Furthering its mission of boosting energy efficiency in India, Energy Efficiency Services Ltd recently launched the National Motor Replacement Programme envisaging replacement of conventional industrial motors by energy efficient IE-3 motors. In this exclusive exchange with T&D India, we have S.P. Garnaik, Chief General Manager (Tech), Energy Efficiency Services Ltd, discussing the various facets of NMRP—the objective, the challenges and the approach. NMRP has the potential to forestall CO2 emissions to the tune of 57 million tonnes per year, estimates Garnaik. An interaction by Venugopal Pillai.
Let us start by understanding the overall objective of the National Motor Replacement Programme (NMRP), in brief.
The primary objective of National Motor Replacement Programme is to enable easier and faster adoption of premium efficiency IE-3 motors by the industry with innovative financing models. Through the approach of demand aggregation, EESL is creating an attractive price and quality product for the industry through our bulk procurement process. The benefits of cost reduction achieved through bulk procurement are passed on to the consumer industries, hence making IE-3 motors more affordable. Further, the Department of Industrial Policy & Promotion (DIPP) recently issued a Quality Control order requiring all imported and domestically manufactured motors to conform minimum IE2 class of efficiency as per the revised IS:12615 with effect from 1st October 2017. We see this as a great opportunity for motor users to leap frog to even higher technology like IE3 class of motors
Further, EESL provides multiple options for financing the project, minimizing the financial risk of the customer. These solutions will not only spur demand in the industry but enable transformation with reduced market prices.
Ultimately, how many inefficient motors will be replaced by efficient ones, and what is the timeframe?
At EESL, we aim to replace 120,000 electrical motors in the range of 1.1 kW to 22 kW in the first phase, which is by September 2018, focusing on pumps, fans/blowers, and compressors. Motors installed in the system which are more than 10 years old, pertaining to efficiency class IE1 or below as per IS 12615 and have been rewound multiple times are being considered for replacement. EESL has also set a target of replacing 500,000 motors in 1.1 kW to 75 kW range by 2020.
From a technical standpoint, please tell us about the efficiency level of IE-3 motors and how it compares with levels below it, say IE-0, IE-1 and IE-2.
It should be noted that there is no nomenclature of IE-0 motor! In fact, motors which are even less efficient than IE-1 are called sub-standard motors. In Indian industries, most of the motor fleet is below IE-1 level (hence sub-standard), thereby giving a clear market for EESL to move to IE-3 level.
In India, what is the current electricity consumption by motors—globally and in India?
Globally, the industrial sector is known to be the largest electricity consumer and 70 per cent of the contribution in this sector is from electric motor systems alone. In India, about 40 per cent of the total electricity consumption is contributed by the industrial sector and electric motor-systems use 28 per cent of the total national electricity, which is reasonably high. In absolute terms, the motor-systems consume about 200-220 billion kwh of electricity in India.
Please discuss the commercial aspect of NMRP. How would bulk procurement positively affect the cost of procurement? Would there be easy-financing scheme for purchasers?
NMRP has been designed on three basic characteristics:
Lesser price as compared to retail price: This is achieved through bulk procurement approach after suitable demand aggregation. We discovered that the price is 20-30 % less than that of retail price for different size of motors. Because of lower price, the overall project cost has become attractive with the payback period less than 1.5 years.
Quality product with extended warranty: NMRP provides 36 months product warranty as compared to 1/1.5 years typically provided by the retail market. Also, as we stipulate the IS: 12615 technical standard, product quality is not compromised. In the 1st phase of procurement of NMRP, EESL has selected braded manufacturers like Crompton Greaves, Siemens, ABB Ltd. and Bharat Bijlee Ltd.
Innovative Financing Mechanism: EESL encourages the industries to participate in this program through ESCO model – here there is no upfront investment to be done by the end user. EESL will invest entirely in the project which will be recovered through 12 quarterly instalments (in 3 years) from the industry. The industry will pay the same from the monetized energy saving.
In the ESCO model, the project cost becomes higher by 50-70 per cent as some components like interest on EESL’s debt and return on equity (RoE) are added up. However, the quarterly repayment to EESL would around 70-80 per cent of the quarterly monetized energy saving. Industry may also go for upfront payment mode by just paying about 10 per cent of the material cost as Project Management cost (PMC) to EESL. For small and medium enterprises (SMEs), EESL offers discount in PMC charges and also in RoE to attract participation.
