The good news

As reported in this blog last week, new rules governing the distribution of foreign donor aid under the REDD scheme had been delayed. It was however announced earlier this week that the new rules, as well as the new climate change fund, would be ready before the Bonn climate change talks in June. Agus Purnomo, former head of the WWF in Indonesia and speaking on behalf of the DNPI (National Board on Climate Change), stated that it was issues over taxation on profits and Indonesia’s bureaucracy that was putting investors, and especially private businesses, off investing in Indonesia but the new rules should address these concerns. Add to this the announced 70 approved CDM projects and it appears that the Indonesian government is finally building up some momentum in the climate change realm. While I share this blogger’s concern over how much of the money will be put into effective climate change policies, it is hoped that the rules will provide a clear explanation of how the money will be spent, thereby encouraging investments.

Now the Bad news

It has always been the presumption that billions of dollars will flow into the Indonesian economy once these rules had been formulated. However it appears that the global economic crisis could claim yet another victim. Mahendra Siregar from the Adaption Fund Board at the United Nations Framework Climate Change Convention (UNFCCC) was adamant: “the idea that Indonesia will finance its climate change programs on foreign money generated from the signing of the Kyoto protocol is a fantasy. No amount of foreign funding would be enough to deal with Indonesia’s climate change problems.” Add to this a collapse in the price of CO2 and a drive within companies to reduce operating costs, means payments into the UN Adaption Fund may not be what developing countries are hoping for. Indeed Mahendra speculates that instead of billions of dollars, the entire adaption fund would only amount to $150 million split between all developing countries. Indonesia’s budget for climate change in 2009 is Rp 1.8 trillion (US$ 200 million) and relied on a sizable investment from the Adaption Fund.

What to do? Local community engagement

So if international donor money does dry up, what can be done? One suggestion is engaging with local communities two ways. First of all, local engagement can reduce deforestation caused by palm plantation. And it need not be expensive. Yayasan Orangutan Indonesia, an Indonesian NGO dedicated to saving the orangutan, provides education and information to villagers explaining the dangers local communities face to their environment if they sell land to palm oil cultivators. Once explained what impact these plantations have, the communities are much more likely to refuse payments for land, thereby preventing deforestation.

Secondly, reforestation projects could utilize local labour and knowledge, along with direct private funding, thereby cutting out the multiple layers of government. A good example of this is the WWF NEWtrees scheme, created in conjunction with Nokia and Equinox Publishing. Originally launched in November 2007 in Sebangau National Park, Kalimantan, it initially planted 100,000 trees with Nokia providing the trees and tagging technology. This week, the scheme was extended to Mt. Rinjani, East Lombok hoping to replenish the 40000 hectares of deforested land. In collaboration with the local communities, the program hopes to help the 3 million people who have been directly affected by deforestation.

These programs and schemes highlight simple, effective ways to tackle climate change. By engaging with local communities and addressing their livelihood issues, climate change can be tackled at the local level at minimal expense. Whether schemes like this will be rapidly expanded in the coming year remains to be seen, but the global economic crisis should not be used as an excuse for inaction.

Only one week into office and U.S. President Barack Obama is charging full speed ahead on fulfilling his campaign promise to bring change to Washington. In an effort to reverse former President Bush’s policy on climate change and take the United States in a new greener direction, Obama asked the Environmental Protection Agency on Monday to review whether states should be allowed to set more stringent emission standards than those that are currently federally mandated. Additionally, Obama directed American automakers to develop more fuel efficient cars and trucks for models with release dates starting in 2011.

More than a dozen states have adopted the more stringent standards set by California which requires a 30 percent cut in emissions and a federal waiver could lead to more states signing on. While environmentalists are understandably thrilled at the direction of the new administration, Obama’s announcement has led to resistance by both automakers and Republicans. The two leading arguments put forth by the opposition are that a reversal in Bush’s order will be costly to automakers in an already struggling economy and state-led emissions requirements creates the possibility of a patchwork of different standards for different states. Alternatively, the automakers want uniform mileage and emission standards set nationwide along with assistance and incentives for car buyers to alleviate the added cost. While environmentalists may be applauding Obama’s announcement, the argument made by the automakers does deserve consideration.

