Every additional unit of electricity does not necessarily have to come from a new power plant. Increasingly, it can come from using existing power more efficiently. As India’s electricity demand continues to rise, demand-side management and energy efficiency are becoming central to the country’s energy strategy, helping reduce peak demand while improving grid reliability. Telangana, particularly Hyderabad, is reflecting this shift through a mix of national programmes and state-led initiatives. 

Policy Framework

India’s energy efficiency programme is anchored by the Energy Conservation Act, 2001, and implemented by the Bureau of Energy Efficiency (BEE). The Bureau has stated that it has launched various demand-side management programmes to bridge the gap between electricity demand and supply, describing this as one of the principal interventions available to manage growing consumption without proportionate increases in generation capacity. The flagship industrial mechanism under this framework is the Perform, Achieve and Trade scheme, which sets specific energy consumption reduction targets for designated consumers in energy-intensive sectors and allows excess savings to be converted into tradable energy saving certificates.

Over the past decade, the PAT mechanism has completed several implementation cycles. PAT Cycle I, covering 478 designated consumers across eight sectors including iron and steel, cement, aluminium, fertiliser and thermal power, resulted in energy savings of 8.67 million tonnes of oil equivalent, about 30 percent above its assigned target, avoiding close to 31 million tonnes of carbon dioxide emissions and generating estimated monetary savings of Rs 37,685 crore. PAT Cycle II, which widened coverage to 621 designated consumers across 11 sectors by adding refineries, railways and power distribution companies, delivered savings of roughly 13 to 14 million tonnes of oil equivalent, avoiding around 61 to 68 million tonnes of carbon dioxide and yielding monetary savings estimated at Rs 31,445 crore. Subsequent cycles have continued on a rolling annual basis, with PAT Cycle VII notified in October 2021 for the 2022-23 to 2024-25 period, covering 509 designated consumers with an overall energy saving target of 6.627 million tonnes of oil equivalent. Trading of energy saving certificates, regulated by the Central Electricity Regulatory Commission, has however remained thin, with certificates from early cycles largely trading at floor price due to a persistent oversupply relative to buyer demand.

Appliance Standards and Household Efficiency

On the consumer side, the Standards and Labelling Programme run by the Bureau of Energy Efficiency since 2006 now covers 34 categories of equipment and appliances, of which 11, including air conditioners, refrigerators and geysers, carry mandatory star ratings. A five-star air conditioner can use up to 30 percent less energy than a one-star model of comparable capacity, a difference that becomes significant given that cooling is among the fastest-growing sources of electricity demand in Indian cities. 

The government has notified progressively stricter efficiency norms for air conditioners beginning January 2026, with further tightening planned by 2028-29 that is expected to improve efficiency by around 23 percent over current baseline models. Revised star rating tables for frost-free and direct-cool refrigerators and ceiling fans take effect from January 2026 and remain valid through December 2028. In July 2025, the Bureau launched the country’s first labelling programme for evaporative coolers, an appliance that consumes up to 75 percent less electricity than conventional air conditioners and is particularly suited to hot, dry regions; this labelling is expected to save an estimated 12.91 billion units of electricity and avoid 9 million tonnes of carbon dioxide emissions between 2025 and 2033.

Lighting efficiency has delivered some of the most measurable gains under India’s demand-side management effort. The UJALA scheme, launched in January 2015 and implemented by Energy Efficiency Services Limited with distribution companies, had distributed more than 36.87 crore LED bulbs across the country as of January 2025, resulting in estimated annual electricity bill savings of Rs 19,153 crore and an annual reduction of about 47,883 million units of energy consumption. The associated Street Lighting National Programme had installed over 1.34 crore LED streetlights by January 2025, cutting peak demand by more than 1,500 megawatts and reducing annual carbon dioxide emissions by an estimated 6.2 million tonnes.

