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Top-down approach to making buildings energy efficient has not worked

Written by Radhika Khosla | Updated: September 15, 2014 8:04 am
The initiatives, which were unveiled in early September, point to the increasing part that buildings play in India’s energy consumption. (Source: Reuters photo) The initiatives, which were unveiled in early September, point to the increasing part that buildings play in India’s energy consumption. (Source: Reuters photo)

The ministry of power and the ministry of petroleum and natural gas jointly released three new energy-efficiency initiatives, which are now part of various programmes to advance energy saving in buildings across the country. These include programmes for rating energy usage of diesel generators and hospital buildings, and design guidelines for energy efficiency in multi-storey residential buildings. Despite this, however, the country is without a clear strategy that links building energy use, which already accounts for more than 30 per cent of the economy’s electricity consumption, with its larger development, energy and climate change plan.

There is little ambiguity about the unprecedented growth expected in real estate and infrastructure in the next two decades. The initiatives, which were unveiled in early September, point to the increasing part that buildings play in India’s energy consumption. As calculated in 2010, a staggering two-thirds of commercial and high-rise residential buildings that will exist in 2030 are yet to be built. Such development is juxtaposed with two looming and inter-related questions: what will India’s energy strategy be in light of the extraordinary power demand and urbanisation; and what will its response be to the considerable threat of climate change to its development agenda? Within this context, how India strategises, develops and implements its position on energy efficiency in buildings could be pivotal in responding to these questions. So far, there is little evidence that such a strategy is being considered. What exists, instead, is a narrative that disguises some of the deeper structural issues at play.

The dominant reasoning for the slow pace of building efficiency adoption is considered to be the high upfront investment and a misalignment of incentives. All of this is true. Energy efficiency costs more at the time of purchase. It also pays for itself over the operational lifetime of the building, with paybacks largely accruing less than five years after construction. However, for non-owner-occupied buildings, while the developer invests in the efficiency measures, it is the tenant who reaps the economic savings, taking away the incentive for the initial investment.

The story, however, is not just about who benefits from energy saving. Rather, it is embedded in the larger political, technical and institutional arrangements within which building energy efficiency operates. Technical expertise is housed within different institutional arrangements countrywide and traverses a range of issues, such as building technologies, energy-management systems, materials, ratings, codes and incentives. However, there is no mechanism to link expertise, which resides in individuals, projects, and disconnected institutions, to macro-level national policymaking and then further to the international context.

The asymmetry of knowledge has resulted in low levels of awareness across stakeholders. Real estate developers are largely unaware about market advantages or regulatory incentives that promote efficiency. End users are unfamiliar with the monetary and environmental benefits from an efficient space. There is also a deficit in skilled professionals who are trained to design for, implement and monitor the performance of efficiency measures. On the financial side, banks have a limited understanding of this new market for efficient technologies and energy-service companies and instead associate financial risk with investments. This attitude permeates to developers and end users, making them reluctant to invest or change behaviour patterns. Lastly, state and regulatory actors have a notion of energy efficiency that is divorced from macro-level co-benefits of energy security and greenhouse gas reductions. A complex relationship between energy and real estate thus exists, which manifests itself as a gridlock for energy efficiency, in spite of the latter being a win-win strategy for all.

Such a crisis in the knowledge infrastructure is coupled with a lack of political will to ascertain efficiency goals at the national and state levels, and the actual capability of implementing them. Institutional arrangements have also led to a fragmentation of responsibility. Since buildings come under the purview of India’s concurrent list, the Centre determines the regulatory framework for building energy code notification. But its enforcement takes place under local municipal laws. Further, since India is a federal polity, the Centre does not have the power to mandate states to implement energy-efficiency targets.

Laying the foundation for a buildings efficiency strategy will involve rethinking the approach taken so far. Our planning hitherto has followed a top-down technocratic and economic approach to increasing efficiency adoption. Taking a deeper look at existing narratives and underlying structures is essential to transform how one of India’s most important power consuming and rapidly growing sectors uses energy. Without doing so, we will fail to bridge and further our development, energy and climate change debate.

The writer is a fellow at the Centre for Policy Research, New Delhi

express@expressindia.com

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