When the Bush administration showed reluctance to legislate any significant curb in tail-pipe emissions and increase fuel efficiency requirements, the effort of states to step in and tackle the issue of greenhouse emissions themselves appeared a win for environmentalists. Furthermore, future U.S. presidents might not be as green-minded as President Obama. In such instances, state-led emission standards can provide the greatest opportunity for environmentalists to bring change to the auto industry by allowing states to set their own bar for the auto companies to meet.

However, should Maryland suddenly decide to set even more stringent standards than California, what does this mean for the automakers? The answer is additional costs and confusion for the auto industry. This will inevitably lead the car companies to try to meet the most stringent standards to avoid a patchwork of different regulations. While this may be a positive result for environmentalists, it also means huge costs anytime a state decides to tighten its requirements beyond the then-set industry standard.

The Obama administration is in a great position to bring change to the U.S. auto industry including the opportunity to institute a nation-wide tightening of emissions beginning with the model put forth by California. This could reduce confusion over state-by-state regulations and lessen the price tag for adjustment.

While I applaud President Obama’s push toward reducing emissions, considering a nationwide approach may prove to be a more effective, less confusing and less costly way to reduce auto emissions nationwide.

The Baglihar Dam on the Chenab (photo credit:Reuters)

It’s an election year and India’s opposition party has begun setting its agenda on green issues. The National Democratic Alliance’s LK Advani yesterday pledged to make access to drinking water a fundamental right and water conservation a fundamental duty for all Indians. Moreover, key elements of Mr Advani’s campaign will be fighting terrorism and climate change, because “the “destruction of environment” was another form of terrorism.” Nevertheless, going beyond rhetoric and election soundbites, India needs to properly integrate its water resources and set up better regulatory mechanisms that monitor water use efficiency.

Water: the story so far

The question of water security in India is not new, nor is restricted to within India’s borders. But India’s exploding energy needs are pushing the need for water security to the fore. Water management is vital to maintaining India’s growth rate as well as one of India’s biggest obstacles. The government notes that “in order to fuel a sustained 8% annual growth […] basic capacities in the energy sector and related physical infrastructure such as rail, ports, road and water grow by factors of 3 to 7 times by 2031-2032.”

India’s water situation looks bleak. India’s industrial zones are located in water stressed zones. Poor water storage capacities and heavy subsidies given to the agricultural sector have resulted in excessive water wastage and over exploitation of ground water. Furthermore, India is still very dependent on the weather, melting glaciers and patchy monsoons spelling doom for the economy. Rampant urban growth has caused the sudden depletion of wetland areas in many parts: for example, of the 261 lakes in and around Bangalore city in 1961, only 34 remain.

Politicizing water

With such urgent water needs, it is no wonder that water has become politicised at every level - from the city to the state right up to the national and even international level.

Take, for example, the state of Jammu and Kashmir. Despite great untapped hydro-electric potential, J&K suffers from severe power shortages. Projects on Jammu and Kashmir’s primary rivers are restricted by the Indus Waters Treaty which split the rights to the Indus and its tributaries between India and Pakistan equitably.

Two days ago, a tender was awarded for the construction of the 330 MW Kishan Ganga Hydroelectric power project in which will be built on an Indian tributary (the Kishan Ganga) of the Jhelum River. Recalling Pakistan’s strong reservations on the Baglihar Dam project on the Indian side of the Chenab River in 2005 (the dispute went to the World Bank for neutral adjudication) and the Tulbul project which was abandoned in the 1980s due to Pakistan’s objections, India is pushing to complete its project before it falls prey to this political minefield. But this is where the dispute gets interesting. Pakistan has announced a similar project on the Pakistani side of the Jhelum because according to the treaty, the country that completes the project first will win the rights to the river. And so, despite costing 68% more than foreseen, India has pulled out all the stops to get the project finished first.

