MoU to Promote Energy Efficiency

IAS Prelims 2023

Ministry of Urban Development has embarked on a major programme to improve energy use efficiency in bulk water supply, public lighting, transportation and domestic consumption in cities and towns across the country.

The Ministry signed a Memorandum of Understanding with the Energy Efficiency Services Limited, a public sector enterprise in this regard.

Energy audit and improving energy use efficiency is one of the mandated reforms under Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and this initiative would help the cities significantly.

This will substantially reduce costs of operation of water supply schemes and public lighting and will benefit citizens.

In the MoU, it has been stated that energy costs account for 40% to 60% of cost of water supply in urban areas and energy efficiency interventions can reduce this cost by 25% to 40%, depending on the type and age of machines being used for bulk water supply.

Quoting Central Electricity Authority (CEA) it has been stated that urban local bodies can save about Rs.6,000 cr per year through such interventions in water supply and public lighting alone besides avoiding the need for 1,150 MW of power.

Savings in water supply is said to be Rs.3,200 cr and 600 MW of power while it would be Rs.2,800 cr and 550 MW in case of public lighting per year. Emission of Carbon Dioxide, a climate change agent is estimated to be reduced by over 7 million tonnes per year.

Necessary interventions would be undertaken by EESL without any financial burden on urban local bodies as cost of the proposed Municipal Energy Efficiency Programmes would be borne from out of the savings.

MoU states that performance contracting offers a mechanism for urban local bodies to finance these projects without upfront investment.

As per the MoU, EESL will develop overall strategy for taking up Energy Efficient Projects in urban areas and to start with, will take up implementation of energy efficient pump sets in public water works and sewage systems to be followed by similar interventions for public lighting, public transport systems and buildings.

Cities selected under Smart City Mission would be targeted first to be followed by AMRUT cities and others in a phased manner.

Ministry of Urban Development would facilitate signing of agreements between the State Governments, urban local bodies and EESL for conducting Investment Grade Energy Audit, preparation of technical reports and for implementation after the reports are approved.

EESL will provide or arrange project funding for implementation as required and will procure latest technological equipment and materials in a transparent manner besides ensuring repair and maintenance services for the goods installed by it.