About the SME CleanTech Program
India’s manufacturing sector is rapidly growing, and with that growth comes increased greenhouse gas emissions from a sector that already accounts for more than a quarter of emissions from the world’s fourth largest emitter.
Through its MacArthur-funded SME CleanTech program, the Institute for Sustainable Communities (ISC) is reducing greenhouse gas emissions by expanding usage of energy efficient, clean technology solutions among small and medium enterprises (SMEs).
These smaller factories make up a substantial part of India’s manufacturing sector, but often lack information about energy efficiency technologies. To significantly speed their adoption, ISC is supporting the demonstration of proven energy efficiency technologies and training local energy efficiency providers to provide ongoing services and technical assistance to SMEs at scale.
Drawing on the knowledge and insight gained through practical experience, ISC and its partners are contributing to the development of Indian government policies designed to increase resource efficiency in the industrial sector, align with India’s COP21 commitments, and reduce carbon and other harmful emissions in India.
Motor Replacement Pilot Project
As part of the CleanTech program, ISC recently partnered with an energy efficiency venture arm of India’s Ministry of Power, Energy Efficiency Services Limited (EESL) to prepare for launch of its National Motor Replacement Project (NMRP).
Motors are a very common technology in manufacturing; they contribute approximately a quarter of industrial emissions, and Indian experts estimate that 80% to 85% of India’s current industrial motors are the least efficient IE1 rating. This market saturation presents an opportunity to leapfrog past the slightly more efficient IE2 level all the way to the much more efficient IE3 level, which is currently the standard in countries such as China, USA, and the European Union.
Under NMRP, EESL bulk purchases a large amount of IE3 motors upfront, and distributes the motors to Indian industries free of charge – recovering that upfront bulk purchase cost through the financial returns generated from energy savings over a 12-18 month period.
EESL’s phase one goal is to replace 120,000 motors with energy efficient IE3 motors for a wide range of uses such as pumps, compressors, and drive systems. Based on the response of phase one, EESL will ramp up the NMRP to over 600,000 motors over the next three years.
ISC will assist EESL in their goal of scaling up the adoption of efficient motors – by testing assumptions, building the business case, educating manufacturers, and driving demand. With EESL, ISC is replacing 30 motors in diverse small and medium enterprise use cases as a demonstration. These motors will be monitored closely to develop the business case for replacing inefficient motors, and EESL has agreed to set aside thousands of motors targeted to SMEs on completion of the pilot at ISC’s request.
The pilot will:
- Use rigorous methods to confirm that motor upgrades actually save money.
- If motor upgrades do save money, determine how much on average could be saved.
- Using that savings data, build a business case for motor replacement (quantum and payback period after EESL provides an initial investment in the replacement).
ISC is bringing its experience in Indian industrial sustainability to bear – working with industry associations across the country to educate manufacturers and encourage participation in the program.
Through an in-depth analysis of India’s industrial sectors and their power usage, ISC selected pilot SME target areas in Jamnagar and Surat with a third target area to be finalized. Within the two established pilot areas, ISC and EESL identified twenty motors for replacement and obtained buy-in from SMEs housing the motors to participate in the pilot project – agreeing to share valuable data on their energy usage and cost savings.
To track progress and accelerate demand, ISC will work with EESL to develop an online dashboard and portal for the National Motor Replacement Project. The portal will allow factories to request replacement of their inefficient motors (with in-person as well as pen-and-paper approaches available too).
The pilot project will be completed by mid-November leading to the national NMRP kickoff by November’s end. We will track GHG reductions achieved through this program which are expected to be significant.
Building the Portfolio
While ISC contributes to the pilot phase of the NMRP project, we will continue to deliver on the overarching goal of the SME CleanTech program supported by MacArthur Foundation: identify other efficiency technologies and carry out capacity building with SMEs throughout India thus assisting SMEs to learn about, and subsequently implement, energy efficiency solutions.