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Startup Insights

Scaling deployment of industrial energy efficiency

Notes by Narsi

There is a consensus amongst all stakeholders that energy efficiency, especially industrial energy efficiency, is a low hanging decarbonization avenue.

Today, both the hardware and software tools are available to provide effective energy efficiency implementations for a range of industrial sectors.

Even the paybacks for energy efficiency projects are quite attractive, with many projects claiming to have paybacks within a year.

To sweeten the deal even further, many energy efficiency startups even offer pay as you save models where they eliminate the initial capital costs involved for energy efficiency projects and the corporate can pay the startup a portion of the savings they make from energy efficiency.

With so  many things going for it, almost every industry should be agog with energy efficiency implementations at a hectic pace.

But that is not the scenario, 

I doubt if even 5% of the total potential for industrial energy efficiency has been exploited so far.

What could be the reasons behind the slow adoption of industrial energy efficiency?

Based on my experience, the following could be the top three challenges:

1. Focussed awareness and education - while almost every industry stakeholder knows that energy efficiency is possible, the knowledge they have today is at a generic level. What is lacking is industry specific education and awareness creation - I'm aware BEE has done excellent work for certain industry clusters such as textiles, but I'm not sure how well they have taken this message to every industry stakeholder and how powerfully hey have articulated the custom benefits for select industries

2. Quick pilots - Many industry energy efficiency solutions are not plug and play, they need customizations, and hence the need for pilots. But pilot projects in industrial settings can be a bother for the engineers and operations managers who have allot signifiant time and efforts into something that is outside their KPIs.

3. Top management commitment - Unless the top management commits itself to energy efficiency projects, they will not fly, because there will most times be resistance from the operations and engineering teams as well as from the finance teams if the implementations need significant capital deployment. The only way to get over these challenges is for the top management to send a clear message to all that the corporate needs to get this done and now.

Startups and investors making efforts in industrial energy efficiency need to reflect on the above barriers and drives and devise suitable strategies.

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