Perform, Achieve and Trade (PAT) Scheme: Market Based Mechanism to Improve Industrial Energy Efficiency

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1 Perform, Achieve and Trade (PAT) Scheme: Market Based Mechanism to Improve Industrial Efficiency Promoting Cooperation in the Sector 9th January 2017 New Delhi Ashok Kumar PhD Economist Bureau of Efficiency

2 Enabling Framework Conservation Act Designated Consumers to comply with the specific energy consumption norms National Action Plan on Climate Change (NAPCC) Nation Mission for Enhanced Efficiency (NMEEE) Perform Achieve and Trade (PAT) Market Transformation for Efficiency (MTEE) Efficiency Financing Platform (EEFP) Framework for Efficient Economic Development (FEEED) Nationally Determined Contributions (NDCs) Emission intensity reduction by 33 to 35% against 2005 level by 2030

3 Perform, Achieve and Trade (PAT) National Action Plan on Climate Change (NAPCC) Nation Mission for Enhanced Efficiency (NMEEE) Perform Achieve and Trade (PAT) Market Transformation for Efficiency (MTEE) Efficiency Financing Platform (EEFP) Framework for Efficient Economic Development (FEEED)

4 Perform, Achieve and Trade (PAT) Perform Achieve and Trade (PAT): A regulatory instrument to reduce specific energy consumption in energy intensive industries, with an associated market based mechanism to enhance the cost effectiveness through certification of excess energy saving which can be traded.

5 PAT Journey Conservation Act enacted National Action Plan on Climate Change released Sector studies to identify DCs Sector studies Commenced to identify DCs Baseline data collection begins Financial outlay approved Consultations on Target setting methodology and targets Target Year PAT Cycle I PAT Cycle II Notified National Mission for Enhanced Efficiency (NMEEE) Nation wide Consultation Workshops Organised NMEEE approved by Prime Minister's Council on Climate Change Conservation Act amended to make provisions for issue of energy saving certificates, imposition of penalty for non compliance and trading of ESCerts Perform, Achieve and Trade (PAT) scheme came into effect; first compliance ( ) Performance Verification

6 Typical PAT Cycle Minimum Consumption Notification. Say toe for cement Data Collection & 3 rd party verification for Baseline With Industries, Associations, Ministries, Research Bodies etc. 70 TCM to discuss Targets, Saving potential & international practices 3 Year cycle for each PAT Cycle Verification by Accredited Auditors & Trading 11 Sectors notified so far Data collected from 1000 plus industries 250 Plus consultation meeting/work shops/visits PAT1: units PAT2: units PAT1: PAT2: PAT3: industries verified for PAT1 PAT3: (Proposed) DC Notification Data Collection & Verification Consultation Ministerial Technical Committee & Notification Implement - ation Achievement Verification & ESCert Trading 6

7 Complied Complied Complied PAT Mechanism ESCert Issued I II ESCert Purchased Trading Not Required Non Compliance Penalty Imposed III IV SEC (Specific Consumption): Consumed per unit production 7

8 Realized Impacts PAT 1 ( ) Saving 8.67 mtoe 5635 MW 1.25% of India s total primary energy supply Emission Reduction 31 million tonnes of CO2 1.93% of India s emissions Skill Development Capacity building: Engineers and operators Auditors & Managers 219 Accreditation Savings Rs 37,685 Crores from saved energy consumption and avoided generation Investment Encouraged investments for energy efficient technologies for domestic manufacturing Rs 24,517 Crore invested 8

9 Accelerated Technology Adoption Cement Fertilizer Pulp & Paper Thermal Power Plant Iron & Steel 9

10 Projected Impacts PAT 2 ( ) Saving 17.5 mtoe MW 2.09% of India s total primary energy supply Emission Reduction 60 million tonnes of CO2 3-4% of India s emissions Skill Development Capacity building: Engineers and operators Auditors & Managers 500 Accreditation Savings Rs Crores from saved energy consumption and avoided generation Investment Encouraged investments for energy efficient technologies for domestic manufacturing Rs 30,000 Crore (Projected) 10

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