India: Alliance, Schneider Help Small Businesses Save Energy

With Contributions By: Jenny Corry

March 3, 2011, Tamil Nadu, India — Businesses in India need energy-efficient technology, and the Alliance is helping them get it with the assistance of Alliance Associate Schneider Electric. 

Building on a project that started in 2009, Schneider recently agreed to loan and install energy-saving equipment at small and medium enterprise (SME) businesses in India. This project, funded by the Renewable Energy and Energy Efficiency Partnership (REEEP), aims to help Indian SMEs improve energy efficiency through developing innovative financing and carbon trading mechanisms. 

India’s Small Businesses Pose Opportunity for Big Energy Savings

India has more than 26 million SMEs employing an estimated 59.7 million people.  These SMEs account for 45% of the manufacturing output and 40% of total exports in the country.  Although they comprise a large portion of Indian industry, SMEs have not reduced energy intensity nearly as much as the larger businesses in the country. 

In the state of Tamil Nadu – the target of the REEEP project – SME growth has been explosive across the past decade.  As of 2007 Tamil Nadu had more than 2.5 million SMEs, the second highest number among Indian states.

Helping SMEs Invest in Energy-Efficient Equipment

A primary focus of the SME project is to identify innovative financing options for energy-efficient equipment. With support from Schneider, Pradeep Kumar, acting director of the Alliance India office in Bangalore, started this phase of the project with an energy assessment at one SME: a rice mill in Karekudi, Tamil Nadu.

The assessment found that the mill could save energy by installing cost-effective variable frequency drives (VFDs), which slash energy waste by matching the volume of air moved through a boiler’s fan to the system demand – and Schneider would provide the equipment.

Promoting VFDs, from One Mill to Many

In February, Schneider installed a VFD in the Karekudi rice mill and measured its effectiveness in saving energy with a week-long assessment.  The Alliance and Schneider are now comparing baseline data to energy use after the VFD was installed.  After the analysis, they will share their results with more than 80 rice mills in Tamil Nadu through case studies, future REEEP projects and website publicity.
 
“Successful demonstration of this technology will strengthen the confidence among the mill owners across the region in the cost effectiveness of the VFD applications,” predicts Kumar.  Kumar also believes that the demonstration project will create an attractive business opportunity for Schneider, and spread VFD use to other rice mills in Tamil Nadu.

“Most rice mill owners consider energy efficiency a technical subject and not a business opportunity,” Kumar said.  “Mill owners are interested in implementation of successful technologies, and this demonstration project will help change their mindset and encourage them to invest in energy-efficient equipment.”