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Reports of New Mechanisms Feasibility Studies: FY2011

Title of Feasibility Study (FS)New Mechanism Feasibility Study for Energy Savings by Utilising LED Lights at Office Buildings in India
FYFY 2011
Main Implementing EntityJapan Research Institute, Ltd.
FS PartnersPanasonic Corp., ANCHOR Electricals Pvt. Ltd, Evalueserve Pvt. Ltd, Sumitomo Mitsui Banking Corp.
Location of Project ActivityIndia
Category of Project ActivityEnergy Efficiency
Summary of FS ReportPDF (454KB)
Description of Project/ ActivityThe project consists of installing LED lighting in India while utilizing “Bilateral Offset Credit Mechanism”(BOCM), measuring reduction effects through demonstration testing of the LED lighting, and verifying eligibility as “BOCM” for achieving reduced power consumption and greenhouse gases.
Reference Scenario and Project/ Activity BoundaryGiven the fact that LED lights have barely penetrated the Indian lighting market (0.1% on a volume basis), the reference scenario is a business-as-usual (BAU) scenario. However, LED penetration is expected to increase going forward, primarily driven by lower prices, so when LED market share comes to exceed 50% on a volume basis, the validity of this project will expire (new registration will not be conducted). Highly reliable data for ascertaining lighting penetration on a region-by-region basis does not exist in India, so the boundary of this project/activity is the whole of India.
Monitoring Methods and PlanThe method for measuring power consumption will either be 1) by directly measuring power consumption, or 2) deriving power consumption by calculating the product of lighting output (wattage) and operating time. Accordingly, if the first method is used, it will be necessary to monitor power consumption. If the second method is used, it will be necessary to monitor lighting output before and after the project is implemented. Also, for operating time, the project will adopt either 1) deemed lighting hours, which will be predetermined based on how each commercial building is used (e.g., office, hospital, hotel, etc.), or 2) conduct automated measurement using light sensors, heat sensors, etc. If the second method is used, it will be necessary to monitor lighting hours on a daily basis.
GHG Emissions and ReductionsAmount reduced during one year at the demonstration test site is 2.71 tCO2. Potential annual reduction in the host country in 2015 is approximately 86 thousand tCO2.
MRV System for GHG ReductionsMRV method (draft) created based on AMS-II.J, an existing CDM methodology. The following provides a summary.

● Application Conditions (excerpted)
    ▪ Replacing non-LED lighting with LED lighting at a commercial building in India
    ▪ Brightness of replacement LED lighting equivalent to (or more than) the total lumens of the lighting that was replaced
    ▪ LED lighting to be used consists of LED lights of more than a certain efficiency based on LED energy efficiency standards scheduled to be released by India's Bureau of Energy Efficiency.
● Reduction Amount
    ▪ Derived by calculating (India's carbon emissions coefficient * (power consumption before project - power consumption after project implemented)) while taking into account the impact of annual transmission loss
    ▪ Power consumption derived by multiplying lighting output by operating time
    ▪ Operating time taken from 1) deemed lighting hours, or 2) automated measurement by sensors
● Credit period
    The start of the credit period is the date the LED lighting is installed. The end of the credit period is the date LED lighting installed for the project reaches 50% or more of its operating life.
Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity)Some harmful substances are used in the LED production process, but given that LED production is generally handled by major electronics manufacturers based in developed countries, it is difficult to conclude that this will cause a negative impact on the environment. As for the positive impact, in developed countries, the progression of lighting has been from light bulbs to fluorescent lights to LED, but in the emerging country of India, it is possible that soil contamination, etc. by mercury, lead, etc. used in fluorescent lights can be avoided by accelerating widespread use of LED lights.
Financial PlanningThe agent that will conduct sales, installation, service and maintenance for the LED lighting will play an extremely important role in this scheme, so it will be particularly important to contract a reliable agent with a track record that is capable of performing these duties. If financing is in a hard currency other than rupees, such as US dollars, there will be differences between rental income in rupees and this currency, so as reflected in the above-mentioned barrier to entry for foreign banks in India, swap contracts that hedge risk associated with currency and interest rate fluctuations will be essential.
Introduction of Japanese TechnologyIf LED lighting manufactured by Panasonic Corporation, a partner in this project, penetrates offices throughout India, greenhouse gas reductions of 256 thousand tons-CO2 annually are projected. To facilitate the popularization of LED lighting, conducting the same service for the purpose of reducing initial costs has the potential to provide momentum for installation and widespread adoption.
"Co-benefits"
(i.e. Improvement of Local Environmental Problems)
Reduction of SOx/NOx from power generation associated with reduced power consumption caused by utilization of LED lighting has been estimated quantitatively. The result is SO2 emissions reduction (2015) of 713 tons and NOx emissions reduction (2015) of 771 tons.
Contribution to Sustainable Development in Host CountryAs of 2010, India has an overall power shortage of 92,848 GWh. By 2021, the power shortage will grow to 1,914,508 GWh.

India's current level of primary energy consumption per unit of GDP is approximately five times that of Japan. India has already eclipsed Japan as the world's fourth largest emitter of greenhouse gases. The country's energy consumption efficiency has the potential to impede growth going forward. Improving energy consumption efficiency through this project will help limit large increases in greenhouse gas emissions while helping facilitate economic growth, meaning it will contribute to India's sustainable development.

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