Foreword. I once again commend the Confederation of Indian Industry and Digital Energy Solutions Consortium for taking up this initiative.

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3 Foreword I am delighted to learn that Confederation of Indian Industry (CII) and the Digital Energy Solutions Consortium (DESC) are releasing a report on the potential of ICT to meet the objectives of India s National Action Plan for Climate Change. This report is important in many ways. First, I believe that we need the ICT industry as a partner in our efforts towards low carbon development. India has announced a goal of reducing the emissions intensity of its GDP by per cent by the year 2020 compared to The ICT industry will have to play an important role in achieving this goal, and in this context this report is a very useful step forward. It is important to assess the ICT sector s potential contribution to meeting national environmental goals. This report does exactly that, and that can provide useful insights for policy making. Second, the report lays out the broad existing policy framework and makes valuable policy recommendations. This is a valuable way to foster more dialogue between business and the government and provides a comprehensive framework for structuring the same. Third, the report highlights the drivers and barriers to using technology to lower our carbon intensity without affecting economic growth, which is a key requirement. While the sector itself fuels creation of jobs and contributes significantly to India s growth story, the real power of ICT is unleashed when its judicious use leads to reducing emissions across the economy, many times its own direct carbon footprint. As you know, India is taking a proactive role in addressing climate change. We have set up an Expert Group on Low Carbon Strategies for Inclusive Growth, a multi-stakeholder group given the mandate to develop a roadmap for India to achieve low carbon development. Indeed, CII and older representatives of industry are represented in this Group, and we eagerly look forward to its recommendations, which will feed into the Twelfth Five Year Plan. This report will have a valuable role in informing those recommendations. These are several other recent government measures, in combination with steps taken by business, send out a clear signal to the world that we are a responsible carbon-conscious society, and we will do our part. We look forward to working with the ICT industry and making this synergy even more concrete. I once again commend the Confederation of Indian Industry and Digital Energy Solutions Consortium for taking up this initiative. Jairam Ramesh Minister of State (Independent Charge) Environment & Forests, Government of India

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5 This Summary presents the findings and recommendations of Phase I of the project aimed at assessing the contribution of Information, Communication and Technology (ICTs) to India s National Action Plan on Climate Change (NAPCC). Phase 1 of the project focused on three of eight missions under the NAPCC, namely the mitigation related missions. The detailed reports are available separately. National Solar Mission National Mission for Enhanced Energy Efficiency National Mission on Sustainable Habitat National Water Mission National Mission for Sustaining the Himalyan Ecosystem National Mission for a Green India National Mission for Sustainable Agriculture National Mission on Strategic Knowledge for Climate Change About Digital Energy Solutions Consortium The Digital Energy Solutions Consortium (DESC) was created by bringing together leaders in technology, energy, and the environment. DESC s goal is to inform and suggest public policies in India that help to create a national strategy and specific public policies that promote the role of ICT in growing our economy, reducing our energy dependence and changing behaviours that lead to a healthier environment. The consortium is committed to advancing public policies that promote the use of ICT solutions as a means of solving our nation s energy challenge, spurring innovation and economic opportunity, and contributing to practical strategies for mitigating and adapting to climate change. To know more about DESC, please visit About the CII-ITC Centre of Excellence for Sustainable Development The CII-ITC Centre of Excellence for Sustainable Development is an institution that creates a conducive, enabling climate for Indian businesses to pursue sustainability goals. It creates awareness, promotes thought leadership, and builds capacity to achieve sustainability across a broad spectrum of issues. The Centre enables Indian businesses become sustainable, and channels the potential of Indian industry to power India s agenda for inclusive growth and sustainable development. It enables businesses transform themselves by embedding the concerns of sustainable development into their own strategies and processes. CII-ITC Centre of Excellence for Sustainable Development 2nd Floor, Thapar House, 124, Janpath, New Delhi Tel: Fax:

