It is not only the industrial sector that is consuming increasingly more electricity in India, most of which is still being generated from coal. India's growing middle class is also contributing to the growing demand. That is why India is not merely increasing its generating capacities, for example by expanding renewable energies. Rather, the government is also intent on managing existing resources more carefully. One area where this potential can be realised are buildings, as in Germany. Insulated walls, double or triple glazed windows and efficient building technologies can conserve much of the currently required energy.
Until today, energy efficiency in buildings – in particular in the residential sector – has received limited attention in India. This has been due to relatively low electricity tariffs, a fledgling market for energy-efficient materials, and the lack of efficiency standards for building materials and energy performance of buildings. So the issue was taken up under Indo-German Financial Cooperation. KfW was entrusted by the Federal Ministry for Economic Cooperation and Development (BMZ) to promote the implementation of a Programme for energy efficiency in new residential buildings. Here, KfW draws on its decades of experience from financing home builders in Germany.
In order to set up a similar system in India, KfW initiated in 2010 a collaboration between the Fraunhofer Institute for Building Physics and “The Energy and Resource Institute” (TERI) in New Delhi to adapt an existing German calculation model for the energy assessment of buildings to the conditions in India. This research partnership was launched in 2010 and features as a task force in the Indo-German Energy Forum, which is being sponsored by various German and Indian ministries. The methodological basics of the tool, which is now being used on the subcontinent as well, are already established in Europe and have contributed to standardising the energy accounting of buildings within the EU.
The tool (www.ittoolkitindia.com) calculates the energy need of a building as a whole and the potential savings offered by active and passive energy efficiency measures based on the building design.
KfW is at the same time extending a line of credit of EUR 50 million to the National Housing Bank (NHB), which channels the funds to commercial banks which provide loans for energy efficient homes. New residential buildings that due to the implementation of passive energy efficiency measures (regarding the design of the buildings) need at least 18 per cent and in case of the additional implementation of active energy efficiency measures (e.g. energy efficient air conditioners) need 30 per cent less electricity than the standard building receive a certificate that entitles the buyer to a loan refinanced by NHB under the Programme.
The tool developed by Fraunhofer and TERI is used to calculate the energy performance in comparison to the standard based on the building design. The clear-cut eligibility criterion is the overall energy-savings result from the assessment rather than the individual measures achieving the reduced electricity demand. The next step will be to support the Indian side in defining and introducing an energy efficiency label in close cooperation with the Bureau of Energy Efficiency (BEE), a statutory body under the provisions of India’s Energy Conservation Act from 2001.
The so-called “KfW Efficiency House” label is firmly established in Germany and highly coveted on the real estate market. Only buildings whose energy consumption is 30 to 60 per cent below the standard receive such a label and qualify for the low-interest KfW loans in German. The energy efficiency label is to be applied in India like in Germany - along with the corresponding financial support.