Energy Conservation Fund (ECF)
• ECF to meet costs of implementing the bill and be responsible for information dissemination on use of energy efficient systems and practices
• provision for creation of Bureau of Energy Efficiency (BEE) to recommend energy standards, energy labels
• powers to central government to establish energy standards for buildings, industrial processes and  equipment
• powers to state governments for amending energy standards for buildings in accordance with site conditions

The Bill has indeed laid out some laudable objectives, but their success is not guaranteed unless the industry and consuming sections give necessary support and adopt a disciplined approach in the overall interest of the nation. For their part, the Petroleum Conservation Research Association (PCRA) in association with the oil companies has proposed a long term strategy for  promoting energy conservation:

• Energy conservation to be viewed as a source of energy and used to bridge the gap between demand and supply
• Standards to be laid down for energy efficiency in accordance with international standards for processes and equipment
• Energy labelling for technology, process and equipment to be made mandatory
• Standard fuel consumption norms to be specified for different industries
• Rationalisation of petroleum fuels with a view to achieve optimum energy efficiency
• Energy audit to be made compulsory, especially for energy intensive units
• Small and medium scale industries to be encouraged to implement technology upgradation and gradually dispense with inefficient equipment and systems
• Incentives to be provided for energy conservation measures, to encourage those who implement energy conservation measures

In respect of electrical energy, India today faces a peak shortage in the range of 11 to 18 per cent. To close this gap and also meet the rising demand, capacity addition of about 6500 mw must be done every year at an estimated cost of Rs 260 billion per annum. Despite the liberalisation of power sector, private investment has not taken off due to various problems. This being the case, the rate of power capacity addition may not be sufficient. Therefore, energy conservation measures must be implemented to use the available power as effectively as possible. Recent studies suggest that with proper energy conservation measures, about 25 per cent of energy consumption can be reduced. This means that the required capacity addition will come down by 25 per cent, representing huge savings on capital cost.

The Indian Renewable Energy Development Agency Limited (IREDA), a public limited government company under the control of Ministry of Non-conventional Energy Sources is one of the key agencies promoting energy efficiency projects. IREDA offers financial assistance and related services for power projects covering solar, wind, mini hydro, bio-energy technologies and energy efficient projects. IREDA funds upto 80 per cent of the project cost and 90 per cent for equipment procurement at interest rates ranging from 0 to 15 per cent.  Attractive lending features include a moratorium period of three years and repayment period of 10 years. IREDA offers 0.5 per cent in interest rate for timely repayment of lands and another 0.5 per cent rebate is applicable for world bank backed projects.