Rs. 100,000 Crore Energy Services Sector Seeks Strong Policy Push, Market Maker

Rs. 100,000 Crore Energy Services Sector  Seeks Strong Policy Push, Market Maker

India’s energy efficiency market has had a stunted growth despite immense potential. According to a September 2017 AEEE (Alliance for an Energy Efficient Economy) report, “Lack of access to financing, lack of a strong policy level push and lack of trust within the ecosystem emerge as the biggest challenges of the ESCO market.”

How has this impacted the growth of the ESCO market? “For a market potential that is estimated anywhere between $10 billion and $35 billion, the combined revenue of ESCO players (in 2016) is only quarter billion.”

The ESCO market is plagued by lack of trust in the ecosystem which is accentuated by “lack of access to credible market data, standardization of technology-specific solutions, tight contractual frameworks and legal enforcements.” The AEEE report, the players say, is its first step in transforming the sector by facilitating interactions with policy makers, financial institutions and customers.

Market Size

AEEE’s survey shows a market size of between Rs. 93,000 crore to Rs. 120,000 crore from commercial buildings, industries, agriculture and municipalities. A critical element in accessing this market, the report notes, is standardization of technologies to drive scale. The other important element is lower transaction cost for both the ESCOs and financial institutions.

Recommendations

  1. Creation of a nation-wide energy efficiency data repository with benchmarks
  2. Creation of standardized solutions to build trust and enable scale in the market
  3. Creation of a technology-enabled energy efficiency collaboration and marketplace platform
  4. Modification of ESCO accreditation process to enhance confidence and credibility
  5. Creation of a neutral ESCO market enablement entity for awareness and facilitation

The AEEE strongly believes that energy efficiency measures are the most cost-effective ways of decarbonising the Indian economy. Done well, it has immense positive impact on social and economic transformation. “For India to achieve universal energy access without exhausting existing energy sources and (greater imports), it is essential to inculcate a robust EE market.”

www.aeee.in

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