Telangana and Hyderabad: State-Level Implementation

Telangana and Hyderabad: Managing Demand in a Fast-Growing Economy

Demand-side management has acquired greater significance in Telangana as the State witnesses sustained growth in electricity consumption, driven by rapid urbanisation, industrial expansion, commercial development, and increasing adoption of air conditioning. Hyderabad, home to one of India’s largest IT and business ecosystems, has seen a steady rise in electricity demand from office parks, residential townships, hospitals, educational institutions, metro rail operations, and a growing network of data centres. At the same time, the expansion of electric vehicle charging infrastructure is adding a new category of electricity demand that requires careful planning and smarter load management.

Against this backdrop, Telangana has increasingly focused on improving energy efficiency alongside expanding generation capacity. Demand-side management is being implemented through the Telangana Renewable Energy Development Corporation (TGREDCO) and the State’s two distribution utilities, TGSPDCL and TGNPDCL, which were constituted following the 2024 restructuring of the distribution sector. TGSPDCL has introduced a Demand Response Programme, under which participating consumers receive event-based signals linked to electricity prices, system reliability, or supply conditions, enabling them to voluntarily reduce or shift electricity consumption during peak demand periods. Participation requires a minimum one-year contractual commitment covering at least 10 per cent of the consumer’s estimated peak demand.

One of Telangana’s flagship demonstrations is the TGREDCO-TGSPDCL Net Zero Energy Office Building at Mint Compound in Hyderabad. Designed as India’s first grid-interactive government office compliant with the Super Energy Conservation Building Code (Super ECBC), the project integrates a 179 kWp rooftop solar system, advanced building management systems, and two-way interaction with the electricity grid to optimize energy use while supporting grid stability.

The State has also accelerated rooftop solar deployment across government buildings through net-metering programmes and continues to expand public EV charging infrastructure across Hyderabad and other urban centres. These initiatives complement the Telangana Clean & Green Energy Policy 2025, which places energy efficiency, renewable energy integration, energy storage, and smart energy management at the centre of the State’s long-term energy strategy.

Industrial and MSME-Focused Efficiency

Beyond large designated consumers under PAT, the Bureau of Energy Efficiency has introduced a scheme for micro, small and medium enterprises to be implemented over three years from FY2025-26 to FY2027-28, offering interest subvention and hand-holding support to help smaller industrial units adopt energy-efficient equipment and processes, a segment that has historically had lower participation in formal efficiency programmes compared to large industry.

Between Ambition and Delivery 

India’s demand-side management programme now operates across multiple fronts—from industrial efficiency and appliance standards to LED lighting, smart buildings and demand response programmes. Together, these initiatives are reducing electricity consumption while improving the efficiency of the power system. For Telangana, the combination of TGSPDCL’s demand response programme, TGREDCO’s net-zero building demonstration, and the anticipated 2026 tightening of air conditioner efficiency norms will be particularly relevant to Hyderabad, where rising cooling demand and household appliance ownership are likely to be significant drivers of future peak load. The Bureau of Energy Efficiency often describes energy efficiency as India’s “first fuel”, emphasising that every unit of electricity saved reduces the need for additional generation capacity. As electricity demand continues to rise, this approach is expected to play an increasingly important role in both national and state energy planning.

Also Read: Storage & Batteries: The Missing Link in India’s Renewable Energy Push

India Energy Summit & Expo 2026 | 18-19 Aug 2026

As Telangana and the rest of India work through these next stages of demand-side management, from tighter appliance norms to smarter grid interaction, the conversations shaping this transition will take centre stage at the India Energy Summit & Expo 2026, in its sixth edition, being held in Hyderabad. Bringing together policymakers, utility leaders, investors and technology providers, the summit will spotlight demand-side management and energy efficiency as one of its key discussion tracks, alongside renewable energy, grid modernisation and EV infrastructure. For anyone tracking how India’s “first fuel” strategy is playing out on the ground, it’s a platform worth being part of. Register here to secure your place at the summit. 

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