Perform Achieve and Trade (PAT) Scheme

28 Jun 2017 1:24 PM GMT

The energy efficiency initiative of the Government of India in energy intensive sectors has resulted in savings of about 8.67 Million Tonne of Oil Equivalent (MTOE), equivalent into avoiding of about 31 million tonne of CO2 emission. The Energy Conservation Act was enacted in 2001 with the goal of reducing the energy intensity of Indian economy. The Bureau of Energy Efficiency (BEE) was set up as a statutory body in 2002 at the Central level to facilitate the implementation of provisions of the Act. The Act provides a regulatory mandate for standards & labeling of equipment and appliances, energy conservation building codes for commercial buildings, and energy consumption norms for energy-intensive industries. For improvement of energy efficiency in industries and to achieve the national and international target of emissions reduction, the Perform, Achieve and Trade (PAT) Scheme was launched under the National Mission for Enhanced Energy Efficiency (NMEEE) in the year 2012.

The PAT scheme is a regulatory instrument to improve Specific Energy Consumption (SEC) in energy-intensive industries followed by incentivization in the form of Energy Saving Certificates (ESCerts) which can be traded at the Power Exchanges. PAT is a multi-cycle programme in which SEC reduction targets are assigned to industries called Designated Consumers (DCs) from energy-intensive sectors for a cycle period of three years. These DCs are then required to implement necessary energy efficiency measures to achieve the required reduction in their prevailing levels of SEC.

PAT Cycle-I (2012-13 to 2014-15) was envisaged to reduce the SEC of 478 DCs from eight energy-intensive sectors, viz Aluminium, Cement, Chlor-Alkali, Fertilizer, Iron & Steel, Paper & Pulp, Thermal Power Plants and Textiles. The overall energy saving target for PAT Cycle –I was 6.686 Million Tonne of Oil Equivalent (MTOE) — to be achieved by the end of 2014-15. The achievement in PAT Cycle-I is 8.67 MTOE, which is an over-achievement of about 30 per cent in comparison to the assigned targets. This amount of energy saving is equivalent to total energy consumption of countries such as Iceland, Costa Rica, Kenya and Zimbabwe. The energy saving incurred in cycle I has been converted to tradable emoluments in the form of ESCerts. The Ministry of Power has issued such ESCerts to the DCs of PAT Cycle-I in lieu of energy saving beyond the assigned targets and entitlement to purchase of ESCerts for compliance to meet the shortfall towards achieving the targets.

In the second cycle of the PAT scheme,which commenced from April 1, 2016, the scheme was expanded both vertically to include more DCs from the existing sectors and horizontally to include new sectors in addition to the present sectors. In the second cycle of PAT, 621 industrial units from 11 sectors (eight existing sectors and three new notified sectors viz Railways, Refineries and DISCOMs) were notified as DCs with an overall energy consumption reduction target of 8.869 MTOE. In the end of the PAT Cycle –II, a total energy saving of 17.54 MTOE is expected to be achieved which is approximately equivalent to the primary energy supply of a country like Morocco.

The PAT scheme is currently being implemented on a rolling cycle basis(ie annual inclusion of new DCs from existing or new sectors). In view of this, PAT cycle –III has been started from April 1, 2017. The PAT Scheme in its third cycle seeks to achieve an overall energy consumption reduction of 1.06 MTOE for which SEC reduction targets have been assigned to 116 Designated Consumers from six sectors, viz Thermal Power Plants, Cement, Aluminum, Pulp & Paper, Iron & Steel and Textiles.

At present, the total energy consumption share of DCs covered under PAT is about 70 per cent of the total industrial energy consumption including Thermal Power Plants. The PAT scheme is now being implemented on a rolling cycle basis, ie new DCs will be notified every year. In future cycles of the PAT scheme, it is envisaged that new sectors such as Commercial Buildings, Petrochemicals and other sectors as listed in the Schedule of the Energy Conservation Act, 2001, will be included.

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