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7 Summary - Mitigation Related Missions There are great expectations for ICT as an enabling technology in the domain of sustainable development: to increase energy efficiency in production processes, to make buildings, road transport and logistics processes more efficient, and as a result, reduce the carbon footprint of economic activity. This study is aimed at exploring potential GHG reduction opportunities through adoption of Information & Communication Technology (ICT) solutions in the focus sectors of the three mitigation related missions of India s National Action Plan on Climate Change (NAPCC) 1, namely National Mission on Enhanced Energy Efficiency (NMEEE), National Mission on Sustainable Habitat (NMSH) and National Solar Mission (NSM). The findings not only improve our understanding of the role ICT can play in increasing energy efficiency and reducing GHG emissions but also make a business case for reducing GHGs. The focus of the Enhanced Energy Efficiency Mission and Sustainable Habitat Mission is to reduce energy consumption or to improve energy efficiency, whereas the Solar Mission focuses primarily on increasing the generation of solar energy in the country. With this distinction in mind, the study quantifies the energy savings potential through the use of currently available ICT solutions and their contribution in reducing GHG emissions, as follows: The energy savings potential, along with the associated costs of the identified ICT solutions, have been determined for each focus sector and a cost-benefit analysis of implementing such solutions has been conducted, identifying the barriers related to the adoption of these ICT solutions. Two scenarios have been explored for determining the total GHG emission reduction potential, namely moderate and high penetration of ICT solutions in the focus sectors. Key actions have been identified that may be considered while developing a strategic roadmap towards alleviating the identified barriers to ICT adoption and improving penetration of ICT solutions in the focus sectors. Methodology Phase I Desk Research: To scan various ICT-based interventions to meet mission objectives under NAPCC and the current policy environment for ICT solutions. Phase II Consultation workshops: The relevant stakeholders were identified and workshops were conducted to share the objectives and methodology for the study. The workshops were also conducted with the objective of identifying ICT solutions that can be used to meet the objectives of the specific missions. The workshops also covered discussions on the existing policy frameworks and barriers to ICT adoption within the current ecosystem. Phase III One-to-one interactions: The consultation workshops were followed up by one-to-one interactions with the identified stakeholders. The technology suppliers were consulted to identify the available ICT solutions and the potential drivers/ roadblocks for the adoption of these technologies. This was followed by discussions with industry experts, industry associations and other government and nongovernment institutions to understand their opinion/ experience and the possible policy interventions related to ICT solutions. Phase IV: The information shared by various stakeholders was reconfirmed and validated by conducting secondary research using publicly available sources. The information was analyzed and used to assess the total energy and GHG savings potential in the year 2030, based on individual sectoral projections and expected penetration of ICT solutions. A final compilation of policy recommendations that are essential to achieve the saving potential was also made along with the enunciation of the roadmap required for the adoption of the recommended policy. 1 India released its National Action Plan on Climate Change (NAPCC) in June 2008, outlining its strategy towards managing GHG emissions and articulating future policies and programmes 5

8 Over 1.1 billion litres of diesel equivalent can be saved annually by implementation of ICT measures in the Railways in Diesel is a subsidised commodity in India. Hence, going by the current subsidy rates, the reduction in diesel consumption will result in the reduction of subsidy burden of the government to the tune of INR 198 crore annually in 2030.The Railways, through the reduction in diesel consumption, will save INR 3,850 crore annually in the year GHG emission saving potential in 2030 (million tco 2 ) (moderate ICT penetration) GHG emission saving potential in 2030 (million tco 2 ) (hgh ICT penetration) Total GHG emission savings: 320 million tco 2 Total GHG emission savings: 448 million tco 2 Key Findings 1. The identified ICT solutions can potentially lead to GHG emission savings of about million tco 2 per annum in 2030, which is approximately 8-10% of the estimated GHG emissions in 2030 for the sectors covered in the study, considering moderate to high penetration of ICT. Of the sectors considered in the study, commercial buildings, road transportation and power sector have the maximum GHG emission savings potential, accounting for 42%, 30% and 16%, respectively Implementation of ICT solutions can potentially lead to energy cost savings of around INR 137,000 crore per annum in 2030, which is approximately 2.5% of current GDP. Of the 100 million tonnes of carbon dioxide (tco 2 ) emission reduction target of the energy efficiency mission by 2015, ICT adoption in buildings, transport and the nine sectors identified under the PAT 2 scheme has the potential of contributing approximately 31 million tonnes, i.e., approximately 30% of the target. 3 2 The Perform Achieve and Trade (PAT) scheme is a market-based mechanism under the NMEEE, crucial for achieving its targets. It aims to fix specific energy consumption (SEC) targets for large energy-guzzling installations across India. The nine sectors under the PAT scheme are power, cement, steel, fertilizers, aluminium, chlor-alkali, paper, textiles and railways. 3 Out of the 31 million tonnes emission savings, 25 million tonnes is contributed from buildings and transport combined. These two sectors are not covered in the first phase of the PAT scheme; however, they are expected to be covered in the second phase. 6

