Anjali Jaiswal, Senior Attorney, San Francisco
Recently in Delhi, my colleague Dr. David Goldstein
and I discussed increasing building efficiency in India’s states at a
high-level meeting held by the Planning Commission, Ministry of Power,
Bureau of Energy Efficiency and key state leaders.
As Dr. Montek Singh
Ahluwalia, Deputy Chairman of the Planning Commission said, the
roundtable discussion of policies to motivate the construction of more
energy efficient buildings was incredibly timely – including the
international best practices discussion from China, the United States
and elsewhere. The discussion also followed last Friday’s launch and the
ensuing buzz about the commission’s new web-based tool, which projects
that India’s energy demand could more than double by 2027.
To overcome common barriers to building green, our latest report, Greener Construction Saves Money: Incentives for Energy Efficient Buildings Across India,
released today, presents solutions and incentives to enable Indian
developers to take advantage of energy efficiency’s significant savings
and the benefits of constructing more sustainable buildings. A central
theme of our report, which was reiterated at today’s roundtable meeting,
is the primary role of state initiatives and mandates in accelerating
the adoption of energy efficient measures in buildings across India’s
cities.
India’s continued economic development depends on
providing more affordable, clean and reliable energy and lessening the
strain on current supplies, presenting an opportunity to real estate
developers who can lock in energy and cost savings by building green. In
addition to reducing dependence on energy imports and increasing energy
security, shifting the market to achieve higher levels of energy
efficiency could offer an incredible payback for India as a whole.
NRDC
and ASCI have also conducted an ECBC energy savings analysis from 2014
to 2030 that reinforces the new Planning Commission’s “India Energy Security Scenarios 2047.”
The NRDC-ASCI expands on the Planning Commission analysis by including
savings from not just the envelope but also, heating, ventilation, and
air-conditioning, and lighting under the ECBC. Our analysis shows, if
states across India adopted stronger building efficiency codes and
developers participated in strong programs for rating commercial
buildings, an estimated 3,453 terawatt-hours of cumulative electricity could be saved by 2030. This is equivalent to powering as many as 358 million Indian homes cumulatively
between 2014 and 2030 based on current annual consumption levels for
electrified homes. Additionally, the energy savings would be a huge
benefit in the fight against climate change, since 1,184 million tons of CO2 emissions could be avoided by 2030, equivalent to the annual emissions from more than 17 coal-fired power plants over the same period of time.
Barriers to Building Green
Despite
the compelling need to curb India’s rising energy demand as
skyrocketing urbanization occurs across its cities, developers cite
common obstacles to building green and locking in energy savings.
Incorporating energy efficient measures may require high upfront costs
and create split incentives between the developers paying for them and
the tenants who enjoy the future lowered energy bills. Furthermore, a
general lack of awareness about the benefits of energy efficiency still
permeates the market. For example, many developers are unaware that
efficiency can literally pay for itself due to the short payback periods
on investments. Finally, without effective monitoring and verification
after construction, building owners lack confidence that incorporated
efficiency measures are saving the projected level of energy and money.
Scaffolding-covered buildings are a common sight and small indicator of the dramatic urbanization occurring across India’s cities (Mumbai, Maharashtra, India). Photo by Meredith Connolly.
Incentives and Motivations to Accelerate Efficient Construction
Our newly-released issue brief, co-authored with our partner, the Administrative Staff College of India
(ASCI) and supported in part by Shakti Sustainable Energy Foundation,
lays out available incentives and opportunities to help developers
overcome these common barriers to building green.
Cities and states across India offer motivations and incentives to build more efficiently, including property tax rebates, the creation of special economic zones and expedited permit processes.
Respected building ratings programs,
such as certification by the Green Rating for Integrated Habitat
Assessment (GRIHA) and Leadership in Energy & Environmental Design
India (LEED India), can also increase property values and motivate
developers to achieve higher efficiency certifications.
Creative incentives such as increased floor space index allowances
are also being developed to encourage greener construction and
participation in these ratings programs. Many states in India have
limits on the floor space index (FSI), a measure of the built-up floor
area of a building relative to the size of the plot it is built on. To
incentivize developers to build green, a portion of this extra FSI may
be given to developers of efficient or green-certified buildings for no
cost, increasing the value of their properties.
Energy Service Companies
(ESCOs)—entities that may pay for energy efficiency investments upfront
and recover the costs through surcharges on future energy savings—also
offer a compelling model to potentially support the financing and
scaling of efficiency upgrades.
Minimum efficiency building codes
can also lock in energy savings and avoid costly retrofits. The Bureau
of Energy Efficiency developed the Energy Conservation Building Code
(ECBC) to reduce energy demand in India’s rapidly expanding cities. The
most recent state to adopt a comprehensive adaptation of the ECBC is
Andhra Pradesh and its high-tech hub of Hyderabad. A prominent feature
of the Andhra Pradesh approach to implementation is a compliance
framework that collaborates with developers and experts (as I recently
discussed here).
As
we make clear in our report, government officials—from central to state
and local levels—can and should work with real estate developers to
develop further policy and regulatory incentives and effective
compliance mechanisms to shift India’s buildings market toward
cost-saving, energy efficient buildings. At this critical juncture in
the expansion of Indian cities, our hope is that this report will shine
light on mechanisms and motivations to lock in energy savings for
decades to come.
http://theenergycollective.com/nrdcswitchboard/349421/new-report-building-efficiency-incentives-and-strong-codes-form-cornerstone-g
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