India’s Energy Efficiency Services Ltd (EESL) plans to offer 600 million LED (light-emitting diode) bulbs in rural areas at ₹10 per piece, without any government support or subsidy, according to a top executive at the state-run firm.
The lowest globally priced LED bulb to be offered by EESL by leveraging scale, will comes as a boost for Make in India and will also give India’s climate change strategy a shot in the arm under the proposed Gram UJALA (Unnat Jyoti by Affordable Lighting for All) scheme.
EESL, that is presently running the world’s largest domestic lighting programme, is in the process of registering the Gram UJALA scheme under the United Nations’ Clean Development Mechanism (CDM), that will enable it to claim carbon credits. The government’s UJALA scheme had cut LED bulb prices to₹70 apiece from around ₹310 in 2014. Under the new scheme, the revenue earned from carbon credits will contribute ₹60 per LED bulb piece, with the balance ₹10 to be paid by the rural consumer.
“We realised that a rural consumer isn’t able to pay ₹70 per LED bulb. Under the proposed scheme, we will be taking back the consumer’s incandescent and CFL (compact fluorescent lamp) bulbs and provide this LED bulb for ₹10 a piece. The balance cost and our margin will be recouped through the carbon credits earned,” Saurabh Kumar, executive vice chairperson, EESL Group, told Mint in an interview on Saturday.
It has been observed that less than one fifth or only 18% of the 360 million LED bulbs distributed under the UJALA scheme was in the rural areas.
The Gram UJALA scheme will also help improve energy access in rural areas, with the mandatory domestic manufacturing clause in sourcing LED bulb tenders expediting India’ efforts to become an integral part of global supply chains, as firms look to move production lines out of China following the coronavirus pandemic that originated in Wuhan.
In the first phase of the new scheme in the works, 10 million LED bulbs will be offered. Of the total investment requirement of ₹4,000 crore, rural consumers will pay ₹600 crore with the balance ₹3,400 crore accruing from carbon credit revenue.
“The moment that the scheme is registered under CDM, we will launch Gram UJALA,” said Kumar.
This comes in the backdrop of the Indian government restricting companies from countries with a shared land border from participating in bids for government procurement without approval from competent authorities and ensuring compulsory purchase preference to local suppliers.
India is running the world’s largest energy efficiency programmes, with EESL offering large procurement contracts in the energy sector enabling businesses to leverage scale and achieve economy to bring down prices.
According to EESL, India offers a compelling reason for investment in combating climate change. In developed economies, while it takes an investment of around $100-$200 for one tonne reduction of green house gases, in India for the same quantum of green house gas reduction, the investment is pegged at $10-$40.
India is the biggest emitter of greenhouse gases after the US and China, and among the countries most vulnerable to climate change. India plans to reduce its carbon footprint from its 2005 levels by 33-35% by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.
EESL, a joint venture set up by NTPC Ltd, Rural Electrification Corp. Ltd, Power Finance Corp. Ltd and Power Grid Corp. of India Ltd has also been conducting price discovery exercises for International Solar Alliance (ISA), by aggregating the demand from ISA member nations for solar-powered agricultural pumps. The tender achieved global disruption by bringing down the cost of such pumps by half.
It is currently running the largest global solar home system’ price discovery tender, for the ISA member nations for a potential order of 47 million home power systems, valued at around $28 billion, reported by Mint on 6 August. The first phase will be for 9.3 million home power system—each comprising of a solar panel, battery, LED bulbs, fan and charging port for radio, TV and USB—with the bids to be submitted by 31 October.
According to EESL, India is currently the second-largest LED market in the world by value, with the UJALA scheme likely to help avoid peak electricity demand of 9,428 mega watt.
People living in villages will no longer have difficulty in buying light bulbs. Energy Agent Services Limited of India plans to make about 60 crore bulbs available in rural areas at a rate of Rs 10 per bulb. Let us show you how to get an LED bulb for Rs. In 10 rupees. The scheme also has no subsidy or government help scheme.EESL’s efforts are believed to accelerate Make in India and advance India’s climate change strategy. This is also believed to give impetus to the Gram Ujala scheme.
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EESL is currently running the world’s largest lighting program
Similar to the government’s Ujala scheme, LED bulbs, which were sold at Rs 310 in 2014, have now come down to Rs 70. But now people in the village will pay Rs 10 for these bulbs and the remaining Rs 60 will be given under the revenue coming from carbon credit work. Let it be known that the government is running the Village Ujala Scheme like the United Nations Clean Development Mechanism CDM. Which has the advantage of claiming a carbon credit.
Only 18 per cent of the villages were distributed in rural areas under the Ujala scheme
Only one-fifth of the 36 crore LED bulbs, i.e. 18 per cent, have been distributed in rural areas under the Gram Ujala scheme. The delivery of electricity to rural areas will also get a boost under the Gram Ujala scheme. Many companies are preparing to pull out of China due to the Corona virus epidemic. EESL’s move will draw its attention to many other companies.
1 crore LED bulbs will be offered under this scheme
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First, 1 crore LED bulbs will be offered under this scheme. A total of Rs 4,000 crore will be invested for this. Out of which Rs 600 crore will come from rural consumers. And the rest will be met from carbon credit card revenue. With such efforts all bulbs will be offered. According to EESL, India is the largest market for LED bulbs in the world. The Ujala scheme will also be able to ensure power supply.