Nationally, the incumbent coalition is reluctant to implement a project meant to interlink India’s major rivers that was initiated by the opposition. Indian states are notorious for fighting over water rights (remember the Cauvery river water dispute between Karnataka and Tamil Nadu that dragged on for over a decade?) forcing the central government to arbitrate settlements on a number of occasions. Most of the major metropolitan areas, are also increasingly facing acute water shortages. Mismanagement of resources, unbalanced growth and inequitable distribution, soaring demands and corruption are just a few reasons behind these recurring issues. Water is surely a political issue, but it keeps falling prey to unnecessary politicisation which results in the common man losing out.

Going beyond rhetoric

India needs to properly integrate its water resources and set up better regulatory mechanisms that monitor water use efficiency. To fully develop its hydropower capacities, it will have to resolve a number of issues: water rights, displacement of people due to water projects, environmental consequences of hydropower projects. Additionally, India will have to greatly increase its water storage capacities, keeping in mind the fact that although storage schemes may make economic sense, they are often politically volatile.

In terms of renewable energy alternatives such as ethanol or biodiesel, India will have to devise alternate methods of production that are not water intensive. Finally, although India has decided to set up a National Water Mission as part of its climate change initiative, water is essentially still a state issue and so states need to step up. Environmental audits need to be taken seriously. Only in states like Himachal Pradesh, where the environment is crucial to their very survival is a climate change policy being drawn out.

This is a big year for India: the national elections are coming up, various green energy summits are being hosted and the private sector is gearing up as well. We’ll just have to see if India’s water woes are addressed, or will they once again become a rarely kept election promise.

Yesterday the House of Representatives approved President Obama’s $819 billion economic recovery plan (the vote was supported by all but 11 Democrats, with 177 Republicans voting against).

As anyone following the recent events in the US will know, this package places a strong emphasis on ‘green’ development - stimulating economic growth while increasing investment in environmental solutions. The large - and revolutionary - increase in the investment in renewable energy (the original proposal included $32 billion to “transform the nation’s energy transmission, distribution, and production systems by allowing for a smarter and better grid and focusing investment in renewable technology” ) was hailed by environmentalists across the board.

Somewhat less attention was paid to the big investment planned (about $20 billion) to increase energy efficiency in public housing and private homes. This of course reduces American dependence on foreign oil, a favorite mantra, even further; but it will also make improving home and businesses energy efficiency accessible to anyone, which will in turn demonstrate how reducing CO2 emissions is not just about climate change and future generations but also makes financial sense in the here and now. Finally, being efficient won’t be just for the environmentalists.

But what about public transport? While $30 billion was allocated for highway construction, with a further $36 billion added in separate spending programmes voted on yesterday by the House as well, a mere $10 billion were allocated for “transit and rail to reduce traffic congestion and gas consumption”.

The United States however is in need of a major overhaul in the way it approaches transportation infrastructure. According to a report by the Brookings Institute the US is “one of the few industrialized countries that fails to link aviation, freight rail, mass transit and passenger rail networks“, and reliance on private cars is so great, that only a substantial shift in attitudes, both by the public and the government, will bring the change needed for a more sustainable transportation infrastructure.

This deep rooted change will apparently have to wait for now, but hopefully only a little while longer.

Photo courtesy of CFE

In October 2008, Mexican Congress passed the Law for the use of Renewable Energy (Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética) . While Maria Galindo discussed the political difficulties to turn this law into action, I will consider the question whether this Law is in fact, unconstitutional as some Congressman like to think.

Mexico’s constitution (Article 27) places sole responsibility of electricity generation into the hands of the Federal state. Moreover, the Federal Commission for Electricity (CFE)  -state-owned enterprise and responsible for two-thirds of Mexico’s energy generation and transmission, as well as the planning for energy provision-, is bound by this article to provide energy at the least-cost option. While the Ministry of Energy (SENER) could in theory specify how to interpret this clause, it has in the past adopted a very narrow definition based solely on financial variables.
This has favoured the development of conventional sources of non-renewable energy, especially gas and coal, whose use for electricity generation is expected to rise by 100% and 50% respectively by 2014, (Perspectiva del Sector Eléctrico 2005 - 2014) (Currently, gas represents about 19% of total generation and coal about 10%, while 49% of generation are produced by oil combustion.)

