IAS Gyan

Daily News Analysis


20th June, 2023 Polity

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Context: Energy Efficiency Services Limited (EESL) has signed a memorandum of understanding (MoU) with the Government of Andhra Pradesh to support the state in strengthening its MSME sector through energy efficiency interventions. The MoU will facilitate the implementation of various schemes and programmes of EESL for MSMEs in Andhra Pradesh, such as LED lighting, smart meters, solar rooftop systems, electric vehicles and charging stations.


  • The Energy Efficiency Services Limited (EESL) to support Andhra Pradesh in enhancing energy efficiency in Micro, Small and Medium Enterprises (MSMEs) that will help in ensuring economic stability and fostering a sustainable future. EESL is exploring the possibility to impart global technologies in MSMEs of Andhra Pradesh besides other states.

What is EESL and what does it do?

  • EESL is a joint venture of four public sector undertakings (PSUs) under the Ministry of Power, Government of India.
  • It was established in 2009 to implement the National Mission for Enhanced Energy Efficiency (NMEEE), one of the eight missions under the National Action Plan on Climate Change (NAPCC).
  • EESL's main objective is to create and sustain markets for energy efficiency services and products in India and abroad. It does so by providing end-to-end solutions for energy efficiency projects, such as demand aggregation, project design, financing, procurement, installation, monitoring and verification.
  • EESL has successfully implemented several flagship programmes in India, such as;
    • The Unnat Jyoti by Affordable LEDs for All (UJALA) scheme distributed over 370 million LED bulbs across the country.
    • The Street Lighting National Programme (SLNP), replaced over 10 million conventional street lights with LED lights.
    • The Smart Meter National Programme (SMNP), aims to install 250 million smart meters in India by 2022.
  • EESL also operates in international markets such as the UK, Middle East, South Asia and South-East Asia. It has recently signed a Memorandum of Understanding (MoU) with the International Solar Alliance (ISA) to collaborate on solar projects in ISA member countries.

How is EESL supporting MSMEs in Andhra Pradesh?

  • MSMEs are vital for the economic growth and social development of India. They contribute about 29% to the GDP, 45% to the manufacturing output and 48% to the exports. They also employ over 110 million people.
    • However, MSMEs face many challenges in terms of access to finance, technology, markets and skilled manpower. They also have low awareness and adoption of energy efficiency practices and technologies.
  • According to a study by the Bureau of Energy Efficiency (BEE), MSMEs consume about 32% of the total energy used by the industrial sector in India but have the potential to save up to 25% of their energy consumption through energy efficiency interventions.
  • EESL is keen on supporting MSMEs in Andhra Pradesh in enhancing their energy efficiency and competitiveness. It is exploring the possibility to impart global technologies in MSMEs of Andhra Pradesh besides other states.

Some of these technologies include;

  • Variable Frequency Drives (VFDs): These are devices that control the speed and torque of electric motors based on load requirements. They can reduce the energy consumption of motors by up to 40%.
  • Waste Heat Recovery Systems (WHRS): These are systems that capture and utilize the waste heat generated from industrial processes such as furnaces, boilers, kilns etc. They can improve the thermal efficiency and reduce the fuel consumption of these processes by up to 30%.
  • Solar Rooftop Systems: These are systems that generate electricity from solar panels installed on rooftops or other suitable locations. They can reduce the dependence on grid power and lower the electricity bills for MSMEs.
  • Energy Management Systems (EMS): These are systems that monitor and optimize the energy performance of various equipment and processes in an industrial unit. They can provide real-time data and insights on energy consumption patterns and identify areas for improvement.

EESL is also planning to offer various financing options for MSMEs to adopt these technologies, such as the pay-as-you-save model, leasing model, shared savings model etc. These models will enable MSMEs to avail the benefits of energy efficiency without any upfront investment or risk.

Energy efficiency in MSMEs can have multiple benefits, such as:

  • Cost savings: Energy efficiency can reduce energy bills and operational costs for MSMEs, thereby improving their profitability and cash flow.
  • Productivity improvement: Energy efficiency can enhance the quality and quantity of output for MSMEs, thereby increasing their productivity and market share.
  • Environmental protection: Energy efficiency can reduce greenhouse gas emissions and pollution from MSMEs, thereby contributing to the mitigation of climate change and the improvement of public health.
  • Social welfare: Energy efficiency can create new jobs and livelihood opportunities for the local communities, especially for the youth and women.

Energy efficiency in MSMEs also faces some challenges, such as:

  • Lack of awareness: Many MSMEs are not aware of the benefits and potential of energy efficiency, or the availability of technologies and services in the market.
  • Lack of technical expertise: Many MSMEs do not have the technical knowledge or skills to implement energy efficiency measures or to operate and maintain the equipment properly.
  • Lack of access to finance: Many MSMEs do not have the financial resources or creditworthiness to invest in energy efficiency projects or to avail of the financing schemes offered by EESL or other agencies.
  • Lack of policy support: Many MSMEs do not have the regulatory or institutional support to comply with the energy efficiency norms or to avail of the incentives and subsidies offered by the government or other agencies.

How can these challenges be overcome?

Awareness generation

  • EESL is conducting various awareness campaigns and workshops to educate and sensitize MSMEs about the benefits and potential of energy efficiency, and to showcase the success stories and best practices from other states or countries.

Capacity building

  • EESL is providing various training and skill development programmes to MSMEs and their employees to enhance their technical expertise and managerial skills for implementing energy efficiency measures.

Technology demonstration

  • EESL is setting up demonstration projects in selected MSME clusters to showcase the performance and impact of various energy efficiency technologies and services.

Market development

  • EESL is facilitating the supply chain and distribution network for various energy efficiency products and services, and creating a platform for interaction and collaboration among MSMEs, technology providers, service providers, financiers and other stakeholders.

Policy Advocacy

  • EESL is engaging with the State government and other authorities to advocate for conducive policies and regulations that support and incentivize energy efficiency in MSMEs.


  • Energy efficiency is a win-win proposition for MSMEs, as it can help them save costs, improve productivity, protect the environment and create social welfare. EESL is committed to supporting MSMEs in Andhra Pradesh in achieving their energy efficiency goals and enhancing their competitiveness. We invite all interested MSMEs to join us in this journey towards a greener and brighter future.

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Bureau of Energy Efficiency: https://www.iasgyan.in/daily-current-affairs/bureau-of-energy-efficiency