BEE to help SMEs use energy efficiently

The Bureau of Energy Efficiency (BEE), an agency of the Union Ministry of Power, has introduced a programme to help small and medium enterprises (SMEs) use energy efficiently and several policy measures to accelerate power generation. 

The programme, called the BEE-SME Programme, has identified about 35 SME clusters and will entail spending close to Rs 38.58 crore. After some ground-level situation analysis, 25 of them have been selected for further activities in consultation with the Ministry of Micro, Small and Medium Enterprises (MoMSME). 

According to the Indian Institute of Foreign Trade, SMEs contribute about 60 per cent of the country’s GDP. Although energy is an important input required for economic and social development, attaining higher energy efficiency is considered an important element in meeting India’s future energy challenges and ensuring its energy security. 

“SMEs lack the required energy capabilities to be able to figure out all that they can do to use energy responsibly. SMEs usually exist in clusters. Hence, we have decided to address clusters and not individual entities. SMEs must be energy-intensive for allowing interventions that are cost-effective,” Ajay Mathur, director general of the BEE, told Business Standard. 

He added, “We will finance the first four or five detailed project reports (DPRs) to be drawn up by high-quality consultants, helped by local talent chosen by the consultants. The Small Industries Development Bank of India (SIDBI) will be a project agent. The DPRs will go to SIDBI, it will finance the initiatives and industries will end up using less energy.” 

The project agent will be responsible for overall implementation while BEE will be responsible for overall project management. 

Clusters chosen for this project are Ahmedabad (chemical industries), Surat (textiles),Warangal (rice milling), Pali (textiles), Morvi (ceramics), Solapur (textiles), Jamnagar (brass), Bhubaneswar (utensils), Bhimavaram (ice plants), Vellore (rice milling), Ganjam (rice milling), Howrah (galvanizing/wire drawing), Kochi (seafood processing), Bangalore (machine tools), Jagadhri (brass and aluminium utensils), Vapi (chemicals), Jorhat (tea gardens), Varanasi (brick kilns), East Godavari and West Godavari (refractories), Batala, Jalandhar and Ludhiana (casting and forging), Alwar and Sawai Madhopur (oil mills), Gujarat (dairying), Jodhpur (limestone), Muzaffarnagar (paper), and Orissa (coal-based sponge iron). 

The SME sector is facing rising energy costs and on the other hand, prices and cost pressures are soaring. The government has from time to time offered various fiscal incentives and other interventions to SMEs, as well as help for technology upgradation and improvements in performance efficiency, but a programme for energy saving of this kind is novel and has tremendous potential. 

“Such business units, for whom energy cost is the highest component in production cost, will benefit a lot from such programmes. In the past too there have been such efforts, but various investment-related barriers and high turnaround time have been spoilers,” said Varda Bhole, an entrepreneur from Nashik.