9 4. Successful implementation of ICT for achieving the projected savings faces certain barriers and challenges. Lack of financial mechanisms. Suppliers of ICT applications lack support for financing arrangements from lending organizations. The high cost of technology coupled with lack of finance leads to less investment in the development and distribution of these technologies. b) c) o Comprehensive inclusion of railways sector Fiscal incentives for facilitating adoption of ICT solutions a. Rationalization of direct and indirect taxes to initiate adoption b. Fund allocation for ICT uptake Assist in standardization and localization of ICT solutions Unavailability of energy benchmarks. Unavailability of baseline energy consumption data results in sub-optimal design of the energy efficiency solutions. In the absence of a dependable benefits computation, it becomes a major challenge for the adopters to build a strong business case for ICT adoption. d) a. b. Encourage R&D through institutional and financial support Facilitate standardization Provide impetus to the sector by applying ICT for policy implementation Weak regulatory norms for carbon emissions. Strong regulatory norms on carbon emissions like carbon tax, carbon emission caps, etc., will help present a stronger business case for the implementation of newer technologies. In a situation of weak regulatory drivers on energy efficiency and emission standards, ICT adoption towards the same is unlikely to become a priority. Inadequate standardization. There are currently no standards to compare ICT based energy efficiency equipments. Such inadequate standardization leads to lack of reliable information while making a decision on buying ICT equipment for energy efficiency. e) f) Undertake steps to develop ICT skills/talent pool a. b. c. Reduce the cost of implementation of ICT solutions since they will involve local talent vs. foreign talent. Create a platform for green jobs Spread awareness and provide impetus to adoption of energy efficient ICT solutions Other sector specific initiatives such as encouraging use of ICT in solid waste management, logistics, traffic management, etc. 5. The report recommends certain key actions that may be considered while developing strategies and policies for increased ICT adoption in the three missions. These recommendations can be broadly classified into: a) Inclusion of ICT solutions as an enabler to meet emission reduction targets of the NMSH and NMEEE with specific targets for emission reduction o Power transmission and distribution should be implemented in phase one of the mission National Mission on Enhanced Energy Efficiency (NMEEE) The projected GHG emissions from the sectors under the NMEEE Mission will be about 1.55 billion tco 2 in 2020 and 3.2 billion tco 2 in Coal-based power will be the biggest emitter, accounting for nearly 60% of these emissions. Coal demand for power generation alone is projected to increase to about 1.15 billion tonnes in The projected energy consumption and GHG emissions for the sectors of NMEEE covered under the study are depicted in figure 1-1. The ICT solutions available for enhancing energy 7

10 The electricity saved by ICT implementation in the power sector in 2030 can aid in the rural electrification of more than 14,000 villages, with an average population of 2,000-3,000 people. Figure 1 1: Sector wise Energy Consumption and GHG Emissions in the year 2020 and Textiles Railways Chloro Alkali Aluminium Fertilizer Power 5000 Paper Iron and Steel 0 Energy Consumption in 2020 (PJ) Energy Consumption in 2030 (PJ) GHG Emissions in 2020 ('00 kt) GHG Emissions in 2030 ('00 kt) Cement efficiency have been categorized into Level 0 to Level 5, with every level corresponding to more sophistication and better functionalities as compared to the previous level. These levels can be broadly defined as: Level 0: Installation of monitoring and measuring equipment, Level 1: Installation of first level of control over the monitoring and measuring equipment in the field, e.g., installation of programmable controller (PLC). Level 2: Centralized collection of data received from field equipment. Level 3: Introduction of automated controls over the operations of the plant. Level 4: Installations of systems like management information systems (MIS) to enhance decision making capabilities and reduce decision making time. Level 5: Installation of enterprise management solutions like ERP, etc. The implementation of Level 1, Level 2 and Level 3 ICT solutions yield in direct and measurable energy savings and have therefore been assessed to estimate the energy and GHG emission savings. The identified ICT solutions include Advanced Process Controls, The energy saved by implementation of ICT measures with moderate penetration in the cement sector in 2030 can provide energy to produce additional 4.5 million tonnes of cement. 8

11 Figure 1 2: Energy saving and GHG Emission saving potential of ICT for NMEEE in the year 2030a Total energy savings: 887 PJ Total GHG emission savings: 69 million tco 2 Total energy savings: 1452 PJ Total GHG emission savings: 114 million tco 2 optimization solutions, energy management systems, automation solutions, etc. The sector-specific ICT solutions are listed in the Annexure. Our analysis reveals that implementation of the identified ICT-based energy efficiency solutions can potentially save energy to the tune of about PJ per annum in the year 2020 and PJ per annum in the year 2030, assuming moderate and high penetration of the identified ICT solutions is achieved by then. The energy savings will translate into GHG savings of about million tco 2 per annum in the year 2020 and million tco 2 per annum in the year 2030, out of which power (transmission & distribution), railways (traction) and iron and steel together account for more than 90% of the total energy saving potential. The sector-wise energy and GHG emission saving potential of ICT solutions is depicted in figure 1-2. Cost-Benefit Analysis In order to evaluate the financial aspect of adopting ICT solutions, a simple payback analysis has been carried out. The analysis has been carried out assuming the whole investment required by 2020 and 2030 for moderate ICT adoption is invested in the present year and at present day s costs, without incorporating improvements in future technologies. Similarly, the benefit in terms of energy savings has also been estimated at the present day s cost of energy. 9

