Can India Improve Energy Efficiency as Its Economy Booms?

National Energy Conservation Painting CompetitionIn India, new building codes, appliance eco-labels, and conservation contests are all bringing energy efficiency to the national agenda. Some citizens have even adopted an energy-conscious pledge—“Saving electricity is my national duty”—agreeing to switch off appliances and use energy-saving light bulbs. But beyond the rhetoric, India’s efforts to improve energy efficiency have been slow and often frustrating, analysts say.

India’s coal industry, for example, ranks among the least efficient in the industrialized world. Energy efficiency is especially critical to the country of 1.1 billion as it seeks to expand access to electricity. Roughly 70 percent of rural areas lack electricity, and about 40 percent of firms in India rely on their own generators due to unstable power supply. The International Energy Agency projects that India’s energy demand will double by 2030.

To guide this uphill battle, the World Bank’s International Finance Corporation, the Alliance to Save Energy, and India’s Bureau of Energy Efficiency last week released a new guide to help public facilities and smaller businesses throughout India reduce their energy demands and costs. The plan relies heavily on companies that provide free services to improve energy efficiency and later collect the energy savings as payment.

These companies, called Energy Service Companies, or ESCOs, have proven particularly successful when they receive government support. The U.S. federal government relied on ESCOs in the 1970s for many government contracts. And in the late 1990s, the Chinese government “was adamant” that its private sector use ESCOs to improve energy efficiency, said Bob Taylor, the World Bank’s energy sector leader for East Asia and Pacific Region.


“We found if you try to go without any government support, it’s pretty tough,” said Taylor, lead author of Financing Energy Efficiency: Lessons from Brazil, China, India, and Beyond. “India is a pretty good example of how tough it is.”


The new manual provides step-by-step procedures that aim to encourage cooperation between municipalities and ESCOs on projects such as water supply, street lighting, and building design. Once municipalities understand procedures, “it will hopefully promote their interest in borrowing money [for energy efficiency],” said Alexander Filippov, an Alliance to Save Energy senior project manager.


The World Bank helped publish a similar book in 2005. Still, little progress has been made to improve energy conservation in India’s thousands of public buildings. “The existence of a manual by itself is not enough,” said Jeremy Levin, a World Bank energy consultant who specializes in India. “Follow-up investment programs are required to ensure that energy savings are actually achieved.”


Ben Block is a staff writer at the Worldwatch Institute who covers everything environmental for Eye on Earth. He can be reached at