Private energy generation made an entry, with President Salina’s (1988-1994) highly controversial privatization and market liberalization policies. These policies provided a degree of space to self-suppliers, cogeneration and small-scale energy producers to generate and supply power into the grid. Since then, deeper and more thorough market reforms of the electricity sector such as tabled under past President Vicente Fox (2000-2006) failed due to strong resistance to open the market to private participation and threaten the least cost provision of electricity. Nevertheless, private power currently accounts for 30% of Mexican energy generation.
The increase in renewable energy generation has been hampered by a suite of systemic and institutional barriers:

1. private sector power generators face prices depressed by subsidies to the state companies (CFE and Luz y Fuerza), that do not reflect costs of electricity generation. This explains the proliferation of self-suppliers to commercial and industrial entities which overall pay higher electricity prices.
2. the construction of renewable energy plants involves high transaction costs, which make them largely unfeasible. These include applications for generation permits; the agreement of land or water leases from the legal owner; in many cases, the owner does not hold the deeds to his land, and thus has to go through the processes before a lease can be acquired; the political groundwork and obstacles that have already mentioned in Maria’s blog; and last but not least, charges levied by the CFE for the transmission and if necessary backup electricity which can reach up to 15 to 30% of the prices that power generation receive.

To scale up private sector participation and pave the way to meaningfully develop renewable energy supplies requires a legal basis that not only opens the market and creates greater investment security to the private sector but also re-interprets the least-cost clause to facilitate renewable energy generation by the public sector. The above mentioned Law is a step in the right direction:
Apart from setting a legal target for the share of renewable energy to be achieved, the law paves the way for an increased participation of private sector providers in Mexico’s renewable energy market: although it does not introduce an outright feed-in tariff structure, it creates a hybrid system of financial and political incentives. With respect to financial incentives it obliges the CFE not only to purchase energy supplies generated through cogeneration, self-supply or small scale production but also to pay a compensation that is not determined by the least cost prices but include the cost of the electricity generation.

The law aims to reduce transaction costs that the private sector faces, allowing SENER in conjunction with States and municipalities to simplify access to areas that are favourable to the development of renewable energy and simplify the process to obtain permits. Further, the law establishes the Green Fund to support projects that comply with the objectives of the Renewable Energy Strategy.

Does the law violate the least-cost clause of the constitution? The key to answer this question is the definition of least-cost. In the past SENER defined least-cost merely in financial terms considering costs of energy generation. Yet, the concept of least-cost can and is currently broadened by SENER to include the costs or benefits of energy diversification, and future stability of supply, environmental externalities, tax and other financial considerations for different energy types as for example carbon revenues. Thus, least cost not only has to take into consideration the actual cost of electricity generation but indirect costs and benefits associated with different types of electricity generation schemes.

Even if the Law has been approved, the actual modalities and specifications will need to be elaborated in the pertaining Programme and Strategy for Renewable Energy Provision (Programma y Estrategia Nacional para el Aprovechamiento de Energía Renovable y Transición Energética). Not just the contents but also the speed with which these will be developed will strongly determine the effectiveness and efficiency with which the law will be turned into action. In this respect, the fact that it took a whole three years until the Initiative for the Law -approved in December 2005-, was approved as law, serves as indicator for the degree of resistance that the development of the actual strategy and programme are likely to receive. This resistance is based on an incomplete and short-sighted assessment of costs and benefits of different electricity generation schemes that if not revised will severely impede Mexico’s ability to achieve electricity coverage targets while meeting social, economic and environmental goals in the future. Ultimately, sticking to conventional energy generation systems will violate the constitutional rights of least cost energy supply of future generations.

