The National Electricity Policy recently notified by the government of India mentions, "Energy efficient lighting technologies should also be adopted in industries, commercial and domestic establishments." The widespread use of incandescent (also called GLS) lamps by households and commercial users is a major area of potential efficiency gain in lighting. For example, to get the same light output, one 60W GLS bulb can be replaced by a 15W Compact Fluorescent Lamps (CFLs) This reduces the power demand by nearly 45W or by three fourth of the original. Replacement of just one such GLS lamp that is operational at the peak time by every household in the country car reduces the peak power demand by over 5,000 MW. The potential saving is much larger when we consider that 55% of rural households are yet to be electrified. Under the rural electrification initiative, the government is planning to electrify the remaining households in the coming five years. This increases the potential saving, through use of CFLs, to nearly 10,000 MW! Hence, rapid and extensive penetration of CFLs can help us substantially mitigate the peak power shortage in the country.
Economics of CFLs for bulk management
The retail price of CFL has a wide range, but most lamps are priced between Rs.70 and Rs.150, depending on rating and manufacturer among other things. Despite this higher cost of CPL, compared to the GLS lamps; their economics is very attractive. Lower consumption of electricity and longer life of CFL make them more economical. A reasonable quality CFL can pay back the higher initial cost of CFL, in short period of 15% to 25% of its life; depending on the electricity tariff. For the remaining 75% to 85% of CFLs life, it results in net saving for the consumer.
In other words, when the electricity tariff is Rs.3/kWh, a CFL operating for just two hours a day, saves electricity to pay back the higher initial cost in a period of eight months. For lamps operating for longer duration the payback is proportionately faster.
Economics for Load management
Since the lighting load forms a part of peak load for the utility and that too mostly by domestic users, which generally received subsidized tariffs as compared to other categories, it makes sense to reduce the peak load by use of CFL especially in domestic sector. The economics work out to be very attractive as the reduction in demand provides utility with additional capacity to supply high paying customers. In some developed countries even free distribution of CFLs by the utilities has worked very economic. The utilities in India must exploit this opportunity offered by CFLs.
Purchase of CFLs on life cycle cost rather than first cost basis by the government agencies. Monitoring the performance of CFLs and sharing of experiences with other departments on regular basis. Reduction of cost of CFLs is one method to address this problem. Bulk purchase of one or two standardised lamps, rationalisation of taxes on the CFLs and cost reduction measures by the manufacturers can help substantially. There is a sizable scope for such cost reduction without affecting rather improving the quality of CPL. If the utility has a CFL leasing program, the first cost barrier faced by the consumers can be overcome. A 15-Watt CFL, which is equivalent to a 60 W bulb, would last about 6,000 hours (40 months) and may cost Rs.120. The utility can recover this cost through monthly bills at the rate of Rs.10 per month for 12 months. This is nearly a "no- cost" affair for the utility except for some modifications in the billing and accounting procedure.
Poor consumers with low usage are offered low electricity tariff as the lifeline tariff. In many states, the tariff paid by these consumes about Rs. 1.5/ kWh. In such a case, even the cost of CFL leasing is more than the electricity saving in the initial year. Hence, it does not make economic sense for these consumers to take CFLs eve through the leasing program. But in that case their consumption remains high and the utility continues giving subsidy on their electricity use In addition, the utility can share part of its potential saving (due to reduced subsidy to these consumers), with such consumers to reduce the monthly installment of CFL. The utility saving much more than what appears to the eye, in terms of difference between average cost of supply and the tariff by the poor households. The lighting usage is peak time usage, so the saving has to be calculated considering the reduction in peak T&D losses, reduced need for peak power purchase and so on. The required contribution by utility for this is small compared to the scale of its operations.