India aims at $8.9 billion in energy efficiency cost savings

New Delhi / Bloomberg

India’s plan to replace energy-intensive appliances with more efficient designs is expected to save as much as 600 billion rupees ($8.9 billion) a year, according to the head of the government arm spearheading the country’s drive.
The federal power ministry’s plan to replace incandescent lights with LED bulbs and use energy-efficient irrigation pumps, fans and air conditioners can cut about 30 gigawatts of peak-hour generation demand in three years, said Saurabh Kumar, managing director of Energy Efficiency Services Ltd., a joint venture of four government-run power companies. That is equivalent to fivefold the peak summer needs of the capital New Delhi.
Prime Minister Narendra Modi has emphasized efficient energy use to conserve resources and help curb environmental damage in a fossil-fuel driven economy. The plan is crucial to fulfilling his promise of providing around-the-clock electricity to every household by 2019.
Cost-saving estimates are calculated using a power price of 4 rupees per kilowatt hour. The LED bulbs programme is expected to result in savings of about 100 billion kilowatt hours a year, while replacing half of the 20 million irrigation pumps will result in annual savings of 25 billion kilowatt hours. Another 25 billion kilowatt hours a year of savings are expected from efficient air-conditioners, Kumar said.
Modi’s goal of universal power is hamstrung by money-losing state distributors that struggle to pay for electricity, which ends up resulting in outages and idle generation capacity. The nation’s coal-fired plants used an average 68 percent of their capacity in April, according to data from the power ministry’s Central electricity Authority. The efficiency drive adds another challenge for the power producers.
“Clearly the space for conventional power producers in India is shrinking,” said Debasish Mishra, a partner with Deloitte Touche Tohmatsu LLP in Mumbai. “It’s possible that we may see hardly any thermal capacity addition in the next five years.”

India ranks 35
in WB’s logistics performance index

Mumbai / Tribune News Service

India’s logistics performance at its key international gateways has improved in the last two years, according to a World Bank report.
In the World Bank’s biennial measure of international supply chain efficiency, called Logistics Performance Index, India’s ranking has jumped from 54 in 2014 to 35 in 2016.
While Germany tops the 2016 rankings, India is ahead of comparatively advanced economies like Portugal and New Zealand.
In 2016, India’s international supply chain efficiency was at 75 percent of top-ranked Germany, said the report titled Connecting to Compete: 2016 Trade Logistics in the Global Economy. This is an improvement over the 66 percent efficiency when compared to the leader (again Germany) in 2014.
India has an average of 5 forms required for import or export, compared to
4.5 for China and 2 for
Germany.

Better performance in logistics will not only boost programmes, such as Make in India, by enabling India to become part of the global supply chain, it can also help increase trade. In 2015-16, India’s foreign trade shrank by around 15%.
The Logistics Performance Index analyses countries across six components: efficiency of customs and border management clearance, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments, and the frequency with which shipments reach consignees within scheduled or expected delivery times.
It is computed from the survey responses of about 1,051 logistics industry professionals.
Programmes, such as Make in India, and improvements in infrastructure have helped India improve its logistical performance, said Arvind Mahajan, partner and national head (energy, infrastructure and government) at KPMG India, a consultancy. He also said that the emergence of skilled professionals and technological improvements that have enabled services such as track-and-tracing have helped India close the gap with leaders.
That said, Logistics Performance Index does not address how easy or difficult it is to move goods to the hinterland. For that, World Bank has another measure—a domestic LPI which analyzes a country’s performance over four factors: infrastructure, services, border procedures and supply chain reliability.
While not all yardsticks are comparable across countries, there are some which show that India still has some way to go.
For instance, only 69% of shipments from India meet the quality criteria, compared to 72% for China and 77% for Kenya. On the other hand, it takes two and three days to clear shipments, without and with inspection, respectively—numbers comparable to China but longer than what it takes in top-ranked Germany.
Similarly, India has an average of 5 forms required for import or export, compared to 4.5 for China and 2 for Germany.
In this regard, the Goods and Services Tax (GST) has the potential to revolutionize the transport industry in India, said Capt. Uday Palsule, former managing director of Spear Logistics Pvt. Ltd. “Inter-state travel time will be drastically reduced if the hurdle of checking documents at every state border is done away with,” he said. It will also help boost the returns of the trucking industry and feed into better performance of the logistics sector, added Palsule.