12 GHG emissions reduced by implementation of ICT measures with moderate penetration in the paper sector in 2030 are equivalent to the annual emissions sequestered by 3 million mature trees scale implementation of these technologies. The key barriers that inhibit the full-scale adoption of ICT for energy efficiency are given in the box below Since, only a simple payback analysis has been carried out, factors like inflation, tax breaks, discount factors, etc., have not been considered. The total cost of implementation of ICT solutions in the identified sectors, considering moderate penetration of ICT solutions in the year 2020 and 2030, is estimated to be INR 49,700 crore and INR 156,100 crore, respectively. These investments correspond to cost savings of around INR 7,300 crore per annum and INR 29,200 crore per annum, respectively. Barriers to ICT Adoption Investment required for ICT adoption (INR thousand crore) Cost savings per annum through ICT adoption (INR thousand crore) Although sizeable savings are achievable through the adoption of ICT solutions in the target sectors of the energy efficiency mission, a number of pervasive barriers were identified which have impeded large- Key Findings The key cost components in the identified ICT solutions for enhanced energy efficiency are the cost of imported components and cost of services/ consultancy. Incentives that lead to reduction in these two cost components can help increase the penetration rate of ICT solutions among the target industry The NMEEE Mission of the NAPCC estimates that 49 billion kwh energy savings can be achieved in the processes of the identified sectors. It can be concluded from the study that implementation of ICT alone can potentially help achieve energy savings of around 15 billion kwh in Key sectors like power, railways and cement have a much higher pay back period but account for more than 90% of the potential energy savings/ghg emission reduction. Therefore, fiscal incentives in the form of tax and duty breaks and localization of technology are essential in achieving higher ICT penetration in these sectors. The Solar Mission of the NAPCC has set an installed solar capacity target of 20,000 MW by the year The smart grid (a key ICT solution identified) has a major role to play in the integration of solar and Demand side barriers High cost of technology Lack of awareness about the available technologies Lack of initiative by Public Sector Enterprise Lack of ICT skills Inadequate baseline data on energy use Difficulty in retrofitting in existing plants Weak regulatory norms for carbon emissions Supply side barriers Inadequate Standardization Intellectual property rights Lack of financing mechanisms Lack of public investment towards capacity building Inadequate R&D support 10

13 Of the 100 million tonnes of carbon dioxide emission reduction target of the energy efficiency mission by 2015, ICT adoption has the potential of contributing approximately 6 million tonnes, i.e., 6% of the 2015 target. In terms of monetary savings, this amounts to INR 2,600 crore or 0.06% of the FY GDP of India, on account of lesser consumption of energy. other renewable power to the main grid and its implementation should be planned in conjunction with implementation of solar power. The Enhanced Energy Efficiency Mission covers only sheds and workshops of the Railways for energy efficiency targets. However, energy consumed in traction for the railway sector is substantially higher than the energy consumed in loco sheds and workshops, and therefore should be a part of the NMEEE Mission. Also, as concluded from the study, implementation of ICT for traction in Railways has a huge energy saving potential. Therefore, energy efficiency targets for traction can also be included as part of the NMEEE. Recommendations for Improved Energy Efficiency through ICT Adoption Setting up of the Bureau of Energy Efficiency (BEE), NAPCC/NMEEE, declaration of 2020 voluntary targets and efforts to move towards low carbon economy reflect India s resolve to improve the energy efficiency of industry and its commitment tackle the issue of climate change. ICT-based solutions can play a critical role in this transition towards higher energy efficiency and low carbon emissions. However, to fully realize the potential role ICT can play in the country s climate change efforts, first a conducive ecosystem for ICT adoption needs to be developed. In this regard, there is a need to i) study the barriers to ICT adoption; ii) review the prevailing policy framework; and, iii) recommend ways to increase ICT adoption. Case study: Maturity Model for Smart Grids American Productivity & Quality Council (APQC) developed a smart grid maturity model (SGMM) on the lines of the capability maturity model integration (CMMI) model that can help various power utilities assess their current state and set their targets for smart grid transformation according to their business requirements. This model was handed over to Carnegie Mellon University s Software Engineering Institute (SEI), and brought out in public domain. This tool has been used by over a hundred public utilities so far, including Indian utilities. Such tools can be used by utilities in India as a framework for maturity assessment and project prioritization. Recognizing the potential of ICT solutions in contributing towards energy efficiency goals, the target for reduction attributable to ICT solutions should be mentioned for key sectors such as railways, power (transmission & distribution) and iron and steel. These sectors have been identified due to their contribution in the GHG emission savings potential, which is close to 90% (of the sectors identified in the NMEEE Mission). The recommendations for increased energy efficiency through ICT adoption can be categorized in the following areas: Savings achieved through video-conferencing and telecommuting with moderate ICT penetration in 2030 can offset GHG emissions, more than 70 times the current GHG emissions due to the annual air traffic between Delhi and Mumbai. 11

