Chandigarh BDS Cluster

The project organized a workshop titled ‘Promoting energy efficiency in MPC cluster’ on 3rd August 2010 at CII, Chandigarh. The event was attended by over 130 participants including representatives from the four major industry associations of the MPC cluster—namely, Industries Association of Chandigarh (IAC); Mohali Industries Association (MIA); Chamber of Chandigarh Industries (CCI); and Haryana Chamber of Commerce and Industry (HCCI). The aim of the event was to take stock of the progress made under the TERI–SIDBI project in strengthening of business development services (BDS) in the MPC region, and to generate awareness on the benefits of this initiative for the overall development of MSMEs .

In his welcome address, Mr Girish Sethi, Director, Industrial Energy Efficiency Division, expressed appreciation for the support provided to the project by the local industries associations, in particular, IAC. He briefly outlined the project goals and activities, which are focused on three primary areas:

(1) energy efficiency,
(2) skills upgradation,
(3) vendor development (as many MSMEs in the MPC cluster cater to a few large-scale enterprises such as tractor and railways manufacturers). The project has already made a small but significant beginning in promoting energy efficiency by facilitating energy audits in four MSME units by two BDS providers: namely, Delta Energy Nature (Mohali) and Technical & Management Consultancy Center (Panchkula). It has also facilitated the training of 20 workers on CNC machine operation by another BDS provider: Sam Techno School (Mohali). Through identifying and building the capacities of such BDS providers in the MPC region, the project aims to extend energy audit services to more units, facilitate the training of 150 more workers in CNC machine operation, and ‘take BDS to the shop floor’ in order to improve the performance and capabilities of enterprises catering to large-scale clientele, i.e., vendor development.

The introductory address was delivered by Chief Guest Mr S Mukhopadhyay, General Manager, SIDBI-Chandigarh. He spoke on the importance of the MSME sector in the Indian economy in terms of manufacturing output, exports, and employment generation, and observed that the MSME sector has shown steady positive growth over the last few years in comparison to other sectors. He described the transformation of SIDBI from a refinance agency to a direct lender to MSMEs, with a current portfolio of around Rs 38,000 crores and over 100 branches across the country. He outlined the various financial schemes being implemented by SIDBI for the benefit of MSMEs, such as the credit-linked capital subsidy scheme (CLCSS) under which 15% subsidy is available for MSMEs that invest up to Rs 1 crore for technology upgradation in specified equipment/machinery (including energy efficient technology). As MSMEs often express difficulties in raising collateral for bank loans, SIDBI provides loans up to Rs 1 crore without collateral to MSMEs that otherwise conform to lending norms; the only requirement is that the beneficiary deposits 1.25 % of loan amount as guarantee fee. SIDBI also offers concessional rates of interest for MSMEs. As of March 2010 around 3300 MSMEs have availed of benefits under SIDBI schemes; the response from the MPC cluster has particularly been positive, indicating the dynamism of MSMEs in this region. Mr Mukhopadhyay stressed the importance of energy efficiency in improving the profitability of a unit, and cited studies which indicate that energy efficiency measures increase profitability by around 4%; that too in the long-term. He noted the positive outcome of the project’s efforts in the MPC cluster, particularly in regard to awareness generation and energy audits, and said that SIDBI would bear a significant portion of the costs of the energy audits that will be facilitated by the project in the MPC cluster. He added that SIDBI has established an Energy Efficiency Cell in its Mumbai office to promote energy efficiency and cleaner production among MSMEs.

Mr Kanwaljit Singh Mahal, President, MIA, stressed the need for industry to become energy efficient by placing the issue in the context of the energy shortage that India faces today. Considering the challenges India faces in generating more energy, MSMEs must instead make better use of the energy that they are already consuming (i.e. become energy efficient); for, this would not only make MSMEs more profitable but contribute to the overall energy security of the nation. Mr Vishnu Goel, President, Haryana Chamber of Commerce & Industry, Panchkula mentioned that a proposal to conduct diagnostic study of MSMEs in Panchkula is being prepared by a BDS provider; upon completion, the proposal will be submitted to the Ministry of MSME. He acknowledged the effectiveness of energy audits in identifying measures to improve energy efficiency in improving productivity, and called upon his colleagues in industry to come forward and participate in the energy audits being facilitated by the project. Mr Arun Mahajan, President, Industries Association of Chandigarh, assured the active cooperation of his association members in this regard.

Mr Naveen Manglani, President, Chamber of Chandigarh Industries, observed that a major achievement of the project has been to bring together the various industry associations in the MPC cluster in the common cause of improving energy efficiency! Expressing appreciation for the project initiatives so far, he said that energy audits provide unit owners with the opportunity to ‘introspect’, that is, to review their processes and equipment (boilers, furnaces, lighting systems, motors, etc.) from an energy-saving perspective, and to identify and implement measures that would yield savings in energy and production costs. He hoped that suitable vendor development programs would be developed by the project for units that cater to the railways, tractor industry, and other large-scale clientele.  

