Energy Efficiency in India: Current Trends, Policy Framework, and the Way Forward

An in-depth analysis of energy efficiency in India, covering consumption trends, key policies, EV transition, and the roadmap to net-zero emissions by 2070

✍️ Radhakrishnan Dutta

India’s Net Zero Commitments: 

Energy efficiency is one of the major pivots towards India’s goal of net zero emission by 2070. It is also one of the SDG’s of the Paris framework agreement on climate change, 2015. Under sub section 7.3 of SDG 7, enhanced energy efficiency has been marked as a critical milestone for a sustainable future for humanity. Among the Nationally determined contribution (NDC) India submitted to the UNFCC in 2015, one related to energy was to achieve 40% cumulative electric power installed capacity from non-fossil fuel sources. This underscores the importance of energy efficiency in the fight against climate change both nationally and globally.

Energy Consumption Trends and Energy Intensity in India :

As we are moving towards another year taking us closer to the SDG target year of 2030, the nation still largely relies on conventional sources for her energy needs, despite some significant strides being recently made in non renewable energy production. Data from the ministry of statistics and program implementation highlights the steady growth of energy consumption since the baseline year FY 2014-15. Total final consumption of energy surged by 38% between FY 2014-15 and FY 2023 -24. Per capita energy consumption in the country also stood at 18,410 Mega Joule/ Person in the FY 2023-24, while it was 14,682 Mega Joule/ Person back in 2014-15. These data highlight the growing appetite for energy both in the industrial and individual aspects of India over the past one decade. While, it indicates an uptick in economic activities, conventional GHG emitting resources like coal still remains the largest source for energy production in the country. In 2023-24 alone, 79% of total energy supply was obtained from coal, while reliance on other conventional sources like crude oil and natural gas has slightly reduced. Overall energy intensity of the economy; which refers to the amount of energy needed to generate 1 INR of GDP, marginally reduced to 0.2180 Mega Joule per INR in 2023-24 from 0.2192 per INR in FY 2022-23.

   While these statistics point towards a mixed performance in energy efficiency in the country, steady growth in renewable and non-fossil fuel based energy production during the same period is a source of optimism. In 2023, the country met the NDC goal of achieving 40% cumulative electric power installed capacity from renewable sources by reaching 186.46 GW of energy from such sources. The report “India Energy Scenario: For the Year 2023-24”, published by BEE shows the rise of renewable energy capacity from 76 GW in 2013-14 to 191 GW in 2023-24. India has set the ambitious target of 500 GW energy capacity from renewable sources by 2030.

Institutional Framework for Energy Efficiency in India :

 The Energy Conservation Act, 2001 governs the country’s energy efficiency roadmap. Under the provision of the act, Bureau of Energy Efficiency ( BEE) came into existence with the mandate to recommend central government on the subject as well as to formulate policies and regulations. The bureau has taken up a slew of measures like Perform, Achieve, Trade (PAT) scheme for better use of energy in heavy industries, Standards and Labelling program (S&L) for certain energy based appliances like refrigerator, cooler, electric geyser etc., Energy Conservation and Sustainable Building Code (ECSBC) for commercial buildings with prescribed standards for energy efficiency in the construction of buildings. The act was amended in 2022 to include certain types of office and residential buildings in the building code, empower central government to issue regulations on energy intensive industries, create a national carbon trading market to encourage emission reduction in big industries. The PAT scheme aimed at promoting energy efficiency in energy intensive industries like thermal power, iron and steel by a system of reduction targets to the designated industries and tradable certificates to performers. These measures across thirteen sectors have saved 25.77 million ton of oil equivalent (MTOE) in the year 2022-23 . Similarly, the energy conservation and sustainable building code (ECSBC), first notified in 2007 and further enhanced in 2017, then in 2024, prescribed minimum energy efficiency standards for commercial buildings with connected load of 100 KW or contract demand of 120 KVA and above. It recommended energy efficiency requirements for the entire building construction process by covering building envelop, heating, lighting etc. The amendment of 2022 in the EC Act paved way for a national carbon market that incentivised emission reduction and penalised carbon emission in nine key industrial sectors. The report entitled, “Impact of Energy Efficiency for the year 2022-23”, suggests that these energy efficiency measures resulted in the overall energy savings of 50.81 MTOE or 6.62% of the total primary energy supply of the country in the year 2022-23. Among these measures, the Standards and Labelling ( S&L) program on household appliances and UJALA scheme, rolled out by the central government have made significant contributions. In the same year, S & L program led to electricity savings of 81.64 BU and GHG reduction to the tune of 58.01 million tonne. While, UJALA is reported to have led to electricity savings of 176.19 BU and GHG reduction of 125.09 million tonnes in 2022-23. The success of these two programs has a lesson within, that is, they are simplistic in approach and they touch the ground level consumers directly. Under the UJALA scheme, government distributed over 36 crore energy efficient LED bulbs across the country making energy saving a simplistic endeavour driven by the people. Similarly, the labelling of appliances greatly enhances the customer’s choice and awareness before buying an energy intensive product. On the other hand, measures like energy conservation and sustainable building code, designated state energy efficiency agencies, Carbon trading market require simplification and a better framework for proper implementation.