14 Implementation of ICT-enabled mobility management systems in 2030 can offset emissions created by 12 million cars, travelling an average of 18,000 km every year. This is equivalent to 16,500 million litres of diesel or 17,200 million litres of petrol saved. o Inclusion of ICT based solutions in emission reduction targets of the NMEEE plan Power transmission and distribution should be implemented in phase one of the mission as the sector alone has an estimated potential 4 million tonnes GHG reduction by employing ICT solutions, which is approximately 4% of the 100 million tonnes emission reduction target of NMEEE by 2015 change mitigation related objectives in the National Action Plan on Climate Change. The mission majorly focuses on GHG emission reduction opportunities in three integral components of urban planningbuildings, municipal solid waste and transport. Through this mission, the NAPCC seeks to encourage energy efficiency in buildings, improved management Figure 1 3: Sector wise GHG Emissions in the year 2020 and 2030 (million tco 2 ) Comprehensive inclusion of Railways sector: the Railways sector covered in the NMEEE covers the non-traction segment, i.e., workshops and locomotive sheds. It is proposed that the scope be expanded to cover traction energy. This refers to energy consumed in the rail movement, which is 87% of the total energy consumed by Railways GHG emissions from Transport Sector o o o o Defining the strategic roadmap for ICT adoption towards NAPCC/NMEEE and setting up a mechanism for effective execution and monitoring Promoting skill set development, awareness and outreach for the ICT-based solutions Making the ICT solutions financially attractive by fiscal instruments such as tax and duty breaks Promoting innovations and research, for example setting up pilot projects demonstrating the benefits of the technology GHG emission in commercial building o o Increasing penetration through standardization and localization of technology Applying ICT for policy adoption and information availability National Mission on Sustainable Habitat (NMSH) The National Mission on Sustainable Habitat is a key component of the strategy for achieving climate GHG emissions from Solid Waste

15 Case study: Street Lighting ICT enabled street lighting solutions were installed in a busy airport. These ICT measures have been established over existing power lines and make possible individual control of the streetlights, allowing them to be individually dimmed as per levels of requirement. They are also synchronized with outdoor light intensity to maintain standard lux levels and can also be remotely controlled through webbased communication systems. The various benefits accrued due to the installation of these systems include:- Net savings of 45% of the street light consumption of the airport Control of excessive illumination during daytime Monitoring of energy usage patterns of feeders for power theft monitoring Increased availability of information and automatic malfunction notification for early corrective action and restoration Control of consumption points from a remote location A street lighting energy conservation project implemented by Bangalore Development Authority reduced energy consumption of the town towards street lighting to the tune of 40-45%. Such a project can be replicated to many other cities in the country, with similar kind of conditions. Conservatively, such upgradations can be assumed to reduce energy consumption in street lighting anywhere between 10% and 30%. of solid waste and better urban planning, ensuring efficient and convenient public transport. The steady increase in GDP per capita continues to drive increasing demand for mobility and vehicle use in India. The transport sector consumes about 16.9% of the total energy consumption. Transportation through road, rail and air are responsible for CO 2 emissions of around 80%, 13% and 6%, respectively. India s building sector is expected to grow at a brisk pace. Both commercial and residential construction contribute significantly to the economy, approximately 6.5% of the GDP. These sectors, in turn, consume substantial quantum of energy throughout the lifecycle of buildings, contributing to around 6% of India s total GHG emissions. Emissions from the solid waste sector increased at a CAGR of 7.3% from the year 1990 to 2000, and reached 2,863 million tco 2 in 2000, almost 2% of the total GHG emissions. The projected GHG emissions from the sectors under the NMSH Mission would be about 1.38 billion tonnes CO 2 in , with road transportation being the biggest emitter, accounting for nearly 50% of the total GHG emissions. The projected GHG emissions for the sectors of NMSH covered under the study are depicted in figure 1-3. With respect to abatement of GHG emissions in the transport sector, mobility management systems, telecommuting, virtual meetings and supply chain and logistics optimization systems have the potential to significantly enhance the effectiveness and efficiency of surface transportation systems. Energy consumption during the operation phase of buildings is driven by two factors energy intensity and floor area. ICT-enabled monitoring, feedback and optimisation tools can be used to reduce both these factors at every stage of a building s lifecycle. Some of these tools include energy modelling software, building management systems, lighting and HVAC controls. ICT solutions also enable real-time information sharing on energy consumption of every energy-consuming appliance in a building, empowering users to take informed decisions, resulting in energy savings. The Mission document also aims at incentivizing efficient street lighting systems as part of the regulatory measures for increasing efficiency in residential and commercial sectors. For this purpose, ICT solutions like intelligent street lighting management systems have also been explored in the report. Assuming that there are 60,000 ATMs in the country, each having an air-conditioning system of capacity 1.5 tonnes on an average, then the net electricity consumed 4 The emissions from the transport sector have been calculated on the basis of data for all modes of transport in India. The calculations for commercial buildings have been done considering only office spaces. 13

