Constructing Change by Advancing Energy
Efficiency
In a power-deficit country like India, energy
efficiency can be a new kind of power plant that provides energy to millions
who do not have access to it, and where economic growth can be driven by the
savings from energy efficiency
A
watershed event in human history took place in 2008, when the urban population
of the world outnumbered that of the rural. Cities, which occupy a miniscule 0.05
percent of the earth’s surface, are projected to hold an immense 80
percent of the world’s total population by the end of the twenty-first century. In India too, the rate of urbanization is
unprecedented and two-thirds of the commercial and high-rise residential
structures that will exist in the country in 2030 are yet to be built.
This urban sprawl is creating unique challenges related to the natural
environment. As a result, to prepare for the coming decades, policy makers need
to think innovatively about planning for and taking action on a range of issues
from ecological and energy implications to protecting public health. The
current urban sprawl and unparalleled demand for the construction of buildings is
also creating vast opportunities. Buildings already account for more than 30
percent of India’s total electricity consumption. Looking ahead, India’s
building sector is expected
to increase five-fold from 2005
to 2050. India is thus at a unique
crossroads with a singular opportunity to lock in energy and cost savings for
the next several decades by implementing energy efficiency in buildings
that are being constructed now.
The
imperative for efficient construction is much more crucial than the individual
savings from which owners and
end-users benefit. India’s
total energy requirement is projected to grow at 6.5 percent per year between
2010-11 and 2016-17, to support the country’s projected 9 percent growth rate.
The meeting of this energy demand, however, is fraught with the challenges of peak
electricity demand shortages, dependence on energy imports and vulnerability to
the volatility in international energy prices. Furthermore, India is en route
to becoming the world’s second largest emitter of greenhouse gases and is already
experiencing the adverse impacts of climate change. Each of these challenges
can be addressed significantly and effectively by making energy efficiency a central plank in the country’s long-term growth
planning.
To
create this transformation in India’s building sector, action is required by a
variety of public and private decision makers. Two groups in particular are
critical to this effort: state and local governments, and real estate
developers.
First,
in the current policy climate, state and local governments are beginning to
promote energy efficiency initiatives. India’s National Action Plan on Climate Change
(2008) points to building efficiency
measures as essential to carbon
emission reduction. Several national missions that focus on scaling building
efficiency have also been initiated, such as the National Mission on
Sustainable Habitat and National Mission on Enhanced Energy Efficiency. Effective
execution of these national and state level programs will be the key
determinants of their success.
State
and local governments are vital for setting standards and supporting market
leaders to accelerate energy efficiency. States across India are recognizing the
importance of taking steps in this direction, for instance, by advancing plans
to make building energy codes operational. The Bureau of Energy Efficiency launched
the Energy Conservation Building Code (ECBC) for India in 2007. The ECBC
establishes minimum requirements for energy efficient design and construction for buildings with a connected load of 100
kW/120 kVA or more and provides guidelines for building design, including the
building envelope (walls, windows), lighting, heating, air-conditioning and
electrical systems. States such as Andhra Pradesh, Gujarat, Haryana,
Karnataka, Maharashtra, New Delhi, Odisha, Rajasthan, Tamil Nadu, Uttar Pradesh
and West Bengal have all committed to advancing plans to make the ECBC
operational in 2013 for new construction. Across the country, the tremendous
benefits to be gained from ECBC adoption are being recognized by these states,
as seen in the following graphic. Clear frameworks such as the ECBC can provide
a necessary baseline for measuring energy efficiency benefits and success at the state and country level.
ECBC
Graphic -
Leadership
by state and local governments is crucial to effectively overcome barriers and
transform the building market to be cost-saving. Making the ECBC mandatory and
implementing an effective compliance mechanism will ensure that all newly
constructed energy guzzling buildings meet at least a minimum level of efficiency in their energy use. Along with the adoption
of the building energy code, an enabling environment for code implementation
and compliance is equally important. This is particularly relevant for the India.
State governments can create environments that are conducive to code compliance
by following a number of best practices. For example, the ECBC can be adapted
to the state’s local climate conditions, so that it is applicable to the
climactic conditions of the geography in which it is being implemented. States
can also form local steering committees that oversee ECBC implementation and ensure
that the code is incorporated into the region’s local laws. Another key factor
is creating a skilled workforce with the knowledge base needed to check for
quality control and effective building energy code implementation. States can
develop this human capital by training municipal officers and empanelling
professionals such as architects and engineers on code technicalities.
