Tamil Nadu EE drive strengthened by government order
Bangalore, 10.08.2010 - ASE (India) / REEEP International Secretariat
A REEEP funded project being implemented by The Alliance to Save Energy is providing technical advisory services to the Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) and municipalities in Tamil Nadu to improve energy efficiency of the water supply and street lighting in 29 towns, using bundled energy performance contracts (EPCs) to finance efficiency improvements.
The project is designed to create confidence in the use of these contracts among municipalities and other public & private sector stakeholders by demonstrating successful project procurement and implementation using energy servicing companies (ESCOs).
On April 20, 2010, the Government of Tamil Nadu issued an official government order (GO), highlighting that “a new concept of energy saving through ESCOs would be proposed for implementation,” and giving the green light for 29 urban local bodies (ULBs) to sign the energy performance contract.
This GO is the first of its kind in India, empowering local governments to proceed with performance based contracts under an ESCO mechanism. Since government procurement policy in India does not traditionally support performance based contracting for energy efficiency projects, this GO is a milestone in supporting energy efficiency implementation through the use of this type mechanism.
Expected impacts of the GO include:
- increased confidence of municipalities and state governments in the potential to use ESCOs to implement energy efficiency projects;
- acceleration of the administrative approvals required for the implementation of such projects;
- enhanced confidence of ESCOs in participating in similar projects.
Another vital dimension of the project is replication. This Tamil Nadu project implementation model has already been replicated in Gujarat under the USAID-ECO III program, as a statewide municipal energy efficiency program for its 159 municipalities. The Bureau of Energy Efficiency (BEE), India’s federal agency for energy efficiency, has also considered a similar approach for its ongoing municipal demand-side management program.