National Mission on Enhance Energy Efficiency (NMEEE)

Research Team: Deepak Bawari
LEAD Centre: Centre for Development Finance (CDF)
Focus Area: Environment and Climate Change, Policy and Regulation
Project Geography: India
Partner:
Status:

Background:

India’s energy efficiency is fifth lowest in the world. This implies that the GDP to energy consumption ratio for India is very poor. Thus there is high scope of efficiency improvement. Apart, India imports 70% of the hydrocarbons used in the country. With shifts in global political environment, and the energy demand of other countries rising, India has to compete with energy hungry countries to ensure long term uninterrupted oil supplies. Thus there is strategic requirement that the country focuses on reducing the use of fossil fuels without compromising on growth and energy efficiency can make this possible.

Objectives:
•    The study looks into the mechanisms that are designed to promote energy efficiency at the national level.
•    Analysis of NMEEE status and issues related to market based efficiency improvement mechanisms, financing gaps and policy lacunas
•    Critical analysis of two major thrust areas of the NMEEE, market based instruments and energy service companies, provide inputs for emphasis on India centric approaches

Outcome:
The study provides a glimpse of the possibilities and problems pertaining to Indian industries and energy sector. Comparing the Indian policies and energy efficiency improvement mechanisms with that of international efforts the study points out that the internationally successful approaches have limited success in promoting energy efficiency in India; the emphasis of state on using market based solutions for achieving energy efficiency in industries is highly questionable given weak regulatory environment and financial support mechanism in India.
The study proposes an India centric approach for Energy Efficiency and provides recommendations on each of the mechanisms proposed under NMEEE.