What practical challenges do you foresee in the implementation of NMRP?
The challenges as we perceive are:
- Quick demand aggregation, which means creation of awareness among the industries regarding this scheme
- Ensuring the supply from manufacturers in a timely manner
- Complaint management
- Disposal of used motors
- Ensuring payment recovery
What will be the financing model of NMRP?
At EESL, we provide financing options that cater to all kinds of customers, truly accelerating the adoption of the premium efficiency IE3 motors. As part of the ESCO model, there are no financial implications for consumers and we invest the entire cost towards procurement of motors, services including walk-through surveys, monitoring and verification along with the 10% project management fees. Under the PMC model, the user incurs the product cost whereas EESL provides the project management support.
We expect that EESL will associate with partners (e.g. industry associations) in the NMRP. Tell us more.
As part of the Clean Tech program, Institute for Sustainable Communities (ISC) partnered with Energy Efficiency Services Ltd (EESL) to implement a project under the National Motor Replacement Programme (NMRP). At EESL, we conducted several workshops with the support of ISC and MOUs were signed with companies including Mahindra &Mahindra and Tata Motors.
EESL has also partnered with International Copper Association (ICA) for demand aggregation through their network of industries. EESL is also in discussion with FICCI and CII to create awareness about the scheme and help in demand aggregation. EESL has also linked this scheme though Ministry of MSME to reach out to SMEs – about 100,000 SMEs are being targeted. EESL has also included the NMRP as one of the technologies in our ongoing GEF-5 project in 10 identified SME clusters.
We understand that domestic ceiling fans are now available with highly efficient brushless direct current (BLDC) motors. Is something on the same lines being done for industrial motors?
Currently, we are not doing anything on BLDC motors specific to this program.
Does India have sufficient manufacturing capacity for IE-3 motors, to support NMRP?
While India does have the manufacturing capacity, there is still a lot of work that needs to be done on this front and manufacturers require more demand to begin with their production lines. At EESL, we have already given a work order to major industrial motor manufacturers including Crompton Greaves, Siemens, ABB Ltd. and Bharat Bijlee Ltd. Apart from manufacturing capacity, there is a need of sufficient NABL accredited laboratories tocater to the testing requirements by the manufacturers. We believe, as the NMRP progresses, the capacity of manufacturers and the laboratories would be streamlined.
Do we presume that all new motors that industrial consumers will install will be IE-3 ones? Would there be any government legislation to this effect?
We will push for policy advocacy through Bureau of Energy Efficiency (BEE) in the Standards & Labeling program of India. EESL will try to bring the electric motors under mandatory S&L program with minimum energy performance standard conforming to IE-2 value. This would certainly push the market of IE-3 motors, hence the NMRP program.
While the Government has put a framework in place for the industry to move towards a low-carbon future, it could push the agenda further by making its agencies and state-owned enterprises use only IE3-rated motors. At the same time, it could encourage SME motor manufacturers to shift to producing IE2 as well as IE3 motors as standard, with the goal of maintaining a healthy equilibrium of supply and demand. The road ahead is for the industry to take up the challenge and replace older motors with energy efficient products – a move that would bring energy savings and international acceptance of their operations.
We understand that a pilot project under NMRP has been implemented. How was the experience?
As part of the Clean Tech program, Institute for Sustainable Communities (ISC) partnered with Energy Efficiency Services Ltd (EESL) to implement a project under the National Motor Replacement Programme (NMRP). EESL conducted pilot studies on 36 motors at Surat, Jamnagar, Ahmedabad and Mumbai across applications like pumps, fans, blowers, air compressors etc. EESL undertook pilot studies of 36 motors on a pan India basis. By quantifying the energy saving and potential of implementation of 36 nos. of IE3 motors across the different motor ratings chosen to be procured as a part of Phase-1.
Hypothetically, if all inefficient (IE-1 and sub IE-1) industrial motors are replaced by IE-3 ones, what would be the energy savings realized. What overall benefits would be realized by NMRP?
EESL did a high-end estimation by considering the IEEMA data which shows that with an average motor rating of 7.5kW and replacement possibility for 15 million motors, the country can be benefitted with about 65 billion units of electricity per year (if the existing non IE3 motors are replaced with IE3 motors). This translates to about 57 million tonnes of CO2 emission reduction per year.