Universities, professional organizations and non-profit groups can assist in providing such training. Government agencies can also
award developers with the “most
efficient building” to
drive market competition, and
consider providing policy incentives to both developers and tenants or buyers who implement energy efficiency in new or
retrofitted construction. In
all cases, having structures in place for monitoring energy use and
code-implementation are key to the successful uptake of efficient construction by the community.
Second,
on the business side, real estate developers drive the demand for building
construction. As coordinators of property development -from purchasing land,
financing deals and contracting with
builders- developers have a large
influence over the market’s adoption of efficiency practices. By becoming spokespersons for the business case of energy efficiency and
through showcasing their first hand
experience of energy savings from buildings, developers will enable other
builders across India’s booming
cities to benefit from cost and
energy savings for the coming decades.
Real
estate market players across the globe are recognizing the opportunities from
energy efficiency and the increasing market demand for green buildings. The benefits to developers from investing
in energy efficiency are also
becoming more prevalent. These include: the energy and cost savings from
reduced utility bills and reduced installations of diesel generators for
back-up power; increased tenant demand by customers who are willing to pay higher rents for efficient buildings; and market leadership opportunities for
developers who are ahead of the curve
as local efficiency codes (such as
the ECBC) become mandatory in the next two years. India’s real estate
developers increasingly recognize the opportunities from being part of this
forward-looking trend that demands world-class energy-savings in commercial and
residential spaces.
Currently,
real estate developers at the local and national level lack awareness about the
substantial financial and competitive edge benefits to them from energy efficiency. This is one of the primary obstacles to rapid efficiency adoption. To move the market towards energy-saving buildings,
developers can take action steps such as building awareness about the cost
saving and market advantage opportunities from efficiency through peer to peer
education amongst their community. Developers are ultimately driven by the financial advantage, and champion developers can showcase
the business case for energy efficiency through joint case studies with
developer associations and independent third-party organizations. Such studies
can analyze the measured energy savings after an energy efficiency upgrade in
buildings or portfolios of buildings. On the financing front, developers can leverage
their relationships with financial institutions and banks to create and publicize financing mechanisms that incentivize energy
efficiency investment by developers and end-users during building construction,
purchase and upgrade. This is important since the higher upfront cost of energy
efficiency investments
can often be a deterrent to builders,
even though the investment pays for itself over time and eventually results in
higher cumulative savings. Developers can also work with local governments on
policies to provide regulatory incentives to the real estate community that
will encourage them to make
efficiency investments. This
includes creating innovative energy-aligned leases that equally distribute the
savings from energy efficiency between the landlord and tenant, so that the savings from efficiency are reaped by the investor. Internationally, progressive
developers are signing such energy-aligned or green leases with their
tenants, which results in both
parties benefiting
from reduced costs. Overall, having energy efficiency spokespersons from the real estate community is crucial to helping
India achieve a reliable energy future while simultaneously significantly befitting the developer community.
As India
builds at an unprecedented rate in next few decades, there will be increasing demands
for new infrastructure that is
energy efficient, high performing and
cost-saving. At the same time, the demand for energy will continue to rise,
increasing the pressure on the already strained electricity infrastructure.
Learning from the worst power crisis in history during the summer of 2012, the
national and state governments are ramping up support of clean investment, including
in buildings, to enable effective responses to India’s energy crisis. By
implementing smart design features, better lighting, energy-efficient air conditioning and other cost-effective technologies, state
governments and real estate developers can become champions that make business
and homeowners realize measurable savings on their energy bills. It is important
that stakeholders across the board recognize that energy efficiency is not just about saving energy, it is a new kind of energy source. In a power-deficit country like
India, energy efficiency can be a
new kind of power plant that provides energy to millions who do not have access
to it, and where economic growth can be driven by the savings from energy efficiency. It
is crucial to tap into this invisible resource of energy efficiency – which
will not only increase India’s energy security and save money but also help fight climate change, protect communities and the
environment.
Radhika Khosla : The author is with India Initiative, Natural Resource Defence Council
(NRDC). she has worked on Urban Climatology and building energy efficiency at the university of Chicago for her Ph.D.
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