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Tuesday 30 September 2008

CFLs to soon sell for Rs 15 only

Vishakapatnam will be the first city in the country to get compact flourescent lamps (CFLs) at Rs 15 each — arguably the cheapest in the world. This is only the beginning, in three-and-a-half years, the central government plans to replace the 400 million incandescent bulbs around the country with similarly priced CFLs under the Bachat Lamp Yojna.

Yamunanagar will be the next city where the scheme will be operationalised.

For a change, the super subsidy to the consumer is not being borne by the government. It will be recovered by the CFL manufacturer through the global carbon market run under the UN Framework Convention on Climate Change, known as the Clean Development Mechanism. This is the first time in the world that such a scheme is being run under the mechanism.

The power minister, reacting to the approval of the scheme by the UN’s CDM board, said, “This approval has opened up the path for the launch of Bachat Lamp Yojana across the country. This will reduce the electricity bills of households by about Rs 150 a year for each bulb, which they replace by a CFL. In addition, it will also reduce power demand by over 2,500 MW in this plan period itself.”

Each CFL bulb consumes roughly one-fourth the power of an incandescent one. Therefore, for each hour that a consumer uses a CFL light instead of an ordinary bulb, the carbon dioxide emissions go down. A single bulb may not save much but add up all the bulbs lighting up homes in India and the country ends up avoiding 24 million tonnes of climate changing carbon dioxide emissions, the Bureau of Energy Efficiency, the nodal agency for the Yojna, estimates.

CFL producing companies will tie up with utility agencies in different states and cities, just as they did in the case of Vishakapatnam to sell CFLs at a low rate.

The BEE will then, through a remote system at its own cost, monitor the actual savings in power made in the region where the bulbs have been sold over a year.

That will help calculate the tonnes of GHG emissions avoided. For each tonne of gas avoided, the CDM mechanism provides for one “carbon certificate”. The CFL manufacturer would be able to sell these carbon certificates in the international carbon market to recover the rest of its cost.

The European markets have a ready demand for these certificates as they have set targets to reduce their own “carbon emissions” under the UNFCCC. But they are allowed to offset their emissions by buying certificates from developing country enterprises as these come cheaper than doing the emission cuts in their own backyard.

The certificates are traded in an open market and currently sell at 8-12 euros. Power ministry sources said the CFL company would be able to recover the entire retail price in 3-4 years — the average life of a CFL bulb.

“Tamil Nadu, Haryana, Punjab and Kerala are moving ahead and some states are taking the competitive bidding route to choose the companies that will provide the CFL,” said a ministry source. He mentioned that venture capitalists too had shown interest in the unique market and could provide the funds to manufacturers who have been still weighing the risk of entering the market in a huge scale.

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