16 by these units is 1,314 million kwh ( 5 * 24* 365*.5* 60,000) on an annual basis. With the implementation of remote management systems, around 10% of this energy consumption can be reduced, leading to savings of million kwh, which translates to GHG emission reductions of more than 100,000 tco 2. Similarly, assuming that there are three lakh telecom towers in the country, and each consumes 10 kw of power, then the total electricity consumed by the towers is around 13,140 million kwh (10* 24* 365*.5* 3,00,000) annually. With the implementation of remote management systems, around 10% of this energy consumption can be reduced, leading to savings of 1,314 million kwh, which translates to GHG emission reductions of more than 1 million tco 2. ICT-enabled intelligent waste management systems can provide significant cost benefits for municipal solid waste sector. The sector specific ICT solutions are mentioned in the Annexure. Figure 1 4: GHG emission saving potential of ICT Moderate penetration Our analysis revealed that implementation of the identified ICT-based solutions can potentially lead to GHG savings of about million tco 2 per annum in the year 2020 and million tco 2 per annum in the year 2030 in the identified sectors. Out of the sectors considered under the study, the commercial building sector alone accounts for more than 50% of the total GHG emission saving potential for NMSH Mission. The sector-wise GHG emission saving potential is depicted in figure 1-4. Cost-Benefit Analysis In order to evaluate the financial aspect of adopting ICT solutions, a simple payback analysis has been carried out. The analysis has been carried out assuming the whole investment required by 2020 and 2030 for moderate ICT adoption is invested in the present year and at present day s costs, without incorporating improvements in future technologies. Similarly, the benefit in terms of energy savings has also been estimated at the present day s cost of energy. Since, only a simple payback analysis has been carried out factors like inflation, tax breaks, discount factors, etc., have not been considered. The total cost of implementation of ICT solutions in the identified sectors, considering moderate penetration in the year 2020 and 2030 is estimated to be INR 87,500 crore and INR 2,62,,500 crore, respectively. These investments will correspond to cost savings of around INR 26,300 crore and INR 1,06,400 crore per annum, respectively. 0 GHG Reductions in GHG Reductions in 2020 (MtCO2) 2030 (MtCO2) High penetration GHG Reductions in GHG Reductions in 2020 (MtCO2) 2030 (MtCO2) Buildings Transport Dematerialization Cost savings per annum through ICT adoption (INR thousand crore) Investment Required for ICT adoption (INR thousand crore)

17 Key Findings Of the 100 million tonnes of carbon dioxide emission reduction target of the energy efficiency mission by 2015, ICT adoption in buildings and transport has the potential of contributing approximately 25.6 million tonnes, i.e., 25% of the 2015 target. However, buildings and transport are currently not part of the PAT scheme. Considering the huge energy savings potential in these sectors, these sectors may be included in the first phase of the PAT scheme. Remote Management Systems can beneficially be implemented in multi-location and disintegrated consumption points, such as telecom towers, ATMs, retail outlets, delivering energy savings to the tune of 10%. Hence, implementation of these systems may be accelerated through capacity building and awareness programmes. RMS will also play a key role in implementation of smart grids by enabling buildings to talk to utilities, so that the owners and occupants can willingly participate in demand response and energy efficiency programmes. Hence, the adoption of RMS should be emphasized through policy interventions. Barriers to ICT Adoption Demand side barriers Lack of awareness Lack of skilled manpower High cost of ICT solutions Unavailability of benchmarks Lack of incentives for builders to consider ICT for energy efficiency Demand side constraints of urban transport sector Demand side constraints of municipal waste management Barriers faced by data centres Although there is substantial potential for achieving energy efficiency through the application of ICT solutions in the focus sectors of the mission and a number of these solutions are commercially available, the penetration of these solutions in the market is low. There are number of barriers, ranging from generic roadblocks, such as lack of awareness, to more sectorspecific constraints, such as lack of financial resources at the level of urban local bodies (ULBs), that need to be addressed before we can fully realize the potential role of ICT in the National Mission on Sustainable Habitat (NMSH). The policies and initiatives required by stakeholders will have to be designed in such a way that they address one or more of these barriers. The key barriers that inhibit the full-scale adoption of ICT in the habitat sector are given in the box below. Recommendations for Sustainable Habitats through ICT Adoption Full-scale adoption of available ICT coupled with policy interventions can lead to significant CO 2 reduction in these three sectors. Through this report, we have endeavoured to quantify this reduction potential. It is to be noted that reliable projections for motorized mobility, building space and dematerialization are not available from any single source; they have been compiled from various sources and interviews to estimate the trend of baseline emissions from the focus sectors. Determining and predicting greenhouse gas emissions from the transport sector is difficult, as there are numerous small emission sources and, additionally, it has a close relationship with economic development. It is also very difficult to predict the effectiveness of solutions for the buildings sector, as the quantum of savings enabled by these technologies differs widely from building to building, depending on operator efficiency, occupancy patterns, climatic parameters, building characteristics, usage profiles, etc. However, it is seen that the implementation of ICT- Supply side barriers Lack of financing mechanisms Lack of standardization Limited alternatives on the supply side 15