Mr Upinder S Dhingra, TERI–SIDBI Project Office, Chandigarh, summarized the initiative taken by the project to identify and build the capacities of two BDS providers to conduct energy efficiency studies and energy audits in the MPC cluster, and the highlights of the four energy audits conducted by these BDS providers so far. The project proposes to facilitate 48 more energy efficiency studies/energy audits in the MPC cluster. This will be achieved as follows:

1. Units wishing to participate in the exercise will express their willingness in writing to their respective industry association
2. Based on the consent letters received, the local industries association(s) will nominate units for energy audit and inform TERI accordingly
3. The nominated units will fill up detailed questionnaires
4. Each nominated unit will undertake to (a) contribute 30% of the cost of energy audit and (b) provide the required data and unit-level support for the audit exercise
5. The nominated units will be grouped in lots of 6–8 each based on energy consumption profile
6. A set of BDS providers, capable of conducting energy audits, will be identified and empanelled by the project
7. Each BDS provider will be given the opportunity to quote fees for conducting energy audits lot-wise; quotes can be made for one or more lots

Mr Gurinder J Singh, Delta Energy Nature, made a detailed presentation on the principles and techniques of energy audit. In general, energy saving and energy efficiency improvement can be achieved through two methods: ‘software’ (which includes energy audit and training of workers) and ‘hardware’ (which includes upgradation of existing equipment, installation of new equipment, and improvements in operating practices). Mr Singh drew upon examples from the two energy audits he has conducted to illustrate methods by which a unit can improve energy performance (efficient lighting through replacement of incandescent bulbs with CFLs and whitewashing walls and roof; replacement of low-efficiency motors; furnace insulation; monitoring and optimization of furnace temperature; etc.).  Mr Rohit Aggarwal of Techman India, Chandigarh (where an energy audit was conducted by Delta Energy Nature) affirmed the benefits of the exercise. He observed that units often acquire equipment like motors with capacities in excess of what is required, resulting in power wastage. He added that while energy audits help in identifying areas in which energy efficiency can be improved, it would help if units were also provided with information on vendors/service providers who could implement the energy efficiency measures.

Mr Sanjay Namdeo, Counsellor, Energy, CII–L M Thapar Centre for Competitiveness for SMEs, spoke on the potential for energy efficiency improvement among MSMEs and the key benefits to be derived. The CII– L M Thapar Centre is working with BEE to promote energy efficiency in a number of MSME clusters across India. Its experience indicates that 10% to 40% energy saving is possible through adoption of suitable energy efficient technology and operating practices. Mr Namdeo described in detail the concept and importance of evaluating ‘life cycle cost’ (LCC) of equipment, which includes not only the initial cost of the equipment but also the cost of energy that the equipment will utilize during its operating lifetime. When LCC is used as a basis to compare different equipment options, it is often the case that an option with a higher initial cost in fact has a lower LCC—that is, it will yield higher energy efficiency and therefore be the more economical option in the long term. Hence, rather than go by the initial cost of equipment alone, a unit should evaluate its LCC before acquiring it. Drawing upon case studies of energy audits, he suggested that a unit should follow a three-pronged approach in improving energy efficiency:

1.    optimize capacity utilization of equipment
2.    fine-tune equipment and systems such as lighting, combustion, etc.
3.    undertake technology upgradation where feasible

He concluded by observing that energy efficiency improvement is a continuous process, akin to the great Olympics pole vaulter Sergei Bubka breaking his own world record 14 times; and that it is marked by innovation, as in the case of American athlete Dick Fosbury who was the first to perfect the technique of jumping over the high-jump pole head-first rather than use the traditional ‘straddle’ (feet-first) method; a technique that won him the Olympics gold medal in 1968 and has come to be called the ‘Fosbury Flop’!  

Mr Milind Chittawar, Director, SEETECH Solutions, Nagpur emphasized that energy audit is only the first part of the path towards improved energy efficiency; it is akin to a ‘health check-up’ for a factory, which points out systems and practices in which energy is being wasted. The energy audit must be followed by actual measures to cut down energy wastage, and energy auditors must facilitate adoption of these measures by the unit. Ongoing maintenance of equipment is also vital to ensure energy efficiency in the long term. He spoke on the importance of evaluating the specific energy consumption (SEC) in a process, for SEC aids in benchmarking the performance of equipment and identifying options for increasing energy efficiency.

The workshop ended with a vote of thanks by Mr C R Panesar, Cluster Manager, TERI–SIDBI Project Office, Chandigarh.