Founded in 2009 by the government of India, Energy Efficiency Services Limited (EESL) is responsible for market related activities of the National Mission for Enhanced Energy Efficiency (NMEEE), one of the eight national missions under the Prime Minister’s National Action Plan on climate change. With an unprecedented 140 times growth in two years, EESL’s flagship initiative, Unnat Jyoti by Affordable LEDs for All (UJALA), has revolutionised India’s LED market and reportedly reduced carbon emissions by up to 32 million tonnes every year. In an interaction with Potshangbam July, Venkatesh Dwivedi, director (projects), EESL, speaks about the success of the UJALA and SLNP schemes, the benefits of its business model, and its ambitious goals, going forward.
EB: Tell us more about the Unnat Jyoti by Affordable LEDs for All (UJALA) and the Street Light National Programme (SLNP).
UJALA was launched in January 2015, and aims to promote efficient lighting, enhance awareness to increase the adoption of efficient equipment that reduces electricity bills and help preserve the environment. UJALA is the largest non-subsidy-based LED lighting programme in the world. The company’s innovative business model obviates the need for discoms to invest upfront for energy-efficient appliances. EESL procures the appliances and provides them to consumers at a variety of points of sale at a rate of ₹ 70 per LED bulb, ₹ 220 per LED tubelight and ₹ 1,110 per fan, all of which are much below the market price.
India’s streetlights form a crucial component of the nation’s investment in infrastructure and road safety. To bring in mass-scale transformation, EESL has adopted a unique strategy by joining hands with states, municipal bodies and urban local bodies (ULBs) in what is called the SLNP. EESL replaces the conventional streetlights with LEDs at its own cost, with no upfront investment by municipalities, thereby making the programme’s adoption even more attractive. Over a specified period, EESL is repaid from savings accrued through the reduction in energy and maintenance costs for municipalities. A seven-year contract with the local bodies guarantees uptime of over 95 per cent, a minimum energy saving of typically 50 per cent, and free replacements and maintenance of lights at no additional cost to civic partners.
When compared to conventional lighting systems, LED streetlights are flicker-free and have a wider-angled beam, making roads safer for drivers and pedestrians. The use of LED luminaires for the devices also enhances aesthetics. LEDs can be automated by sensors, since they can be controlled remotely. In addition to their many benefits, LEDs enhance the surroundings significantly.
EB: What are the major achievements of the schemes so far?
Through the UJALA scheme, EESL has distributed nearly 351 million LED bulbs till date, generating annual energy savings of 4.55 billion MWh, avoiding peak demand of 9.17GW of electricity, and resulting in an annual cost saving of ₹ 182 billion (US$ 2.6 billion). The programme has helped reduce 36.9 million tonnes of CO2 emissions annually, which is equivalent to the annual emissions of a 500MW coal-fired power plant, or 2.7 million internal combustion cars every year. UJALA is also reducing annual household electricity bills by about 15 per cent and enabling consumer savings of over ₹ 16 billion every year.
By driving cost efficiencies through a demand aggregation model, EESL’s UJALA model has also stimulated the domestic market for LED bulbs. The sale of LED bulbs in the Indian market increased from 0.1 per cent of the lighting market in 2014 to 15 per cent within a year, with a projected increase to 60 per cent by 2020. The domestic LED market has also grown significantly beyond the UJALA programme, with the industry selling over 1.15 billion LEDs, far exceeding the UJALA programme’s target of 700 million LED unit sales. EESL has also facilitated the drop in LED prices which has led to faster adoption. The LED bulbs have equipped homes with energy-efficient, cost-effective lighting, with higher lumen output than conventional incandescent bulbs. This has not only translated into higher monetary savings for the end consumer but also improved their quality of life and contributed to India’s economic growth and prosperity.
EESL has also successfully taken the UJALA programme beyond Indian borders to Melaka in Malaysia, where it is distributing 1 million 9-watt LED bulbs. Similar efforts are under way for Sri Lanka, Nepal and Bangladesh.
Launched in 2015, EESL’s Street Lighting National Programme (SNLP) has been instrumental in replacing nearly 9.3 million streetlights in over 1400 cities in India, leading to 6245.88 million units of energy savings and cost savings of ₹ 23 billion every year.
After the success of SLNP, both the Central and state governments are gearing up to take these benefits to the villages. In June 2017, the government of India announced that EESL would be retrofitting 1 million conventional streetlights with LED lights in the gram panchayats of seven districts in Andhra Pradesh. EESL has retrofitted 1.85 million conventional streetlights with LEDs in gram panchayats in Jharkhand – this is India’s first rural LED street lighting programme under SLNP. In Goa, approximately 200,000 streetlights have been retrofitted with LEDs, across 189 gram panchayats and 14 municipalities. In Telangana, over 30,000 streetlights have been retrofitted with LEDs in two gram panchayats.
LED lighting offers higher efficiency, better illumination and life expectancy apart from being environmentally sustainable. EESL has been successfully implementing UJALA and SLNP across the country and the benefits of the programmes are being appreciated by all. We will continue to work closely with all our stakeholders including the governments at the Centre and in the states, for the overall well-being of citizens by ensuring reliable, quality and cost-effective benefits of efficient LED lights. India’s commitment to energy efficiency is steadfast and ensures holistic long-term development.
