India’s National Motor Replacement Program: Accelerating Energy Efficiency

India’s National Motor Replacement Program (NMRP) is an initiative aimed at promoting energy efficiency and reducing energy consumption in the industrial sector. The program, led by Energy Efficiency Services Limited (EESL), a joint venture company of four public sector enterprises of the Indian Ministry of Power, United for Efficiency and the International Copper Association (ICA) India—among other implementation partners, focuses on replacing inefficient motors with premium-efficiency IE3 motors.The industrial sector in India accounts for around 40 percent of the country’s electricity demand, with up to 69 percent of energy consumption attributed to motors and motor-driven systems. Over two million motors are produced in India each year, but historically, 90 to 95 percent of the motors sold and used in India are at IE1 (standard efficiency) standards or below. The annual energy saving potential through motor replacement is estimated to be more than 5 billion kWh, translating to a savings of $500 million and an avoided power generation capacity of 600 MW. ICA India has partnered with the EESL and the government of India to accelerate the adoption of energy-efficient motors in the country.

Addressing the Barriers to Energy-Efficient Motors

The NMRP works to address several systemic barriers that have challenged the adoption of energy-efficient motors. These range from issues of awareness among companies and consumers about the benefits and technological options available for energy-efficient motors to financial barriers due to high upfront costs of energy-efficient motors with limited market availability.

To overcome these barriers, the NMRP employs a combination of strategies:

  • Demand Aggregation: By pooling the demand for energy-efficient motors, the program helps lower costs and encourages manufacturers to produce higher volumes of high-efficiency motors.
  • Awareness Creation: The program conducts outreach activities to educate and inform stakeholders about the benefits of high-efficiency motors and energy conservation.
  • Finance: The program facilitates financing options for industries to help them cover the upfront costs of motor replacement and in making informed decisions.

Increasing Efficiency Decreases Emissions and Costs

The program aims to create an infrastructure to fuel the supply of energy-efficient motors through upfront investment, awareness creation, capacity building of manufacturers and developing successful case studies.

One of the key potential outcomes of the NMRP would be to save up to five billion kWhfive billion kWh annually, equivalent to an estimated $500 million in energy costs. This will not only help industries reduce their energy consumption but will also contribute to a greener economy. The program is expected to help increase generation capacity by around 600 MW, further reducing the need for new fossil fuel-based power plants, which generate significant greenhouse gas emissions. 

By promoting the use of high-efficiency motors, the program aims to reduce the overall carbon footprint of industries and contribute to India’s targets under the Paris Agreement. It is also what makes its financing model possible. The NMRP encourages the development and implementation of energy-conserving technologies by supporting manufacturers that offer high-efficiency motors. The program focuses on transforming the market by lowering the cost of IE3 motors through demand aggregation, effectively promoting the voluntary adoption of energy-conserving technologies in new, as well as old, installations. Through the NMRP, under the energy service company (ESCO) programs, no upfront investment from consumers is needed, and the EESL recoups investments through monetized energy savings through its innovative business model.

In doing so, the NMRP sets the stage for a sustainable future by paving the way for continued advancements and improvements in energy-efficient technologies.

Accelerating Implementation

The NMRP focuses on industrial and commercial sectors, particularly manufacturing and processing industries; commercial facilities, such as shopping malls, hospitals and office buildings; and water and wastewater treatment plants. For these sectors, increased efficiency allows them to reduce both emissions and costs while creating new operational efficiencies, such as being able to place large-volume single orders for energy-efficient motors through the program.

To accelerate the replacement of conventional, inefficient motors with energy-efficient IE3 motors, the NMRP has established an ESCO model on a “deemed savings methodology.” The deemed savings method reduces the cost of the monitoring and verification required for each installation.

ICA India was a key contributor to this program, which increased the affordability of higher-efficiency motors (IE3 category) through the extension of credit for early motor replacement up to the payback period duration. This program helped increase the share of IE3 motors from 11 percent in 2019 to 21 percent in 2021, The program is helping to scale the voluntary adoption of IE3 motors for new installations and replacements, ultimately bringing down the overall cost of these motors.

Compounding the Benefits

However, the benefits of the program stem far beyond the industrial sector. The transition to energy-efficient motors under the NMRP offers a substantial potential for job creation and economic impact. The increased demand for IE3 motors will lead to new opportunities for manufacturers, suppliers and workers in the sector. This program is expected to foster capacity-building and awareness creation, enabling the growth of a skilled labor force that can manufacture, install and maintain these advanced machines.

Industries that adopt these high efficiency motors can benefit from significant cost savings, as they will consume less energy. In its first phase, the program supported the replacement of approximately 5,000 inefficient motors, saving 9,150 MWh and $902,112 annually— further reducing carbon emissions by 8,050 tonnes a year. According to a report, through the NMRP, an alliance between the Institute for Sustainable Communities and Energy Efficiency Services, Ltd. has already saved $7.3 million worth of energy. The program is targeting an annual energy-saving potential of approximately $62 million (around ₹ five billion) as it continues to replace inefficient motors, benefiting both the environment and the economy.

At the same time, consumers will benefit from using a better-quality product at a lower price, while governments will help reduce peak demand loads on grid infrastructure and transform markets for energy-efficient products.The program’s success can also be used as a model for other countries looking to implement similar initiatives. U4E estimates through its country savings assessments that if energy-efficient motors were implemented in its 156 assessed countries, global energy savings could reach the equivalent of 193,500 MW power stations and 430 million tons of carbon emission and cost reduction of $35 billion to companies and consumers. By focusing on capacity building, awareness creation, and financial incentives, it is possible to accelerate the transition to energy-efficient technologies and contribute to a more sustainable future for all.

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