The first cycle of the Perform Achieve and Trade (PAT) scheme has exceeded it’s goals and resulted in a saving of ₹ 9,500 crore to participating industries.

Speaking at an event to report the savings accrued under the first cycle, Minister for Power and Renewable Energy, R K Singh said that PAT-1 has overshot it’s targeted energy savings by 30 per cent.

He said, “The reported overall achievement for PAT - 1 is 8.67 million tonne of oil equivalent. This exceeds the 6.867 million tonne of oil equivalent (mtoe) target for cycle 1 by 30 per cent.”

“We will be achieving a total saving of 19 mtoe in the next two PAT cycles,” Singh added.

According to the outcome and way forward report, the pulp and paper industry has reported the highest over-achievement at 143 per cent with a saving of 0.29 mtoe. The iron and steel industry has reported a saving of 2.10 mtoe which is a 41 per cent achievement above the target.

The only laggard in the eight sectors chosen for the scheme is the thermal power plant sector. Despite having the highest energy saving at 3.06 mtoe, the sector has missed the targets set for it by 5 per cent.

PAT is a component of the National Mission for Enhanced Energy Efficiency (NMEEE) which is one of the eight missions under the National Action Plan on Climate Change (NAPCC). The PAT cycle - 1 was set in operation in April 2012 and completed in 2015.

According to the outcome and way forward report, PAT is a regulatory instrument to reduce specific energy consumption (SEC) in energy intensive industries, with an associated market-based mechanism to enhance cost effectiveness through certification of excess energy savings, which could be traded. Energy Saving Certificates (ESCerts) are issued to industries which reduce their energy consumption beyond their target.

Those companies which fail to achieve their target are required to purchase ESCerts for compliance, or are liable to be penalised. The trade of ESCerts is conducted on existing power exchanges.

Simply put, companies are issued these energy saving certificates that they can trade with those companies who fail to earn them. This way a company that has saved energy has an additional monetary incentive.