18 Variation of property tax in France Since September 2005, new buildings respecting environmental criteria can be exempted of property tax for years. Buildings should respect at least four of the following five criteria: 1) environmental conception and implementation of an environmental management system; 2) environmental nuisance and waste minimization during construction; 3) energy consumption for space and water heating interiors to regulatory levels; 4) use of renewable materials and energy sources; and 5) implementation of energy saving measures. Tax incentives Commercial buildings, US A tax deduction of up to $1.80 per square foot is available to owners or tenants (or designers, in the case of governmentowned buildings) of new or existing commercial buildings that are constructed or reconstructed to save at least 50% of the heating, cooling, ventilation, water heating, and interior lighting energy cost of a building that meets ASHRAE Standard Partial deductions of $.60 per square foot can be taken for improvements to one of three building systems that reduce total heating, cooling, ventilation, water heating and interior lighting energy use by a certain percentage the building envelope (10%), lighting (20%), or heating and cooling system (20%). based solutions in these sectors can yield significant GHG emission reductions in the 2030 scenario if employed judiciously. For the third focus sector, only dematerialization options have been focused on as measures to reduce solid waste generation, as the reductions from recycling are found to be low. The technologies explored in the transport, buildings and solid waste management sectors can lead to total cost savings of INR 26,300 crore in 2020 under the moderate scenario. To put this into perspective, this is approximately 0.5% of India s GDP for the financial year. The recommendations for achieving habitat mission objectives through the use of ICT can be categorized as follows: Defining the strategic roadmap for ICT adoption towards NAPCC/NMSH and setting up a mechanism for effective execution and monitoring Providing supply and demand side fiscal incentives to reduce the high cost of ICT solutions. Some of the initiatives taken by other countries to promote ICT adoption in buildings are given in the box. The same can be referred while articulating policies for ICT adoption in India. Promoting education, research and outreach to increase the awareness and availability of skilled resources Promoting standardization and localization of technologies to reduce the initial and running cost of ICT solutions In certain focus areas, taking the regulatory recourse for higher ICT adoption Applying ICT for implementation of habitat mission and to increase information availability for policy makers and end users National Solar Mission (NSM) The Solar Mission focuses on promoting solar power generation in the country and achieving a total grid connected installed capacity of 20,000 MW by the year With this is mind, the study identifies ICT applications which can help meet the objectives of the mission, primarily with regard to integration of solar power plants with the grid and thereby contribute to GHG emission savings in the national power grid. As the Solar Mission gathers momentum, ICT-based solutions will play a critical role in ensuring its effective implementation. However, currently the penetration of ICT for solar power is very limited and much needs to be done to promote existing technologies and also to develop new technologies. There are existing barriers to ICT adoption for solar power that need to be addressed and then collective efforts needs to be made by various stakeholders 16

