MSME Sector Can Save Rs 37cr By Adopting RE & Energy Efficiency: CSTEP

MSME Sector Can Save Rs 37cr By Adopting RE & Energy Efficiency: CSTEP

A recent study by Bangalore-based energy think tank Center for Study of Science, Technology and Policy (CSTEP) said that the Micro Small and Medium Enterprises (MSME) can save upto Rs 37 crore by adopting renewable energy, energy efficiency and other advanced technologies.

The Center for Study of Science, Technology and Policy (CSTEP) has published a report titled ‘Scope for Deep Decarbonisation in the MSME Manufacturing Sector’. The 2-year scoping study evaluated the potential for decarbonisation in the MSME manufacturing sectors and for mitigating greenhouse gas (GHG) emissions. Seven clusters, covering an aggregate of 66 MSME units, from five energy- and emission-intensive sectors were included. A detailed techno-economic analysis was conducted to evaluate the feasibility of decarbonisation technologies (e.g. process electrification and fuel switching).

“The study found that the implementation of a combination of the recommended Energy Efficiency (EE) measures, Renewable Energy (RE) solutions, and Advanced Technologies could result in potential savings in emissions of 1,36,581 tCO₂, energy usage of 3,85,383 GJ, and energy costs of INR 37 crore. Of note, except Asansol–Chirkunda clusters, all clusters experienced decreased energy costs,” it said.

The report said that for the Aluminium die-casting cluster, the electric resistance furnace is an efficient and cost-effective option compared with piped natural gas (PNG)-fired furnaces, offering the benefit of reduced GHG emissions. Electric boilers are not financially viable for the pharmaceutical cluster owing to their higher capital costs and lower utilisation. Although the electric kiln offers a promising 29% reduction in emissions for the refractories sector, its financial feasibility is hindered by the substantial capital costs involved, it said.

As per CSTEP study although bio-compressed natural gas is at a nascent development stage, it is a viable alternative that can be used in PNG-fired furnaces in the aluminium die-casting cluster. Biodiesel blending with 80% diesel in diesel generator sets and diesel boilers can be another viable fuel option for the MSME sector. Despite the emission reduction potential of converting boilers to green
hydrogen, the high fuel cost and cost of adopting hydrogen boilers hinder its widespread adoption, it added.

“EE measures for electric drives and heating ventilation and air conditioning (HVAC) equipment in the pharmaceutical sector, boilers and thermic fluid heaters in the textile sector, furnaces and die-casting machines in the aluminium die-casting sector, kilns in the refractory sector, and ovens in the bakery sector offer the highest energy saving potential,” CSTEP said.

The report said that Delhi-NCR cluster showed a higher usage of natural gas-based melting and holding furnaces, whereas the Bengaluru cluster showed a higher usage of electricity-based furnaces. Thus, it is necessary to devise a specific decarbonisation roadmap tailored for each location, highlighting the diversity in results among locations of the same sector, it said.