Energy and efficiency: on India and greater energy efficiency mandates

Despite robust growth in electricity generation over the past two decades, with rapid additions of renewable energy in the past five years, India has been unable to meet its peak power demand, with the deficit widening from 0.69% in FY20 to about 5% in FY24. This reveals constraints in the supply of power — new power production is time consuming, especially if fossil-fuel based, even as India attempts to integrate renewable power into the power grid. Therefore, India must focus on enhancing energy efficiency holistically to reduce power demand, also the quickest and least expensive way to address rising power demand and climate change. This year marks a decade of India’s groundbreaking energy efficiency scheme, UJALA, which has helped bring down the price of energy efficient light emitting diode (LED) bulbs from about ₹500 a decade ago to ₹70, enabling its widespread home use. The scheme succeeded as another public energy efficiency measure was baked into the initiative — the Street Lighting National Programme, which led to the installation of over 1.34 crore LED lamps across urban local bodies and gram panchayats, and reducing peak demand by over 1,500 MW. As of January 2025, the government has distributed about 37 crore LED bulbs and enabled the sale of about 407 crore more.

LED bulbs consume half the amount of power of compact fluorescent lamps, while incandescent light bulbs require nine times the power that LEDs consume, translating into considerable cost savings for Indian homes. But estimates also suggest that the UJALA scheme alone has helped India save over $10 billion and avoided building over 9,500 MW of new generation capacity, which is the equivalent of 19 new coal-fired 500 MW power plants. Indeed, there are other energy efficiency measures that India has taken following the enactment of the Energy Conservation Act, 2001. The International Energy Agency states that between 2000 and 2018, energy efficiency improvements enabled India to avoid an additional 15% of energy demand and 300Mt of CO₂ emissions. But with India’s rapid urbanisation in the past two decades and rising per capita energy consumption to meet cooling needs as summers get hotter, peak power demand reached 250 GW last year. India is today the third largest power consumer globally, after China and the United States. Moreover, 70% of its energy output continues to be from coal and India has plans to add another 90 GW of coal-based capacity by 2032. What is needed now is greater energy efficiency mandates across sectors such as buildings, home appliances and the country’s sprawling MSMEs.