After years of planning and scores of proposals, attempts to generate renewable electricity from the Severn estuary drew a step closer this week; as the Energy and Climate Change Minister, Ed Milliband, unveiled the 5 diverse, but technically feasible shortlisted proposals. They range from the colossal 10 mile barrage that would block the entire Severn estuary to the relatively discreet series of lagoons with would harness the ebb and flow of the tide to generate electricity. With the common aim of becoming Britain’s single biggest source of electricity, the project could generate as much as 8GW, replacing around 4-5 polluting coal-fired power stations.

The five proposals are:

1. Cardiff-Weston Barrage - 10-mile scheme costing up to £22bn could generate as much as 8.6GW - 5% of the UK’s energy needs

2. Shoots Barrage - Would generate around 1.05GW - equivalent to a large fossil fuel plant

3. Beachley Barrage - A small scheme which would generate around 0.625GW

4. Bridgewater Bay Lagoon - Would enclose a section of the english coast. Could generate 1.36GW

5. Fleming Lagoon - Would enclose a section of the Welsh coast. Could generate 1.36GW

“The largest proposal to harness the power of the tides on the shortlist could save as much carbon dioxide as all the residential emissions from Wales.” Ed Milliband, UK Minister for Energy and Climate Change. 

In addition, a further 10 proposals which did not make the shortlist have been allocated a share of £500,000, to develop ‘embryonic technologies’ including tidal reefs and tidal fencing. 

Harnessing renewable electricity from the Severn estuary, which has a tidal range of up to 14 metres (second largest in the world) would make a significant contribution to the UK’s commitment to generate 20% of energy consumption from renewable sources by 2020, whilst also increasing Britain’s energy security. However, environmental campaigners who are largely in favour of renewable energy generation from the estuary remain were dismayed that smaller more wildlife-friendly schemes were sidelined in favour of these larger projects, which threaten to destroy the areas biodiversity. 

Jonathan Porritt, Chairman of the UK Sustainable Development Commission which has advised the government on the Severn project, added that this polarisation of views remains “daunting“. The question is - are we willing to embrace a huge source of low carbon and secure energy at the detriment of the local biodiversity? Some supporters of the scheme argue that in light of the global climate change issue, such significant steps to decarbonise our consumption, would render other environmental concerns as irrelevant. However, those championing the environmental concerns argue that the consequences of irreparable change to these habitats, not to mention the political preferences set by the strong likelihood of breaching the EU directives protecting them, would be so dire as to negate the benefits of clean, renewable energy offered by the Severn. Ed Milliband added that…

“We have tough choices to make. Failing to act on climate change could see catastrophic effects on the environment and its wildlife, but the estuary itself is a protected environment, home to vulnerable species including birds and fish. We need to think about how to balance the value of this unique natural environment against the long-term threat of global climate change.”

The 3 month public consultation has now started. Whilst the final decision isn’t expected until 2010, it is interesting to note in the meantime that the “now or never” mindset is being adopted by a growing number, in light of tighter targets to address global climate change (through renewable options providing oil independence), which is really driving this project.

 Thinking about climate change effects, we often picture disastrous environmental consequences, threats to iconic species, as well as necessary changes in our way of life and economy. But it has, up until now, often been neglected that climate change costs can go way beyond that and undermine the system that support our healthcare and our very survival.

The Australian Medical Association had since 2004 warned for the health effects of climate change and called for it to become not only an environmental but also a public health priority. The Australian Government eventually heard their call as Climate Change Minister, Senator Penny Wong, announced on January 27, 2009 the launch of a new AU$ 10 million research project on climate change health effects, collaboratively led by the Australian National University and the Commonwealth Scientific and Industrial Research Organisation. (Source: SMH 27/01/09)

