Energy Conservation Act and PAT Scheme

K. K. Chakarvarti, Energy Economist,

Expert Consultant

Bureau of Energy Efficiency

New Delhi

Workshop on Best Practices on Energy Efficiency in Fertilizer Sector

16th February,2016, Indo Gulf Fertiliser, Jagdishpur

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INTRODUCTION

Conventional source of energy such as coal, oil and gas are scarce and exhaustible.

Consumption of fossil fuel resources also leads to Global warming and climate change

Hence, all initiatives needs to be undertaken to

ensure the efficient use of energy resources and

minimizing the impact of energy use on

environment.

This has led the Government of India through the

Energy Conservation Act and the Bureau of

Energy Efficiency to launch several energy

efficiency improvement initiatives.

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DESIGNATED CONSUMERS ( Energy Intensive Industries and other Establishments)

Schedule to EC Act provides list of 15 energy intensive

industries and other establishments to be notified as designated consumers (DC). A DC to

Appoint or designate certified energy manager Submit Annual Energy consumption return Get energy audit conducted by an accredited energy auditor Implement techno-economic viable recommendations Comply with energy consumption norms and standards

All the above mandatory provisions of Energy Conservation Act are aimed at sustaining energy efficiency improvement initiatives in energy intensive industry

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Aluminium;

Fertilizers;

Iron and Steel;

Cement;

Pulp and paper;

Chlor Akali;

Sugar;

Textile;

Chemicals;

Railways;

Port Trust;

Transport Sector (industries and

services);

Petrochemicals, Gas Crackers,

Naphtha Crackers and Petroleum

Refineries;

Thermal Power Stations, hydro

power stations, electricity

transmission companies and

distribution companies;

Commercial buildings or

establishments;

Schedule to EC Act

List of Energy Intensive Industries and other establishments

National Mission for

Enhanced Energy Efficiency (NMEEE)

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Mission was approved by Indian Cabinet

on 24th June, 2010 with an 11th Plan outlay

of Rs.2350 Million (US $ 39 Million).

Indian Cabinet has approved continuation

of the Mission for 12th Plan on 6th Aug., 2014

with an outlay of Rs.7750 Million (US $ 129

Million).

National Mission for Enhanced Energy Efficiency (NMEEE)

• Perform Achieve and Trade (PAT) :

– Market based mechanism for energy intensive large industries

and facilities

– Enhance cost effectiveness of improvements in energy efficiency

– Certification of energy savings which could be traded

• Market Transformation for Energy Efficiency (MTEE):

– Shift to energy efficient appliances in designated sectors

– Innovative measures to make products affordable

• Energy Efficiency Financing Platform (EEFP):

– Finance Demand Side Management Programme

– Capture future savings

• Framework for Energy Efficient Economic Development

(FEEED):

– Developing fiscal instruments to promote energy efficiency

NMEEE – Four Initiatives

Perform Achieve and Trade

scheme

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PAT Overview and Elements

478 plants in 8 energy intensive industry in PAT Cycle-1 (

Aluminium, Cement, Chlor-alkali, Fertilizer, Iron & Steel,

Paper & Pulp, Textile and Thermal Power Stations), and gate

to gate boundary concept adopted.

Energy consumption of these plants was about 1/3rd of the

total energy consumed in India in the baseline year (2009-

10).

Large variations in energy intensities of different units in

almost every sector

Key Goal :Mandate Specific Energy Consumption

improvement

Energy Intensity reduction target for each unit based on its

current efficiency in base line (2009-10)

Multi- cycle process –First PAT cycle till 2014-15

Design based on extensive consultations over 2010-12

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Designated Consumers Covered under PAT Scheme

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National Target of Energy Saving among all Sectors

S.NO. Sector No. of

Identified DCs

Annual Energy

Consumption (Million

toe)

Share Consumpti

on (%)

Apportioned Energy

Reduction For PAT Cycle-1

(Million toe)

1 Power (Thermal) 144 104.56 63.38% 3.211

2 Iron & Steel 67 25.32 15.35% 1.486

3 Cement 85 15.01 9.10% 0.815

4 Aluminium 10 7.71 4.67% 0.456

5 Fertilizer 29 8.20 4.97% 0.478

6 Paper & Pulp 31 2.09 1.27% 0.119

7 Textile 90 1.20 0.73% 0.066

8 Chlor- Alkali 22 0.88 0.53% 0.054

Total 478 164.97 100.00% 6.686

Total EE Projects planned in 2012-15: 2057

Total anticipated investment : US$ 3095 million

The direct benefit for the participating industries in this period is reductions

in input costs related to energy of approximately US$ 1250 million.

