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Centre eyes higher targets for energy efficiency mission

The National Democratic Alliance (NDA) government is set to up its game on climate change and get more ambitious with the national energy efficiency mission. The power ministry plans to expand the mission and bring greater energy savings from three more power-guzzling industrial sectors – railways, oil refineries and power distributors.

The ministry’s scheme – called Perform, Achieve and Trade or PAT – already covers the aluminium, cement, chlor-alkali, fertiliser, iron & steel, paper & pulp, thermal power and textiles sectors. Covering these three new power-intensive sectors from 2015 would help increase the volume of energy saved and the volume of greenhouse gas emissions prevented under the next phase of the scheme.

The power ministry, through its Bureau of Energy Efficiency (BEE), is also working to expand the coverage of PAT over more industrial units in the sectors it already covers.

At the moment, the programme covers 478 industrial units across the country – the largest capacity units in each sector. “The share of the national energy consumption that is targeted for energy-efficiency enhancement through PAT would be increased by the addition of new sectors, and also inclusion of more units in the existing sectors,” said Power Secretary P K Sinha.

Together, the existing six sectors covered under the PAT scheme consume about 36 per cent of the fossil fuel consumed in India. The inclusion of three new sectors is expected to increase the cover of the scheme to 40 per cent of the annual fossil fuel consumption of the country.

The scheme was originally launched in 2012. It set standards for the identified industrial units in each sector to meet by the end of 2014-15. These standards were set to reduce the specific energy consumption of the plants or the energy consumed for every tonne of their product.

The scheme also had a market-mechanism built in. Industrial units that saved more than their targets were to be given certificates which they could trade with other units that had been unable to meet their PAT goals.

A penalty of Rs 10lakh and the cost of shortfall was set as the stick to goad the plants to meet their targets. Overall, all the plants in the six sectors were to achieve a 4.05 per cent reduction in the average energy consumption by 2014-15. This was estimated to equal about savings of 6.69 million tonnes-of-oil-equivalent annually and preventing about 23 million tonnes of carbon dioxide from being emitted annually.

The unaudited reports coming in from the plants suggest that the scheme has led to savings of 4.12 million tonnes-of-oil-equivalent in 2013-14, Director General of BEE Ajay Mathur told Business Standard. “It seems likely that there would be an overall compliance with the target, with some amount of trading for compliance purposes (by the end of March 2015),” he added.

BEE figures, yet unverified, that out of those already under the scheme 217 plants have already met their 2014-15 targets and about 60 more plants are on the path to doing so. The second phase of the PAT scheme will now increase the ambit over existing sectors it covers as well as expand to cover three others where the government sees large margin of improvement as a low-hanging fruit.

The energy efficiency mission forms a part of the country’s national action plan on climate change. Energy efficiency itself is seen as a relatively cheaper route to cut greenhouse gas emissions. The government is now working to announce a more ambitious target to reduce the growth of its emissions under the 2015 global climate change deal. The enhanced coverage of the energy efficiency mission is expected to feed in to the new target and also likely to find reflection in the government’s announcement.

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