India Needs Energy-Smart Building Construction to Solve Energy Crisis and Realize Billions in Savings

Cities are booming throughout India, with workers and cranes speeding to construct new high-tech computing centers, offices, and residential buildings. But with this massive building construction underway, India has a huge opportunity to cash in on an energy resource often overlooked—energy efficiency. Two major developments today—the landmark plan to operationalize a building efficiency code by 2013 announced in the Indian state of Andhra Pradesh, and a new report released by NRDC—are spotlighting the dramatic savings India could unleash with smart energy efficiency strategies.

With the world’s second-fastest growing economy, India’s energy demands are skyrocketing. Just this summer, the world’s largest blackouts left over 600 million people without power. And on a daily basis, cities like Hyderabad, a hub for high-tech, energy-intensive companies like Google and Cisco, experience multiple hours of power outages. As a result, buildings are equipped with diesel generators, which spew pollution into the air as they work to keep India’s lights on, computers running, and economy buzzing.

NRDC’s new report, released in partnership with the Administrative Staff College of India (ASCI), shows that energy efficiency is the fastest, cheapest, and cleanest way for India to gain significant ground on meeting its colossal energy needs. By incorporating modern, energy-saving technologies in new buildings, India could save billions each year, improve its energy security, and spark new clean energy markets.  In fact, according to McKinsey & Company, unlocking energy efficiency in new building construction, as well as improving appliance and industrial plants’ efficiency, could deliver $42 billion (Rs. 2 lakh crore) in annual savings to India by 2020.

Our report comes on the heels of a landmark announcement coming out of the state of Andhra Pradesh today. The state is on its way to operationalize the national Energy Conservation Building Code (ECBC) by early 2013 to ensure that buildings meet minimum energy efficiency standards when constructed or renovated. The ECBC sets energy efficiency standards for the most energy intensive building features, capturing energy savings where they can be the greatest – the building envelope (walls, roof, windows), lighting, HVAC system, and electrical system.  Andhra Pradesh has also constituted a high-powered Steering Committee and Technical Committee, chaired by municipal officials, to oversee statewide code implementation. As an energy-intensive industrial hub, the capital city, Hyderabad, will be better positioned to meet growing energy demand as it expands with these efficiency standards in place.

India needs bold energy efficiency initiatives like this across the country. Seventy percent of the buildings that will exist in India by 2030 have yet to be built. That means that India has a singular opportunity to realize tremendous savings by incorporating the energy efficient lighting, windows, and air conditioning into these new buildings right now, at the design and construction stages. In developed countries, like the United States, we’re seeing how costly it is to make buildings more efficient with large-scale retrofits. India can build smart from the start, putting energy-saving measures in place to last for decades.

Our report offers recommendations for state and local governments in India, real estate developers, and financial institutions, to realize these savings:

Develop efficiency codes and implementation strategies: State and local governments should accelerate energy efficiency by adopting local energy efficiency building codes, developing effective implementation and compliance structures, providing training programs on building efficiency, and offering policy incentives for efficiency projects. These activities should be directed by newly created local steering committees, comprised of key specialists from state, policy, technical and real estate stakeholder groups.

Facilitate efficiency awareness among developers: Efficiency measures pay for themselves and lead to significant cost savings—facts that are not universally understood in India’s developer community.  Real estate developers can lead in this area by identifying case studies and encouraging peer-to-peer education about cost-saving opportunities. Developers should also work with state and local governments to encourage incentives for efficiency projects.

Encourage Innovative Financing:  Financial institutions are critical to reducing upfront costs for efficiency measures. These institutions should work with real estate developers and other stakeholders to provide creative financial mechanisms that encourage energy efficiency in building construction, upgrades, and purchasing. Financial institutions should also develop a rigorous and transparent data source of energy efficiency implementation and savings, and facilitate peer-to-peer learning among investors so that they can better assess risks in the efficiency market and understand market opportunities.

In only two years under the National Solar Mission, India has already jumpstarted a domestic solar market in both photovoltaic and concentrated solar power technologies. Energy efficiency offers the same opportunity – with new policies, efficiency codes, and investment incentives, India could spark enormous new markets in efficient construction and technologies. And with other emerging economies already investing heavily in energy efficiency, India needs to keep pace to compete in the global clean energy market.

With its current energy crisis, India urgently needs to build energy-smart cities that will support economic development and save billions of dollars each year. With states like Andhra Pradesh already taking the lead in energy efficiency, we look forward to seeing energy efficiency become a priority across all of India.

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