PAT Advisory and ESCerts TradingEnergy service offering for DCs under Perform, Achieve and Trade Mechanism

About PAT

• PAT – Perform Achieve and Trade – a Regulation of Government of India

• Seeks to regulate energy usage in your organization – mandates by statute

improvement in energy efficiency

• Immediately impacts 8 sectors of the Indian Economy

• Notified on 30th March,2012

PAT – what is at stake?

• The units under PAT have been identified as a Designated Consumer as per Energy

Conservation Act 2001

• As per PAT rules such units will have to reduce their SEC (specific energy consumption)

by 2014-2015.

• Govt. of India has already notified a SEC target for the unit.

• The organization has to plan energy reduction measures, finance the implementation of

measures to reach the target.

• Shortfalls will attract penalty. Surplus can lead to financial upside.

Elements in PAT

There are 5 important elements in PAT which we need to understand……….

Principle

and

Motivation

Liabilities/Penal

ties/UpsidesBaseline/Targets

Audits and

checks

Documentation

and Reporting reqmts

PAT Approach for DCs

• Needs understanding of financial exposure and opportunity

• Strategy, Plan and capital provisioning

CxOs - Financial and Strategy

Officers

• Collecting and Providing energy data points

• Providing energy insights into processes

• Preparing CapEx plan

Internal Energy/ Environment

Officers

• Own Apportioned Departmental SEC improvement plans

• Deployment of SEC improvement measures

Operational in charges

Strategic advisorysupport

for integrated pursuit of climate/energy

opportunities

Managing engagement

with verifier, scheme administrator

Compliance supportfiling, preparation of

forms, design document etc.

Market support

Sourcing climate & PAT finance, Trading

ESCerts

Internal Organizational Functions External Assistance and Support

Our PAT Advisory and ESCerts trading service provide the external assistance and

support to help a DC achieve optimal PAT performance

Steps Required• Goal setting: To be undertaken by DC based on PAT targets

• Reduction phase: cycle wide leading to the target year

• Trading phase: at the end of financial year (s)

• Linked benefits assessment for collateral advantage

– Is there any significant collateral energy/environment commodity generation which

can be obtained from the measures which are to be deployed?

– Can the collateral energy/environment commodities be leveraged for raising the

required capital for the interventions?

PAT – requires optimal performance planning

To comply - is the overarching goal

Business Considerations – May make DC settle for shortfall or aim for excess. Minimizing

the impact of shortfall and maximizing the impact of excess is desirable.

For optimal performance – weighing various options from financial, technical andregulatory perspective is essential

Comply

Manage Shortfall

Pay Penalty

EScertProcurement

Exceed TargetTransact (trade)

and realize Value

Advantage RSM GC• RSM GC’s knowledge of PAT rules, climate and energy finance, energy and

environment commodity domain, how energy & environment commodity markets

have evolved – will aid you in optimal performance planning under PAT.

• Valuable insights gained by RSM GC through servicing PAT DCs – can assist other

DCs in jumpstarting and guiding their PAT process

• ESCert is an energy commodity and RSM GC specializes in climate, energy and

environmental commodities

• RSM GC is a leading player in CDM, REC and understands well the interplay of PAT

with these mechanisms. By identifying REC, CER opportunity General Carbon can

help you increase the returns out of the capital that you deploy for PAT.

Experience in RSM GC for PAT

• Advising clients on PAT since inception – presently advising DCs in 4 industry sectors

• Identified and developed more than 50 energy/energy efficiency projects under UN

mechanism.

• More than 80 Men Years experience in:

Energy Monitoring – Electrical, Thermal Energy Audit Identification of Clean and EE technology

• Executed more than 60 major projects (Energy/EE)

• Contributed to EE improvement from 12GCal/ton to less than 6.5GCal/ton of crude steel

• Contributed to achievement of over 300Million GCal saving

Domain Competence (Process, Technology etc.)

RSM GC is well placed to quickly grasp DC’s domain specifics – as it has competent

personnel who have extensively engaged in the following:

• Worked with technology aspects of : Power Generators, Iron & Steel, Other Metal

Industries, Paper & Pulp, Cement, Fertilizers, Infrastructure, Distillery, Municipal

projects, Textiles etc.

• Analyzed technically and financially issues related to clean technology, energy

saving/energy efficiency, sustainable development initiatives of clients

• Have experts, trained and certified energy auditor, engineers – who understand

electrical and thermal energy aspects

Experience . Expertise .Value

Clients of Energy and Sustainability Service Offerings

Some more clients…..

12

PAT Current Client Engagements

Thermal Power plants

Iron and Steel

Textile

Paper

Service items include

• Review of baseline assessment

• Measurement and Verification plan

• Review of energy systems

• Review of energy saving measures

• Preparing Energy Road Map

• Risk assessment and mitigation plan

• Proposed normalization strategy

• Sub unit level analysis of energy performance

• Audit and Audit Review

• Management Insight to assist CxO

• Market insight and ESCert trading

Cycle of Action under PAT and RSM GC’s Services

Service Insight Advisory Services - highlights

• Assessment of target and recommended action plan – for gap

analysis

• Assessment of expected SEC through planned interventions

• Preparation of scheme document

• Preparation of 1st year and 2nd year PAD (form A) for issuance

• Preparation of end of cycle PAD (form A)

• Assistance during verification

– End of cycle verification/all 3 verification

• Assistance in obtaining issuance of ESCert

• Strategic Assistance

Advisory Services

Transaction Services

Service Insight Transaction Services - highlights

• Assistance in trading ESCerts through

– Trading platform

– Bilateral trade

• Assistance in mid cycle sale of ESCert as allowed

under PAT rules

• Assistance in availing finance through funds that are

likely to come up to support PAT type initiatives

• Help develop the right strategy for leveraging ESCert,

REC etc. fungibility when that is introduced.

Advisory Services

• ESCert tradingTransaction

Services

Case Study – RSM GC’s Success Stories

Case Study 1 –Sector : Power

•RSM GC studied the DC’s processes and

unearthed verification risks which could

have extinguished the potential ESCerts.

•The practice of monitoring important PAT

parameters was not adequate for PAT

requirements. RSM GC advised the DC on

the impending risks. Corrections have

been initiated by the DC.

•Issues related to PAT procedural

requirements were identified by General

Carbon which otherwise would have

resulted in non-compliance.

Case Sector 2 -Sector: Iron and Steel

•RSM GC’s assessment has resulted in re-

estimation of the baseline. Corrections

have been initiated.

•Risks and opportunities have been re-

calibrated.

•The DC, based on RSM GC’s input, has

initiated communication with BEE.

Contact us

Mr. Anupam Das Purkayastha

Director

Phone :+91 22 2266 3201/3301

Mobile :+91 9029002980

Email : anupam.das@general-carbon.com

Mr. R.P.Sharma

Director

Phone :+91 22 2266 3201/3301

Mobile :+91 98180 49505

Email : rajendra.sharma@general-carbon.com

Thank you