The vast potential of energy efficiency in India

Five times cheaper than nuclear power

A recent study by the World Resources Institute (WRI) calculated that India could reduce its annual electricity usage by 183.5 billion kWh by investing US$ 10 billion in energy efficiency improvements.

India’s energy demand is expected to more than double by 2030. The country is consequently in need of a huge amount of new power generation capacity. Considering the figures of the WRI, the cheapest generating capacity for India will no doubt be energy savings.

An annual production of 183.5 billion kWh corresponds more or less to 25 nuclear power stations of 1,000 MW (producing 7,500 GWh/y each). According to nuclearinfo.net, the construction of third generation nuclear power stations in Japan cost around US$ 2 billion for a single 1,000 MW plant. This means 25 nuclear power plants would cost US$ 50 billion, making nuclear power 5 times more expensive than the calculated cost of energy savings.

However, the biggest barrier for energy efficiency improvement in India is not cost, but the availability of qualified technology, products, and people. According to Robin Murphy, WRI vice president of external relations, India is desperately in need of energy efficiency technology providers, equipment manufacturers, and — above all — energy service providers (ESCOs). Despite the rapid growth rate of the ESCO sector in India (an annual growth rate of 62% in 2008), this sector is still far too small for the country to aspire to effectively harvesting its huge energy savings potential.