The National Adaptation Research Plan for Human Health and Climate Change, which sets out Australia’s research priorities for the next five years, highlights possible health effects of climate change. Some impacts will occur via direct-acting pathways, such as injuries or death caused by extreme climate events like floods, heat waves or bushfires. Yet many others are likely to occur through climatic influence on ecological, biological and social systems. This includes, for example, altered food production, respiratory and water born diseases, and the recrudescence of arboviruses transmitted by mosquitoes. Climate change could therefore alter the redistribution of diseases and see the emergence of new ones. Senator Wong agreed that:

“By 2020, for example, the number of heat-related deaths in our capital cities is projected to double to about 2300 a year. We are likely to see more food-safety related illness and dengue fever is likely to spread southwards.” (Source: Media Release, Department for the Environment)

Research will focus on physical and mental health issues linked to heat, extreme weather, insect-borne diseases and food safety.

It is the first time the National Health and Medical Research Council has listed climate change in its funding guidelines, illustrating a shift to a more global and interdisciplinary approach to climate change adaptation strategies in the country.

But identifying new health threats will not be enough, the Government will have to make sure that trained health professionals and adapted healthcare facilities will be available to face future acute health demands.

Photo Credit: German Ministry for the Environment

The International Renewable Energy Agency (IRENA) is born. It has been officially launched in a Conference held in Bonn and is sponsored by Germany. So far, 80 Countries have manifested their intention to participate in the new international mechanism. It is expected that half of them will sign its founding treaty (see SustainableBusiness.com’s article).

It is only a couple of letters away from the well established International Energy Agency (IEA). What is more, it even shares the fundamental DNA of the IEA as it seeks to “foster human development and economic growth with a secure, affordable, reliable, clean and sustainable energy supply” (my emphasis).

What does this mean for the future of renewable energy ?

As stated on its webpage, “IRENA aims at becoming the main driving force in promoting a rapid transition towards the widespread and sustainable use of renewable energy on a global scale.” (see full brochure). As of now, a plurality of organisms, donor agencies and multilateral bodies share this precise aim. This plurality results in inefficient overlapping of initiatives, sometimes with two similar projects being implemented in the same country with little or no coordination between them. IRENA as a main driving force is thus good news.

This aim will be fostered by : (1) Institutional capacity-building (enabling regulatory frameworks, fostering of policy dialogues between stakeholders, (2) Information sharing (benchmark/best practice, feasibility studies/tools) and (3) Technical and Financial assistance. All these elements are crucial, especially when it comes to busting barriers preventing the growth of renewable/clean energy in developing country. Even in some developed countries, the potential for renewable energy can be left severely untapped because of barriers such as lack of expertise, lack of an enabling incentive structure for investments in renewable energy, etc.

The IRENA will have to inspire its action by what has been done in the past while letting go of cumbersome approaches. If it is to succeed, market tools aimed at the incubation of sustainable markets for sustainable energies will have to be used in conjunction will classic technical assistance and capacity-building. Initiatives such as UNEP’s African Rural Energy Enterprise Development (AREED) and Renewable Energy and Energy Efficiency’s (REEEP) various market approach (such as financial risk mitigation tools) will have to be explored.

With the United States back in green business, Europeans eager to ease energy dependency, developing countries hoping to benefit from technology transfer and emerging countries looking for new commercial niches, the potential for a powerful synergy is indubitable. Welcome, IRENA!

Sometimes, no news is good news. In a week in which Obama gave US states the ability to enforce tough new standards on car fuel efficiency and emissions, German policymakers managed a last minute turnaround to prevent doing the opposite. The audacity of claiming a shift to environmentally friendly car taxation, while preparing a tax model that would have more than halved taxation for the worst polluting SUVs, was breathtaking. Luckily some in Germany’s governing coalition, namely Sigmar Gabriel, minister for the environment, and Wolfgang Tiefensee, minister for transport, both SPD, must realised the impact this would have with voters, both those interested in climate change and those who questioned why they had to pay the same, while those driving 500hp SUV got a hefty discount. In the end a compromise was found, whose central characteristic is that it will mean every kind of car essentially paying what it is paying now. This was criticised by the LINKE party and environmental NGOs as a ‘wrong signal’ because it did not in fact raise taxation for more polluting vehicles. Yet, one could be forgiven, given recent experience with Germany’s Grand Coalition to give a sign of relief at the fact that things haven’t become even worse.