EB: What kind of procedure is followed during procurement?
We follow a transparent and open bulk procurement approach to drive down the price of the products procured, and pass on this lower price benefit to the consumers. This makes the products more affordable compared to the prevailing retail prices and generates increased demand. EESL’s model of bulk competitive procurement has resulted in lowering the manufacturing cost of LED bulbs, enabling the benefit of price reduction to be passed on to the consumers. This, in turn, has led to a much larger pools of bidders, enhancing competition. Further, EESL’s specifications, including the three-year warranty requirement, have ensured that LED bulbs procured meet high quality standards. This has helped build market confidence in the product.
EB: Do you face any challenges during procurement and how do you address them?
We have received encouraging responses from the industry. The UJALA and SLNP programmes have encouraged and enabled new players in allied industries as well. We are also able to make a concerted effort towards assuring quality since specifications for consumers have become mainstream and more closely regulated. We are proud to be working closely with BIS as part of this effort. Currently, we are also working to strengthen and expand our distribution network and points of sale to even the most remote parts of the country, to ensure universal access to the benefits of energy efficiency.
EB: How many LED bulbs have been distributed across the country till now? And what savings has this resulted in?
Apart from the statistics shared earlier, you can go through our national UJALA dashboard (ujala.gov.in) to track the number of LED bulbs distributed across India. Clicking on individual states lets you track distribution across respective cities, and even access a list of distribution counters on a city-wise basis. The dashboard gets updated in real-time, and provides information on the programme’s total energy savings, carbon emission reduction and peak demand avoidance.
EB: Please enlighten us about your business model ‘Pay-As-You-Save’. Is this model effective?
EESL enables consumers, industries and governments to effectively manage their energy needs through energy-efficient technologies. EESL is implementing the world’s largest non-subsidised energy efficiency programme across sectors like lighting, buildings, e-mobility, smart metering and agriculture, at an unprecedented scale. EESL focuses on solutions-driven innovation with no subsidy or capital expenditure. It is able to do so using its Pay-As-You-Save (PAYS) model, which obviates the need for any upfront capital investment by the consumer, utility, or discom. The entire investment by EESL is recovered through monetised energy savings over a scheduled project period. The PAYS model is an innovative business model that is transparent, scalable, flexible, and can seamlessly embrace different and emerging technologies in a manner that incentivises all stakeholders.
The transparency and flexibility of the business model avoids the requirement of public funds as enablers and delivers outcomes in a time-bound manner. The business model has the power to unlock demand in sectors where none existed. By doing so, EESL drives large scale initiatives to create a market for transformative, future-ready solutions. Customers benefit by reducing consumption and electricity costs, while discoms benefit by enhancing how they manage peak demand. Discoms do not have to pay to participate in this model, as EESL is responsible for procurement, distribution, and compiling energy usage data. Thus, all stakeholders have clear, measurable benefits.
EB: In your view, what more can be initiated for faster adoption of energy-efficient LED bulbs in every nook and cranny of India?
The drop in LED prices has accelerated their adoption. We can see LEDs installed even in the remotest of villages in the country today. People have come to prefer LED bulbs – not only because their prices have declined significantly, and they are qualitatively better – but also because people want to champion a national movement to mitigate climate change. That said, greater awareness regarding energy efficiency, the advantages it delivers and its importance in ensuring a livelihood for future generations will motivate more conscientious use of energy and increase the adoption of energy-efficient technology, like LEDs.
EB: How aware are people about the UJALA and SLNP schemes?
EESL engages potential consumers with information about the benefits of energy-efficient appliances to generate product demand. EESL curates a customised awareness plan after undertaking in-depth research of the market in every state and region to which it plans to introduce the technology.
Information regarding the programmes and product benefits is made available through various mediums ranging from newspaper and outdoor advertisements, door-to-door campaigns, social media, and through tie-ups with government and quasi-government organisations. Outreach is also conducted in partnership with state governments and state electricity distribution companies (discoms) to sensitise customers on how efficient residential energy-use benefits customers and the environment, as well as how it reduces costs, facilitating higher LED uptake.
EB: What is India’s share in the global LED market?
India’s share in the global LED market has increased to 12 per cent in 2018 from a mere 0.1 per cent in 2012-13, with the penetration of LEDs in the domestic market rising to 10 per cent from 0.4 per cent.
EB: What growth do you foresee in the LED lighting segment over the next five years?
According to a TechSci report, India’s LED lighting market is projected to grow at over 24 per cent annually during 2016-2021. The market stood at US$ 918.70 million in 2016 and is projected to grow at a CAGR of 24.66 per cent, in value terms, to reach US$ 3.76 billion by 2022. We hope that this growth will be driven by growing consumer demands and efforts for increasingly efficient power consumption. The sector’s growth will also be augmented by expansion in housing and infrastructure development such as roads, which necessitate corresponding LED demand. Overall, this growth journey is very exciting, and the government’s programmes and schemes will keep the momentum going.