PERFORM, ACHIEVE AND TRADE

A.K.ASTHANA

Sr. Technical Expert, GIZ

India

World CO2 Emission Savings

30

35

40

45

Gt

42.6 Gt

35.4 Gt

Current Policies

Scenario

New Policies

Scenario

13.7 Gt

7.1 Gt Efficiency 50%

Renewables 18%

Biofuels 4%

Nuclear 9%

Share of cumulative abatement

between 2010-2035

20

25

30

2008 2015 2020 2025 2030 2035

21.7 Gt450 Scenario

13.7 Gt CCS 20%

New Policies Scenario is the central scenario in WEO-2010

> assumes cautious implementation of recently announced commitments & plans, even if yet to be

formally adopted

The 450 Scenario sets out an energy pathway consistent with the goal of limiting increase in average

temperature to 2OC

Source: WEO 2010

India – CO2 Emission Reduction

Share of cumulative abatement

between 2010-2035

Efficiency 51%

Renewables 32%

Biofuels 1%

Nuclear 8%

CCS 8%

Energy Profile - India

170

175

180

185

190

3.2

3.25

3.3

Energy Intensity - Industrial SectorGHG Emissions Across Sectors

140

145

150

155

160

165

3

3.05

3.1

3.15

2004-05 2005-06 2006-07 2007-08 2008-09

Energy Intensity of industry sector (mtoe per Billion Rs. GDP)

Commercial energy consumption in Industry (in mtoe)

THE INDIAN ENERGY CONSERVATION ACT

�EC Act enacted in October 2001

�Became effective from 1st March 2002

� Bureau of Energy Efficiency (BEE) operationalized from 1st March 2002 and StateDesignated Agencies established in 32 States/Union Territories

�Energy efficiency institutional practices and initiatives in India are now mainly being�Energy efficiency institutional practices and initiatives in India are now mainly beingguided through various voluntary and mandatory provisions of the Energy ConservationAct

MISSION OF BEEMISSION OF BEEDevelop Develop policy and strategies with a thrust on self policy and strategies with a thrust on self regulation and market principles, within the overall regulation and market principles, within the overall

framework of the EC Act with the primary objective of framework of the EC Act with the primary objective of reducing energy intensity of the Indian economy.reducing energy intensity of the Indian economy.

National Mission for Enhanced Energy Efficiency (NMEEE)

� The National Action Plan on Climate

Change was released by Prime

Minister of India in June 2008

� The Action Plan Outlines 8 Missions

including National Mission forincluding National Mission for

Enhanced Energy Efficiency

(NMEEE)

� The basic objective of the NMEEE

mission is to ensure a sustainable

growth by an approximate mix of 4

E’s, namely-

Energy, Efficiency, Equity and

Environment

Stimulate Funding

for ESCOsEnergy Intensive Industries

Targets for Mandatory Energy Saving

PAT EEFP

NMEEE – Four New Initiatives

Fiscal Instrument for EE

Partial Risk Guarantee FundVenture Capital FundPublic Procurement

Energy Efficient AppliancesSuper Energy Efficient Program

FEEEDMTEE

NMEEE

Perform, Achieve & Trade (PAT) Mechanism

�The key goal of the PAT scheme is to mandate specific energy efficiency

improvements for the most energy intensive industries.

�The scheme builds on the large variation in energy intensities of different

units in almost every sector, ranging from amongst the best in the world, to

extremely inefficient units as wellextremely inefficient units as well

�The energy intensity reduction target mandated for each unit is dependent

on its current efficiency : the reduction target is less for those who are more

efficient, and is higher for the currently less-efficient units.

�The design of PAT is the result of extensive consultations over the last two

years (2010-11 and 2011-12), which have contributed to its robustness and

simplicity.

