Report suggests cluster approach to decarbonise MSMEs, experts point out the need for MSME policy for energy efficiency

The study has identified Bengaluru Machine Tools cluster, Belagavi Foundry cluster, Shivamogga Foundry cluster, Malur Brick cluster and Gokak Jaggery cluster as the five main MSME clusters in the State.

Published - August 28, 2023 09:03 pm IST - Bengaluru

With around 49% of total energy consumption, the industrial sector is the highest consumer of energy in Karnataka, according to the draft ‘Karnataka State Energy Efficiency Action Plan’, released by the Bureau of Energy Efficiency (BEE) and Karnataka Renewable Energy Development Limited (KREDL). The plan suggests a cluster wise approach for Micro, Small and Medium Enterprises (MSME) for energy conservation which might result in potential energy savings of 0.02 Millions of Tonnes of Oil Equivalent (MTOE) to 0.05 MTOE in moderate and ambitious scenarios respectively by 2031. 

The study has identified Bengaluru Machine Tools cluster, Belagavi Foundry cluster, Shivamogga Foundry cluster, Malur Brick cluster and Gokak Jaggery cluster as the five main MSME clusters in the State.

It has suggested several measures like, replacement of conventional furnaces with energy-efficient IGBT-based induction furnaces in foundry clusters and the reduction of radiation losses by energy-efficient coating on kilns in the brick/ceramic sectors. The report has also listed several low-investment, medium-investment, and high-investment energy efficiency projects for MSMEs in both sectors. 

However, experts think that for successful implementation of energy efficiency projects in MSMEs across the State, it is necessary to consider even those enterprises which are outside the clusters. “There are around 5.6 lakh MSMEs in the State and those present inside Karnataka State Small Industries Development Corporation (KSSIDC) is a very small number. It would be incorrect appreciation of the fact to say that they are all in KSSIDC industrial estates. However, the implementation of such projects on a full scale would only be possible if they are all brought under a common area,” said M.G. Prabhakar, former member of the advisory committee, Karnataka Electricity Regulatory Commission (KERC).  

He also pointed out that a State specific MSME policy is necessary to make MSMEs more energy efficient. One of the action plans mentioned in the report also suggests the need for a sector-specific policy development for financial assistance on bench marking the MSMEs within the clusters. 

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