Sectoral Share in Energy Saving Target (%)

(2012-15)

Reduction in India's CO2

emissions by 24 million tons /

year in 2014-15.

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• For Designated Consumers

– Improvement in Energy Intensity will bring down the specific

input energy cost and ultimately triggers higher profit in

company’s balance sheet

– The DCs can trade over achieved Energy efficiency in the

trading platform to the under achiever

– Capacity building of Man power

• For Technology Suppliers

– Business opportunities in terms of lower payback period of

energy efficient technologies unless otherwise lost due to higher

investment on high R&D cost

• For Service Company’s

– Opportunities in terms of Energy Auditing, capacity buildings,

Implementation of projects as ESCO model

All win situation

• Regulatory instrument linked with market mechanism – Certification of energy saving

• Consultative approach – Ministries/DCs/Associations/FIs/Research Organizations

• Outreach/ Capacity Development – Workshops/Seminars/ Visits

• “Self – competing”

– Unit specific targets

• Relative responsibility – Less target for more efficient and more for less efficient

• Supports improvement in energy management system – measurement, recording and reporting

PAT- Salient features

PAT- Way forward (PAT Cycle II)

• Deepening of PAT (existing sectors): Inclusion of more units from existing sectors

– About 150 -200 new DCs from four sectors (I&S, P&P, Cement and Textiles)

– Over 100 - 110 new DCs from four sectors (TPP, Chlor-Alkali, Fertilizer and Aluminum)

• Widening of PAT: Inclusion of more units from new sectors

– New sectors: Refinery, Railways and Electricity DISCOMS

– About 175 new DCs

PAT CYCLES Np. of Units

Share of Total Energy Consumption in Industry

Sectors Covered

Cycle I (2012-13 to 2014-15)

478 DCs

36%

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Cycle II 900-950 DCs

50%

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MEA Reports Review

• Review and analysis of Form- 2 and MEA reports

Baseline Fixation

• Un-normalised Baseline SEC fixation through M&V

Pro-forma

Review of National Commitments

• Review of Sector Specific National Policies on Energy

Savings and International commitment

(INDC/Regulatory/Govt. Policies etc.)

Baseline Fixation and Target Setting

Old DCs in Existing Sectors

►Workshops

• Workshops for filling up Data in the Pro-forma and Target Fixation methodology

►Data Collection

• Pro-forma Filling by DCs

►Verification Audit and Review

Baseline Fixation and Target Setting New DCs in Existing Sector

►Workshop

• Inception Workshop for DCs (Railways, Refinery and DISCOMs)

►Sector Specific Pro-forma

• Development of Sector Specific Form I and Pro-forma for new

sectors(The pro-forma integrated with Normalisation factors)

►Data Collection and Verification Audit

►Workshop

• Workshop on Form I, Pro-forma, Baseline fixation & Target Setting

►Normalisation

• Development and preparation of Normalisation document for New

Sectors

Baseline Fixation and Target Setting

New DCs in New Sectors

Analysis of INDCs and other Sectoral Targets

Baseline setting for PAT Cycle II

Target Setting for PAT Cycle II

Notification of Targets for PAT Cycle II

Impact Study of PAT Cycle I

Development of Standard Operating Procedures (SOPs)

Vision Document for Subsequent PAT Cycles

PAT- Way forward

Voluntary Initiatives to Sustain Energy Efficiency

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ISO 50001 Energy Management System

More than 300 industrial units have declared their energy policy .

PAT mechanism has all factors which are part of EnMS

Relatively easier for Indian industry and buildings to adopt EnMs standard and achieve and sustain higher levels of energy efficiency

Around 270 establishments including buildings and industry in India have been certified for ISO 50001 EnMS

The Delhi International Airport Limited (DIAL) became the first airport operator and Dahanu Thermal Power Station, Maharashtra (India) became the first Thermal Power Station in the world to receive this certification after its publication in mid 2011.

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Conclusions

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Sustainability through Energy Conservation Act

The strategies and sustainability initiatives adopted

during the 11th Five Year Plan (2007-12) have showed

encouraging outcomes.

12th Plan (2012-17) will carry forward the existing

schemes as well as further strengthen the EE initiatives

to accelerate the process of implementation of energy

efficiency measures to sustain and achieve the desired

energy savings.

Projected Savings in Billion kWh (BU):

44.85 BU (consumer end)

60.17 BU (at generating side)

Additional thermal energy saving equivalent to 21.30

million ton of oil equivalent energy is expected to be

achieved by 2016-17

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First Prize (US$

2000) winning

painting in

“National

Painting

Competition for

School

Students on

Energy

Conservation” :