The Power Minister, Mr Sushilkumar Shinde, will inaugurate the ‘Perform, Achieve, Trade’ (PAT) scheme in New Delhi tomorrow.
The much-awaited, path breaking scheme that could engender an ‘energy efficiency industry’ is meant to give a boost to energy conservation efforts in the country. It basically creates a market for energy efficiency, through tradeable ‘energy savings certificates’, or ESCerts.
You consume less energy against a benchmark, you get an ESCert that you can sell. It will be bought by an entity whose consumption is above the norm. Therefore, the scheme operates pretty much on the same principle as carbon credits or the ‘renewable energy certificates’.
A Ministry of Power press release issued on Monday describes the PAT mechanism as “an innovative programme with no precedence anywhere else in the world”. The Ministry expects the mechanism to bring about a “transformational change in energy efficiency”.
‘PAT’ is a step taken under the National Mission for Enhanced Energy Efficiency, one of the eight National Missions under the National Action Plan of Climate Change.
“The scheme provides the option to trade any additional certified energy savings with other designated consumers to comply with the Specific Energy Consumption reduction targets,” says the press release.
“The Energy Savings Certificates (ESCerts) so issued to those who exceed their saving targets, will be tradable on special trading platforms to be created in the two power exchanges (Indian Energy Exchange and Power Exchange India),” it says.
The Ministry of Power has notified 478 ‘designated consumers’, 8 industrial sectors (and railway workshops) for the operation of the scheme.
The Government has notified targets for the 478 industrial units and thermal power stations as of March 30, 2012. These targets are to be achieved by 2014-15. Any additional saving will qualify for earning EScerts which could be sold to designated consumers who fall short of the target.
The Bureau of Energy Efficiency will set up a company, Energy Efficiency Services Ltd, which will function as an implementation and monitoring agency for the scheme.
BEE had estimated that the capital investments that would be made in 2011-14 at Rs 30,603 crore.