SMEs need to welcome energy efficient practices: Rao | SupportBiz

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SMEs need to welcome energy efficient practices: Rao

 
Tags: TERI, MSMEs, BEE, DPR
The Energy and Resources Institute (TERI), with its two centers in Delhi and Bangalore, has been working with Micro, Small and Medium Enterprises (MSMEs) since late 1980s, helping them with expert analysis and practices to improve industrial energy efficiency.

The organization is involved with designing various concerted programs of research, consultancy, training, and information dissemination for big and small players in achieving energy efficiency.

In an exclusive interview with SupportBiz, G Rudra Narsimha Rao, Associate Director of TERI, Bangalore explains the organizations projects and attribute them to the benefits of SMEs.

On TERI’s various programs:

We have been associated with the SME sector since late 1980s. Our programs were supported by the Swedish Development Corporation initially. The programs were sector specific where we used to identify sectors where technology could penetrate to support SMEs in energy reduction as well as energy conservation. Expenditure on energy usually takes up to 60 percent of overall spending and this is where we wanted to use the right technology to bring the costs down considerably.

From 2007-2008, Bureau of Energy Efficiency (BEE) has taken up these programs and TERI started working with BEE as a cluster management program.  BEE’s program is all about using the expertise and analyzing the Detailed Project Report (DPR). DPR usually comes after an initial project report which decides if an industry can take up the energy efficiency methods itself without any investment or otherwise. Only when there is a need for investment identified, the DPR comes to play. The DPR is being handed over to BEE which will collaborate with other players like Small Industries Development Bank of India (SIDBI) to provide the funding for such initiatives.

On its current project:

TERI is currently involved with the India-MSME Energy Efficiency Project, a joint initiative by Global Environment Facility (GEF) and the World Bank through SIDBI and BEE. The core objective of the project is to improve efficiency and reduce GHG emissions through commercial investments in energy efficiency goods and services in target Small and Medium Enterprise clusters.

The World Bank-funded project is a three-year program and TERI is a consultant where we do the initial walk-through study, explore the potential, educate and convince the MSMEs about the need for better energy efficiency practices with quantitative data and then do the detailed project which is called the Investment Grade Detailed Project Report (IGDPR).

Total GEF funding under the project available to SIDBI is $9.05 million to be utilized over a period of four years. In addition to the grant to SIDBI, GEF has also provided a grant of $2.25 million to the BEE.

How does this project help MSMEs?

The benefits are quite visible here. Apart from the financial backing for implementation of energy efficiency, the prerequisite detailed study that comes along with this project is made available to SMEs free of cost. If an SME wants to have a study of this kind on its own, it would cost them a great deal of time and money.

How is the response from SMEs so far?

All that the SMEs need to contribute is their willingness and interest in participating in the project. The detailed project report is free of cost and with the DPR, they can approach SIDBI which is ready to fund them. The response so far is good. We find at least 25 percent of units are taking up the implementation process themselves based on the study results. SMEs requiring major investments for the implementation are approaching SIDBI for funds.

Other activities of TERI:

We do a lot of workshops, conduct interactive discussion forums, and deliver case studies etc in collaboration with Small Scale Industrial (SSI) units for SMEs. Our expertise and experience in research are shared with them free of cost.

The major challenges in energy efficiency in SMEs:

If I have to list a few key challenges, they are:

 - High rate of employee attrition.

 - Unskilled manpower.

 - Use of inappropriate equipment.

On TERI’s initiative to advocate/convince big players to help their tiny vendors in energy efficiency: 

Economic giants involved in the manufacturing apparently have thousands of vendors from whom they purchase components.  While these big companies are very efficient, the small component makers are neither aware of the energy efficiency or emissions practices nor they are really worried about them. So, the pollution control board has now placed a hook on them. So we are talking, advising and directing these big players to help/fund their tiny vendors to be energy efficient through a seed amount or interest-free loans. The big business houses can do this in so many ways as they have a variety of channels to do it like their CSR activity.

Comments

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