Role of Electric Mobility in Enhancing Energy Efficiency :

According to a report prepared by The Energy and Resources Institute, the transport sector accounts for 16% of total final energy consumption in the country as of 2021. However, internal combustion engine (ICE) based vehicles that dominate the sector; cause significant amount of emission and loss of energy. In this context, electric vehicles appear as a prominent alternative for energy efficiency in India.Studies show that EVs use up to 87-91% of electrical energy from the battery to drive the vehicle while gasoline vehicles convert 16-25% of energy in the same process resulting in significant energy waste. EVs regenerative braking also cuts down energy loss that otherwise occurs during conventional braking. In the Indian market, sales of e-vehicles are gradually rising over the years. Times of India reports that in the first six months of the fiscal 2025-26, EV sales had a share of 5% in the total passenger vehicles sales, growing from 2.6% at the end of FY 25. Another report by the website www.autocarpro.in  shows that in the year 2024, overall EV penetration in India was around 7.40% , a marginal rise from 6.38% in FY 2023. Measures like developing a strong EV ecosystem comprising of extensive charging infrastructure across India, domestic manufacturing of EV technology, reduction of cost etc., can rapidly push forward the EV adoption scenario in the country. Initiatives like FAME I and FAME II, providing subsidies for EV adoption, production linked incentive scheme for domestic manufacturers, recently launched PM E-DRIVE, allocation of electric buses to major cities have helped in this incremental growth, yet, more has to be done to attain a crucial breakthrough on energy efficiency in the vehicle sector.

Strengthening Energy Efficiency: The Way Forward : 

The India residential energy survey by Agrawal et al., 2020, reported a disparity in awareness about the appliance labelling program between rural and urban population. It stated that only 19.1% of rural households were aware of the BEE’s star labelling on appliances while awareness in urban areas stood at 37.8%. In the same survey, 40% of consumers stated appliance cost as the most important factor in purchasing energy based appliances. This brings into fore the two folded need of more awareness among the populace about energy efficiency along with the availability of cost effective appliances for a mass movement towards energy conservation in India. Inclusion of energy efficiency in curriculum, awareness campaigns on energy conservation targeting rural, marginalised sections, incentives for energy conservation practices at individual levels are of utmost necessity to inculcate a culture of energy efficiency in the society. At the same time, Industry oriented measures like ECSBC, e-transition, PAT and other regulations require a proper compliance, inspection and fast adoption mechanism nationwide. A sustainable roadmap of energy efficiency lies only in the perfect synergy between these two poles -- society and industry.

 (This article is based on official data from the Ministry of Statistics, Bureau of Energy Efficiency, and TERI reports.)