Govt finalises procurement of 50 mn LED bulbs in biggest tender

You may now buy an LED bulb at Rs 77, one-fourth of what it used to cost in January 2014

Energy-efficient LED (light-emitting diode) bulbs will now be available at a price lower than CFLs (compact fluorescent lamps) after the government closed the world’s single-largest tender to procure 50 million LED bulbs. With this tender, the price of an LED bulb has come down to one-fourth, or Rs 77 on an average, since January last year when the first tender was finalised.

LED bulbs worth Rs 385 crore will be supplied by companies such as Philips, Osram, Bajaj Electricals and Crompton Greaves, said an industry executive. The tender was finalised on Wednesday by Energy Efficiency Services (EESL), a joint venture company of the public sector undertakings of the power ministry.

The bulbs will be sold to households in various states through power distribution companies. EESL is the nodal agency for the procurement and distribution and it has so far procured 25 million bulbs.

Andhra Pradesh, Rajasthan, Uttar Pradesh and Delhi power distribution firms will be the first to sell LED at lower rates. A government official said Maharashtra, Madhya Pradesh and Himachal Pradesh will also start schemes to distribute LED bulbs soon.

CFL bulbs sell for Rs 100 apiece in the market and the price of an LED is in the range of Rs 250-300. States are likely to sell two to three bulbs per household. Experts said prices can come down further when a larger tender to procure about 60 million bulbs will be floated in the fourth quarter of the calendar year.

The decline in price of an primary input, LED chips, which is imported along with rising production volumes have helped the industry to bid aggressively in the tenders, a company official said.

LED uses half the electricity used by CFL, and just a tenth of what an incandescent bulb consumes. “We are looking at savings of nearly 100 billion units of power through the use of LED lights, translating into $7 billion annually,” power minister Piyush Goyal said at a public event in March. Indian electrical companies are said to have converted CFL manufacturing lines to LED in the wake of the huge demand from EESL tenders.