| Work Detail |
Saurabh Kumar, Managing Director of Energy Efficiency Services Ltd (EESL) is working hard to implement the governments massive energy efficiency drive through electric vehicles, LED lighting, smart meters, demand side management and other measures. In an exclusive interview with ETEnergyWorld, he shares a perspective on why EESLs business model is a major hit and how the efficiency wave has progressed across the energy sector. Edited excerpts..
EESL is credited with playing a major role in bringing energy efficiency to the fore. What have been the key learnings?
The basic ethos of EESL revolve around a service model based on “pay as you save”. Any new initiative on energy efficiency is likely to be costlier than the traditional non-efficient model. For example, an LED bulb in 2014 used to cost Rs 500. There are two major challenges for the adoption of any new technology – it comes costly and there is lack of knowledge about its comparative benefits. The “Pay as you save” model breaks these barriers. Under this model, we asked the consumer to replace 14 Watt CFL with 7 Watt LED and save cost and they can pay a certain sum annually. But if the bulb fuses any time over three years, we replace it free of cost. This way we reduce the cost of the product and also the barrier for lack of information is breached. We were able to adjust this model in terms of paybacks based on the cost of LEDs.
In 2014, when we procured the first set of 6 lakh LEDs, the cost was Rs 310. We were locked into a 10-year agreement with Puducherry. Enough had been said and written about energy efficiency by then. But there was no concrete action on the ground. So, as a company we took a calculated risk knowing full well that we may not be able to recover 30-40 per cent of the investment. The moment we did that, the Rs 6 lakh order in Puducherry led way to a Rs 60 lakh order from Andhra Pradesh in 2014. Today, we have supplied 30 crore LED bulbs across multiple states. And this model has incentives for everyone. The customer is incentivised because he does not end up paying anything extra. The manufacturers are happy because we give them a consolidated volume. The government is happy because it does not have to subsidize anything and energy efficiency goes up. Discoms are happy because they are able to manage their peak load. This is why it got promoted and scaled up so quickly. This model is so robust that it applies to Electric Vehicles too. The basic financial model is exactly the same whether you apply it to a smart meter, street lighting or buildings. It has to reduce energy consumption and make some difference in reducing expenditure. |
