India Lights Future with Efficient Lamps and Carbon Credits

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In a new blog entry, Worldwatch Senior Advisor Damandeep Singh reports on a new project to replace 400 million inefficient, incandescent light bulbs across India with energy-saving compact fluorescent lamp (CFL) bulbs, one of the largest carbon credit projects ever attempted.

CFL BangaloreFrom the world's second-most populous country comes one of the biggest carbon credit projects. India seeks to replace 400 million inefficient, incandescent light bulbs with energy-saving compact fluorescent lamp (CFL) bulbs at a considerably reduced price to the consumer. In the bargain, India is expected to avoid the emission of 40 million tonnes of carbon dioxide.

The Bachat Lamp Yojana (BLY) project, which translates to Savings Program through Lamps, promises to lower the price of CFLs to Rs 15 (about US $0.33) each, instead of the current market price of Rs 100 (US $ 2.10). The United Nations approved the project on April 29 as part of the Clean Development Mechanism (CDM), a Kyoto Protocol tool that allows industrialized countries to meet their carbon emission reduction targets by paying for greenhouse gas emission reductions in developing countries.

Ajay Mathur, director general of the Bureau of Energy Efficiency (BEE), the Indian agency responsible for the project, was quoted in the media as saying: "Almost half the households in India will immediately benefit from the scheme, and as other areas get electrified, those villages will get added on."

The BLY project is based on the premise that every 10 lamps replaced equal one ton of avoided emissions, the equivalent of one carbon credit. "The current penetration of CFLs in the household sector remains low at about 5-10 per cent, largely due to the high price of the CFLs, which is 8-10 times the cost of incandescent bulbs. The BLY focuses on this first cost barrier to reduce the cost of CFLs to that of incandescent bulbs for consumers," Mathur said. "At Rs 15 apiece for CFLs, the BLY is a win-win situation for all. Consumers will not only be able to save on their electricity bills but also help meet the energy efficiency targets of the country."

The domestic appliances and lighting sector accounts for almost 22 percent of the total electricity demand in India, contributing almost fully to recent increases in electricity demand.  BEE estimates that more than 400 million light points in India use incandescent lamps, an extremely energy inefficient form of lighting with just 5 percent of the electricity input converted to light. The project seeks to replace all these with the efficient CFL lamps.

The BLY scheme provides a unique platform for a healthy public-private partnership between the government of India, private sector CFL suppliers, and state-level electricity distribution companies. Under the scheme, 60-Watt and 100-Watt incandescent lamps will be replaced with 11- to 15-Watt and 20- or 25-Watt CFLs, respectively. BEE will monitor each project area as required under an approved methodology of CDM.

In 2008, 734 million incandescent lamps were sold in India, whereas CFL sales were only 199 million. The combined penetration share of incandescent lamps for lighting in the commercial and residential sectors was nearly 80 percent.

Companies like the Washington DC-based C-Quest Capital, a carbon finance business, are already investing in  the project, according to media reports. Initial investments are located in the southern state of Andhra Pradesh and at least eight more projects are underway.

Visit Worldwatch's Re-Volt blog to learn more about India's low-carbon development strategy.

Damandeep Singh is a senior advisor with the Worldwatch Institute.

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