U.S.-India Cooperation on Demand-Side Management (DSM): Expanding Maharashtra and Delhi Programs to National Level

The Indian government has promoted energy efficiency through initiatives such as equipment labels, outreach activities, and voluntary building codes. Occasionally, it has implemented DSM pilot programs. Beginning in December 2007, Lawrence Berkeley National Laboratory in collaboration with the California Public Utilities Commission and the California Energy Commission signed three agreements to promote DSM programs in two states, Maharashtra and Delhi, and at the national level. In December 2009, the Indian government announced that the National Mission on Enhanced Energy Efficiency (NMEEE) will be implemented from April 1, 2010. Four key approaches are envisioned under NMEEE – creation of market for tradable energy savings certificates for large industrial customers, market transformation, creation of financing platform to facilitate ESCO activity, and development of broader economic framework (e.g. tax incentives, public procurement, etc.) to support EE. In this paper, we focus on the market transformation approach included in the NMEEE. We discuss how the NMEEE can foster ongoing EE activities in India – for example, DSM programs initiated by regulatory commissions, administered by utilities, and funded by ratepayers. We provide an overview of the existing institutions, legal and regulatory framework, availability and capability of EE workforce, and the financial infrastructure that can support EE. Based on our experience in India in design and implementation of DSM programs, we identify missing elements that are necessary for delivering EE and achieving the potential estimated in the NMEEE. We present a critical review of previous EE initiatives in India. Finally, for Indian policymakers, we suggest a road-map that incorporates the NMEEE and would be critical for rapidly achieving all cost-effective CO2 reductions through EE.