On a related note, this week brought out a few other interesting bits of information. DEKRA, an car testing association published a report showing that 92 percent of drivers are willing to change to an ‘Umweltauto’, even if it means a smaller range, worse driving performance, or shorter service intervals. Unfortunately, they didn’t ask how much more people were willing to pay…

Another report, this time written by Roland Berger, a consultancy, for the government of the state of Saxony, shows the economic potential of environmental technology. This industry grew by 17 percent in 2007, employs 18.000 people in Saxony alone, and already contributes 6 percent to the states GDP. And, encouragingly, even in the current economic climate the outlook of the companies asked remained positive. Adding to the good news, for the economy and the climate, was the association of energy and water utilities BDEW, stating that renewable energy covered more than 15 percent of total German electricity consumption. This means Germany is already fulfilling the EU renewable energy targets, and, given that much of the technology is produced in Germany, highlights the positive economic impacts courageous action on climate change can have.

Last year, The Climate Group’s SMART 2020 report  revealed the Information Communication Technology (ICT) industry has carbon footprint equaling that of the global aviation industry- contributing approximately 2% of global CO2 emissions (Related Climatico blog- aviation emissions). However, the main conclusions of the report were more positive–noting “ICT’s largest influence will be by enabling energy efficiencies in other sectors” (Source).” India’s own ICT sector India contributes to nearly 5% of its overall GDP (in 2006) and projected to grow. In India, ‘greening’ IT is one of the fastest growing trends in the industry eager to provide services of energy efficient hardware, energy management software, and eco-friendly computing.  

While there is no explicit inclusion of ICT strategies in India’s National Mission for Enhanced Energy Efficiency (NMEE) one of eight missions under the government’s National Action Plan on Climate Change (NAPoCC), the government and industry has utilized the NMEEE and global market demand for establishing an “energy internet” industry (from Thomas L Friedman’s latest book Hot, Flat, and Crowded- “when IT meets ET”).

Promoting ESCos- Energy Service Companies

For example, under the NMEEE, the Indian Government is attempting to India’s Chamber of Commerce, under its Energy Efficiency Initiative, has sought to expand the number of ESCos in India. ESCos (Energy Service Companies) are businesses designed to provide energy efficiency services for companies by specializing in energy audit and implementation of energy efficiency schemesIndia’s Bureau of Energy Efficiency (housed under the Ministry of Power, and key institutional body for NMEEE initiatives), has also sought to strengthen ESCos role in enhancing energy efficiency. In addition, BEE published a list of accredited ESCos to encourage energy utilization schemes and provide standardization and credibility for the ESCo industry. Lastly, the Government is looking into schemes which ESCos receive tax exemptions to further enhance energy efficiency practices.

Telecom Green Credit Market

Building a Power ‘Smart’ Grid

Given such a potential, it is disappointing that the Indian Government has not focused further attention in this avenue. Progress in smart grid technology and infrastructure has been slow and lacks government support. Instead, private businesses are looking to smart grid concepts but only in research and development phases (IBM adds North Delhi Power Limited to its network coalition of utilities) given the uncertainty and extensive investment costs which would be required to restructure the power system.   

Ministry of Power (India). http://www.powermin.nic.in/JSP_SERVLETS/internal.jsp

Interestingly, the SMART 2020 report, noted that ICT initiatives could significantly improve India’s power sector, reducing transmission and distribution losses by 30%, by creating a ‘power smart grids.’ Smart grid infrastructures- one where customers and power utilities ‘communicate’ so that power is efficiently distributed through various mechanisms such as returning power to grids when not using or coupling solar/wind/hydro power with grids- require revolutionary changes to the power infrastructure. However, India’s use solar power to decentralize power for remote villages can be starting points for establishing smart power grid systems. Ironically, such an effort would address two National Missions in the NAPoCC: Solar and Enhanced Energy Efficiency.