19 to achieve the benefits that ICT can bring about for solar power. Successful integration of solar power with the grid, especially for small-scale generation, will require replacement of traditional one-way power flows with two-way power flows and additional communication capabilities. By applying ICT-enabled solutions, which are essential components of a smart grid system, efficient integration of solar power with the grid can be achieved. Once individual generating stations are connected to the grid, ICT can help in further reducing transmission and distribution losses. Our analysis revealed that implementation of the identified ICT-based energy efficiency solutions can potentially save electricity to the tune of about GWh per annum in the year 2020 and GWh per annum in the year 2030, assuming moderate and high penetration of the identified ICT solutions is achieved. The energy savings will translate into GHG emission savings of about million tco 2 per annum in the year 2020 and million tco 2 per annum in the year In the very near future, breakthroughs in nanotechnology promise significant increase in solar cell efficiencies from current 15% values to over 50% levels. These will, in turn, reduce the cost of solar energy production. Capital costs have substantially declined over the past two decades, with solar PV costs declining by a factor of two. Solar-specific tariff is targeted to decline from an estimated high of INR 18 per kwh to INR 4-5 per kwh or lower by , making solar energy competitive with respect to other fossil fuel-based power sources. However, the realization of cost reductions is naturally closely linked to market development, government policies, and support for research and development. As highlighted by the adopters of ICT for solar energy, the initial cost of implementation of these technologies is high and in the absence of fiscal and regulatory push, there is lack of inclination to implement the technologies. Various policy interventions are required to ensure that these barriers to technology adoption are lowered. Without the policy support by the government in the form of fiscal incentives, regulatory mechanism and institutional framework, there is a potential risk of not fully leveraging the available ICT. Against this, a right ecosystem created through these policy interventions can lead to substantial energy savings and GHG reduction. The recommendations for achieving Solar Mission objectives through the use of ICT can be categorized into the following key areas: Promotion of Solar Information and Monitoring Network Link all solar installations of the country through a communication channel with the state and national-level monitoring centre. Such an infrastructure will aid in effective groundlevel tracking of the JNNSM initiatives and will provide the policy makers with a one-stop source for gathering all the information on solar power generation in the country. Establishment of Knowledge Network for Solar Power Leveraging ICT, a knowledge network for solar power can be established that can focus on activities relating to information availability, education and outreach. One of the focus areas of the knowledge network can be promoting use of ICT for solar power generation and transmission. Specific R&D support to ICT for solar ICT for solar power is still evolving and there is no detailed research on leveraging ICT for solar power in domestic context. These challenges can be addressed through focused R&D funding and establishment of CoE for ICT for Solar. The CoE can also adopt a pilot project based model to demonstrate the use of ICT for solar power. Overall proliferation of smart grids To ensure that the interfacing with grid do not become a hurdle for promotion of solar power, it is essential that the implementation of smart grids is fast-tracked. The ability to integrate the distributed solar power generation into the grid will depend on the maturity of grids to enable two-way power flow, dynamic pricing and accurate metering. 17

20 Annexure: Identified ICT solutions for the 3 Missions of NAPCC considered under the study Sector Cement Iron and Steel Pulp and Paper Power Fertilizer ICT solutions for focus sectors of the Mission on Enhanced Energy Efficiency ICT solutions Fuzzy logic Model based multivariable predictive control and optimization Kiln control systems Grinding optimization systems Computerized mine planning Energy management systems Robotech Laboratories Quality Control RoboTech Laboratory Layout for Cement plants Sinter Expert Systems Coke oven automation systems Advanced Process Control Blast Furnace Expert Systems DRI expert Systems Slag Monitoring and Detection Systems Electric Arc Furnace Process Control Systems Rolling Mill Automation Comprehensive Gas Management Energy Management and Advanced Control Systems Variable Frequency Drives Programmable Logic Controller SCADA systems Distributed Control Systems Quality Control Systems Advanced Process Control and optimization systems Integrated burner management systems Boiler control systems Turbine control systems Comprehensive power plant performance and energy management system Transformer asset optimization tools Power delivery optimization Demand optimization technologies Digitized substation solutions Transmission optimization solutions Distribution optimization Smart metering solutions for advanced metering infrastructure Network Engineering and mobile workforce management Smart appliances Advanced process controllers Energy management systems Primary reformer optimization Ammonia synthesis reaction control 18

21 Aluminium Chlor-Alkali Railways Textile CO 2 removal optimization Catalyst performance software Complex-wide or site-wide optimization Process optimization systems Advanced process controllers Production scheduling Alloy sequencing Advanced cell controls Process optimization systems Energy Management systems Train scheduling solutions Train operation optimization solutions Automatic train protection and automatic train operation Compressor control systems Variable Frequency Drives Energy Management Systems ICT solutions for focus sectors of the Mission on Sustainable Habitat Sector ICT solutions Transport Mobility Management Systems Supply chain and logistics optimization Telecommuting Buildings Videoconferencing Design phase tools Building design and simulation tools/softwares Operation phase tools (Building Management Systems, lighting controls, HVAC controls) Intelligent Street Lighting Systems Dematerialization Advanced Energy Distribution Systems Dematerialization ICT solutions for the Solar Mission Integrated system architecture Enhanced communication systems Energy Management Systems Adaptive logic controllers Energy storage systems 19

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