The encyclopedia · Strategy & Leadership · Operational decision · 2014-2025
India's UJALA cut LED prices 88% with one bulk e-reverse auction
India's UJALA scheme aggregated LED demand and ran reverse auctions, dropping bulb prices 88% and spreading 400 crore LEDs.
Energy Efficiency Services Limited (EESL) · India's Ministry of Power
the move
In 2014 Indian LED bulbs sold for about Rs 310 each, out of reach for households that still paid for power-hungry incandescent or CFL lamps.
The state energy-services company EESL aggregated demand across states and ran a single e-reverse auction for millions of bulbs, forcing manufacturers to compete on price in real time.
Procurement prices fell about 88%, from roughly Rs 310 in February 2014 to Rs 38 in August 2016, and retail prices dropped to about Rs 65, making LEDs cheaper than the bulbs they replaced.
why it works
- One national buyer held genuine leverage instead of thousands of fragmented buyers.
- A live reverse auction revealed the true manufacturing cost instead of a fixed tender price.
- Selling LEDs at the auction price made the efficient bulb cheaper than the inefficient one.
- Energy savings from the bulbs repaid the program, so it did not need a permanent subsidy.
what transfers
When the buyer pools national demand into a single live auction, it can set a price that no household could get alone.
what came after
By October 2016 about 17.9 crore LED bulbs had been distributed, avoiding 4,656 MW of capacity and saving 23.25 billion kWh a year; by 2025 the scheme had helped sell over 407 crore bulbs and saved roughly Rs 19,153 crore annually.
references
- 17.90 Crore LED bulbs distributed across the Country: Piyush Goyal
- UJALA scheme completes 10 years, saves Rs 19,153 crore annually
spotted an error? The archive wants to know.