Bulletin

Taking the heat off, sustainably

12 Nov 2019

The cooling challenge in India

For the record, 2018 has been the fourth warmest year. Extreme heat is no longer a random climate event; heatwaves are claiming more lives than ever before. In India, it has been estimated that the number of deaths from heat exposure can double in many cities and cost the Indian economy as much as USD 450 billion by 2030. This brings into sharp focus the heightened need for sustainable cooling solutions.

In India, space cooling is fast becoming a necessity as it enhances productivity and improves the quality of life of all our citizens. However, increased air-conditioning greatly contributes to increased electricity demand and a steep increase in greenhouse gas (GHG) emissions. Being fully aware of the consequences of increased air-conditioning, on 8th March, 2019, India launched a cooling action plan, prepared after extensive consultation with citizens, civil society groups, experts, and government agencies. This action plan with identified actions and timelines, looks at reducing the footprint of air-conditioning by: encouraging energy-efficient buildings; enhancing the uptake of energy efficient air-conditioners and other space cooling technologies; and reduction in the GHG potential of the refrigerant used in the air conditioners.

The plan states that India’s cooling demand is projected to grow eight times over the next two decades.  With a growing economy and increasing urbanisation in India, the built environment and facilities demanded are projected to grow rapidly in the country. With this, the penetration of air-conditioning and refrigeration systems in residential, commercial and industrial, automobile and transportation sectors are projected to rise significantly. The cyclical nature of cooling - rising heat increases demand for cooling, which in turn leads to more emissions and warming – makes sustainable cooling a necessity.

With large swathes of India yet to be transformed into built space, the demand trajectory for ACs across upcoming offices, homes, and commercial property will spike in the coming years (see below). India’s challenge, thus, is to provide enough cooling that is sustainable enough to reduce associated emissions.

Creating market demand for super-efficient ACs: ESEAP

Decreasing the impact of hydrofluorocarbons (HFCs) presents the single greatest opportunity to reduce the adverse impacts of climate change. As a constructive member to the Montreal Protocol to phase out these chemicals worldwide, India’s reduction of HFCs for room ACs can achieve 25% of its target to avoid the use of HFCs equivalent to 2-6 billion tonnes of carbon dioxide through 2050. Simultaneously, improving the climate benefits through improved room-AC energy efficiency are also immense, considering the scale of the country’s demand.

Super-efficient technology using low or zero GWP refrigerants customised to Indian market conditions (at affordable pricing) can be achieved through technological and policy innovation. In India, where pricing of an AC or a fridge plays a decisive role, innovative business models to address affordability concern are most needed in the cooling sector. The focus of industry in developing countries is usually on capturing maximum market share and competitive pricing becomes a major force for planning market strategies.

The prime challenge to the introduction of high energy efficiency, low GWP refrigerant RAC technologies is an initial price hump which makes them less competitive as compared to more prevalent (lower efficiency, higher GWP refrigerant) technologies; The ‘price-hump’ signifies the relationship between price increase for energy efficiency improvement and appropriate timeline to implement the enhanced energy efficiency measures. The figure elucidates the tangible concept where trade between the affordability and efficiency is drawn. Provided that our intention is to leapfrog to super-efficient technologies that use low-GWP options, a price hump is inevitable.

EESL’s Super-Efficient Air Conditioning Programme (ESEAP) – which is enabling the rollout of 40% more energy efficient ACs at prices comparable to the market available variants – is creating the market scale for sustainable cooling while also showcasing one of the ways through which to reduce the price-hump. By leveraging economies of scale through demand aggregation, the costs of these ACs will come down significantly, making them accessible to the consumers. 

EESL’s bulk-procurement model will help the next generation technologies penetrate the market. This is done by aggregating the demand for the technology and establishing a demand market for participating manufacturers, thereby leading to rapid reduction in prices. EESL has pioneered this concept in India with its UJALA scheme. UJALA increased the market size of LED bulbs and lowered the cost of energy-efficient LED lighting from an initial cost of INR 310 per piece in 2014 to INR 38 by September 2016. Under UJALA, more than 100 million LED bulbs have been distributed across 120 cities and 14 major states of India, demonstrating the positive impact of bulk procurement.

Entry-level ACs that use highly potent refrigerants consume enormous amounts of energy. EESL’s Super-efficient ACs, 30% cheaper than retail price of 5-star ACs, are 40% more efficient than the current 3-star product and 20% more efficient than the current 5-star product. This translates to a saving of anywhere between INR 2000 to INR 3000 per year.

Given India’s imperative to reduce consumer energy bills and meet its climate change commitments, there is a pressing need to leap-frog and accelerate the introduction of super-efficient air conditioners with low GWP refrigerants and use innovative business models to address the ‘price-hump’.

The climate of change is upon us. India has already demonstrated leadership and responsible behavior towards addressing and managing climate change. In India, the rising demand for better standards of living, which mean more energy produced and consumed, is a massive challenge. But India is looking at this as an opportunity to drive change, with market building efforts, cutting-edge innovation and political will. 


About the authors
 

Manjeet Singh holds a MTech in Electronics & Communication Engineering from National Institute of Technology (NIT), Calicut, Kerala. Manjeet is a multi-disciplinary researcher and having expertise in the areas of Energy Efficiency, Refrigeration & Air conditioning sector and technical standards & policy formulation. Have experience of working in government and non-governmental organizations. Prior to TERI, he worked at Government of India on developing the energy efficiency standards for appliances and implementing the efficiency policies. At TERI primarily working on HFC phase-out under Montreal Protocol and cooling related projects. He has been actively involved in the development of National Cooling Action Plan. Worked on states & trends of Indian refrigerant industry and business models for deployment of super-efficient cooling products.

 

Karan Mangotra holds an MBA in Climate Finance from University of East Anglia, United Kingdom. Karan is a multi-disciplinary researcher and having expertise in the areas of climate finance, energy efficiency and market mechanisms. He led several projects related to energy efficiency, HFC phase out, carbon markets, MRV frameworks, among others. Karan started his career in 2005 with one of India’s largest conglomerate the TATA group following which he joined the United Nations Development Programme as an energy efficiency expert. In 2016, he joined The Energy & Resources Institute (TERI) and currently is an Associate Director of Earth Science and Climate Change Division. He served as a member on the team that developed the Indian NDCs and India's Cooling Action Plan.