Ministry of Power is likely to launch a Rs 1000-crore scheme for encouraging energy efficiency in micro-, small- and medium-enterprises (MSMEs), a government official, as cited in an ET report, said. Government will provide financial support in the form of interest subvention. Small enterprises will get an interest subsidy of 5 per cent while medium ones will receive 3 per cent of subsidy on loans taken to implement energy-efficient technologies, according to the report.
The scheme called Assistance in Deploying Energy Efficient Technologies in Industries & Established (ADEETIE) will be managed by the Bureau of Energy Efficiency (BEE), established last year under Energy Conservation (Amendment) Act, 2022, which will ensure reduced energy costs and emissions.
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“Guidelines have been prepared and will be shared with the industry to ensure smooth implementation,” an official told ET while also mentioning that large companies have been excluded from the scheme.
Automation systems, combustion control systems for boilers, methane capture and air dyeing are some of the technologies likely to be supported by the scheme. ADEETIE online platform will be designed to facilitate funding for energy efficient projects.
A Long Due Support for MSME Sector
The proposal to provide financial support to MSMEs for energy efficiency has been due for some time now and may finally be taking shape. BEE, in Energy Efficient Summit 2023, said that it was planning to launch an interest subvention scheme with amount of Rs 12,000 crore, out of which Rs 6,000 crore was supposed to be specifically allocated to strengthen energy efficiency efforts of MSMEs as per The Hindu report.
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Interest subvention of 4-8 per cent for energy efficiency projects was suggested last year with state-run Power Finance Corporation being the nodal agency, as reported by Mint.
Meeting Net Zero Targets
The MSME sector contributes more than 40 per cent to industrial exports and approximately 30 per cent to the gross domestic product.
Amid the rising demand for power in the country, energy efficient technologies are of significant importance. The peak power demand this year touched 250 gigawatt (GW) in May. As economic activity increases and new industries come into existence, it is projected to reach 277 GW in FY27 and 366GW in FY32, according to the Central Electricity Authority.
MSME sector constitutes 25 per cent of industrial sector energy demand. It generates around 110mn tonnes of CO2 equivalent annually. The energy consumption of the sector is projected to increase by 50 per cent by 2030. It is thus important for the government to focus on energy efficiency in MSME sector to achieve net zero targets.
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