National Energy Saving Targets under PAT (%)

(2012-15)

Sr

No

Sector No. of

Identified

DCs PAT

Cycle-1

Reported

Energy

Consumption

PAT Cycle-1

(million toe)

Energy

Saving

Targets under

PAT Cycle-1

(million toe)

1 Aluminium 10 7.71 0.456

2 Chlor-Alkali 22 0.88 0.054

3

PAT Overview and Status

3 Textile 90 1.2 0.066

4 Pulp & Paper 31 2.09 0.119

5 Iron & Steel 67 25.32 1.486

6 Fertilizer 29 8.2 0.478

7 Cement 85 15.01 0.816

8 Thermal

Power Plants

144 104.56 3.211

Total 478 164.97 6.686

Baseline Period: 2007-08, 2008-09, 2009-10Assessment year: 2014-15M&V period: April-2015 to Jun-2015

Specific Energy Consumption

• As the SEC is calculated on a Gate-to-Gate concept, the definition of plant

boundary plays an important role.

PROCESS

Electricity (KWH)

FO (Ltr)

NG (SCM)

Product (Kg)

All forms of Energy Plant Boundary

10

PROCESSNG (SCM)

Coal (KG)

Others (KG or Ltr)

E P

SEC = E / P

Baseline SEC

Target SEC

Reduction in SEC

Year 1 Year 2 Year 3

SE

C

Challenges PAT Cycle I

�Scale of Production (Installed

Capacities)

�Use of Raw Material

�Process Technology

�Vintage

�Variation in output/product

�Plant boundary

�Variation in fuel quality

�Plant load factor�Vintage

�O & M Practices

�Type of Product Output

�Plant load factor

�Monitoring & Verification

PAT Scheme : Background & Scope

• Covers 477 designated consumers in 8 sectors

• All DCs consume about 165 mtoe energy

• Targets would be given to all DCs to achieve the same within a time

frame frame

• Achievement > Target E-Scerts

• Achievement < Target Purchase E-Scerts / Penalty

• National Target = 6.68 mtoe at the end of 1st PAT Cycle (by 2014-15)

Perform, Achieve & Trade (PAT) Mechanism

• The market based mechanism to enhance the cost effectiveness in improving the Energy Efficiency in Energy Intensive industries through certification of energy saving which can be traded

Administrator Designated Consumers Auditing Agencies Market Place

Reward over achiever

Penalize under

performer

Sta

kehold

ers

Market Based Mechanism

Administrator

• Set target and compliance period

Designated Consumers

• 8 sectors Thermal Power Plant, Steel, Cement, Fertilizer, Pulp & Paper, Textile, Aluminium, Chlor-alkali

Auditing Agencies

• Independent

• Monitor, verify and certify

Market Place

• Transaction of energy efficiency instrument

Sta

kehold

ers

Set Targets

•Setting targets on the basis of current specific energy consumption

•Set compliance period

•May take into account Location, Vintage, Technology, raw materials, product mix etc.

Monitoring & verification of targets by Designated Energy Auditors

(DENA)

•Check if designated consumer has achieved targets

•Underachievement: Obligations to buy ESCerts or pay penalty

•Overachievement: Issuance of ESCerts for banking for later use or trade

Trading of ESCerts

•Participation by Designated consumers on platform provided by Power Exchanges

•Symmetrical flow of information

Pro

cesses Involv

ed

Target

Baseline SEC

Achieved SEC

Compliance

Issued Escerts Penalty

Concept of Target, Compliance, Escerts & Penalty

Target SEC

Scenario 1 Scenario 2

Compliance

Purchase Escerts

ESCerts Trading

Trading of ESCerts

Future Challenges

Rectification of Notified Gate-to Gate Specific Energy consumption Norms and Standards

Development of new sector specific data Collection Form for Energy Return with inbuilt SEC Calculation sheet

Monitoring and Verification

Trading Platform: Finalization of the overall structure for issuance of Escerts on voluntary basis (The necessary process on behalf of DCs will start from 1st April, 2013)

Uploading of new Form-1 on PATNET and to ensure its proper operationalization

Audit, Baseline Formulation and Target setting for

Railways

PAT Deepening and Widening

Identification of DCs in new Sectors and Definition for

taking the PAT to another step

Market place for Energy efficiency Instruments

PAT Cycle II: Fixing of Baseline data for Existing DCs for PAT Cycle II

THANK YOU