The Union Budget of 2014 laid out a much-needed emphasis on infrastructure spending and the NDA government's commitment to speed up the pace of urbanization. The budget calls for a $1.1 billion investment on creation of 100 Smart Cities and significant other investments towards ports, metros and airports.
What is also very heartening to note is that there's a strong focus on renewable energy like solar with the government's announcement to create ultra-mega solar projects. This is a welcome move that looks to balance the imminent infrastructure needs of the nation with those of its energy requirements. If the country has to successfully build its infrastructure, the only way it can do so is by embracing sustainability and energy efficiency at the core of every single project it pursues.
The inter-dependence between infrastructure projects and energy efficiency may not appear obvious but peel the onion slightly and you would notice how intricately one impacts the other. But before we examine their inter-dependence, especially in a country like India, let's face some significant facts. Globally, buildings (residential, commercial or industrial) account for about 40 per cent of the total energy consumption. Transportation of all kind adds another 28 per cent to the global energy consumption. In a developing nation like India, where the thrust on urbanization is perhaps second only to China, the share of energy consumed by buildings and transportation may well be over two-thirds of the entire energy production of the country.
Given the energy challenges faced by the nation, it is only imminent that the government relentlessly pursues energy efficiency in every single infrastructure project that it looks to carry out. This could be systematically done through four key measures:
1) Invest in energy-efficient designs and adopt latest innovation;
2) customize technology to the Indian requirement,
3) introduce energy-efficiency codes and regulation, and
4) cultivate talent and build capability in this domain.
World over, there has been a rapid pace of innovation when it comes to technologies and systems that go into making a building more energy-efficient and environmentally friendly. From air-conditioning systems that consume significantly lesser power and emit far lesser greenhouse gases, to elevators which can run on renewable energy sources, to fire safety systems that dramatically decrease the water consumption while delivering greater performance, to ultra-efficient lighting systems, the timing is just right for India to embrace some of these cutting-edge innovations that are available, today.
Not only do many of these technologies reduce the energy footprint of a building or infrastructure project by as much as 50 per cent but they also pay back for themselves in a matter of a few years. We have seen the payback ranging from anywhere between one and three years depending on the application and technology in question. Hence today, green technologies are not only a "good practice" to adopt in order to protect the environment, but energy efficiency in buildings also makes business sense for the customer. While two-thirds of India's building foot print until 2030 still needs to be built, the fact is we already have a large building footprint on the ground. In fact, many of these technologies can also be retro-fitted into existing buildings and projects.
Companies like UTC Building and Industrial Systems are already helping existing building owners around the country with energy audits and recommending quick payback solutions to save energy. Interestingly, I have observed that the topic around energy footprint of existing buildings has now risen to the level of the CEO with a clear intent for action. As the new government embarks on its ambitious plan of building 100 smart cities, it will involve upgrading existing cities, expanding and building around them and also in some cases, completely new cities/ buildings, all of which will benefit from cutting-edge building design and technology.
As demand for newer and more energy-efficient product increases, the government and industry needs to look at ways to encourage localization not just of manufacturing processes but also in engineering. India is a unique nation with its own requirements which warrants a customized solution. Hence, it is very critical to build the local engineering capability to deliver this. Products here have to be able to sustain far adverse voltage fluctuations which warrant a modification or additional protection.
Simply importing or manufacturing a global design will not suffice or meet the requirement. While companies need to invest in building the local engineering/ supply chain and bring the best technology to India, the government can do a lot as well with shaping the right duty structure to promote localization and also provide incentives for design and manufacturing of energy efficient equipment. With right intent and definite policy decisions, I don't see a reason why India cannot become a manufacturing hub for sustainable technology products for the entire SAARC and even ASEAN regions.
With the government's decision to create 100 smart cities resonating extremely well with the industry, it is timely that the policy makers also take progressive and definitive steps in bringing out codes and regulations for promoting energy efficiency in buildings. Learning from other countries like China and the US, but also closer to home like Thailand, the use of energy-efficient technology only ramped up when appropriate building codes and regulations were introduced.
India has come a long way on its own to occupy a place of pride in the global green building movement with a green building footprint next only to the US and China. On the regulatory front, the Bureau of Energy Efficiency (BEE) has done some very good work with appliance star rating systems (eg. for air-conditioners, refrigerators). The BEE has also developed the Energy Conservation Building Code (ECBC), which is being adopted by several government buildings. A lot more needs to be done to improve the code and make it mandatory for all building construction. For this to happen, the state governments need to modify their building by-laws to incorporate the ECBC norms. We have seen a few state governments like Gujarat, Tamil Nadu, Maharashtra, Karnataka, Rajasthan and Andhra Pradesh take the lead here. However, we are still a long way from other countries like China where it started adopting the building codes way back in 1980s and today is aggressively enforcing these energy-saving building codes.
Finally, with the pace of urbanization and infrastructure growth that the current government is looking to achieve, implementing a sustainable approach will demand skill sets that we haven't invested in so far. The country needs talent who understands energy efficiency and technology as a discipline. We need architects and consultants who understand the latest technology available and implement the principles of green design. We need construction companies which understand what it takes to install and commission such technologies. We need building professionals like facilities managers who know what it takes to run a building in the most energy-efficient manner. For this to happen, firstly we need to bring in more talent into the building industry and, secondly, train them on the latest technologies and methods available. Both the government and industry have a critical role to play here. This can be a great opportunity for a private organisation that has the capability and scale to train in large numbers. There could also be a very interesting opportunity to use some of the resources from the National Skills Development Mission and have this as a thrust area to build skills in the future. The fact is that the building construction industry is one of the largest employers today and we have to invest today to start building these new skill sets that our country must have if we have to build a sustainable and greener India tomorrow.
Zubin Irani is the President - Building & Industrial Systems, United Technologies Corporation (India Region) and the Chairman - CII (Northern Region)