Our country has a vast potential of energy saving.

It is estimated that measures for energy

conservation and improving energy efficiency have the potential for creating an equivalent capacity
of a minimum of 25000 MW. The Government of India enacted the Energy Conservation Act for
redeeming this potential and it came into force with effect from 1st March, 2002. The Act provides
the legal framework, institutional arrangement and a regulatory mechanism at the Central and State
level to embark upon the energy efficiency drive in the country.

Background of Energy Conservation Act, 2001

As a thumb rule, the energy needs of a country are about 1.5 times its GDP or the economic growth
rate. India’s projected growth rate up to the year 2012 is about 8%. This necessitates commensurate
needs of power. You will study in Unit 1 of the Course BEE-002 that India’s coal reserves could last
for about 200 years, but about 73% coal cannot be used because of its high ash content. Our known
oil and natural gas reserves are meagre and may last for only 20 years or so. Our oil imports are
already very high and dependence on further imports is bound to affect our economy and energy
security. This scenario warrants a firm thrust on
Improving energy efficiencies in new generation capacities, supply side, demand side and end-user
side; and
Lowering the energy intensity in our economy

2.2.1 Important Features of the Act

Setting up of the Bureau of Energy Efficiency The Bureau of Energy Efficiency has been established
with effect from 1st March, 2002 under the provisions of the Energy Conservation Act, 2001. It is
responsible for the implementation of policies and programmes related to energy. It also
coordinates the implementation of energy conservation activities. The mission of the Bureau is to
institutionalize energy efficiency services, enable delivery mechanisms in the country and provide
leadership to energy efficiency in all sectors of economy. Its primary objective is to reduce energy
intensity in the Indian economy.

The role of the Bureau of Energy Efficiency is to:

• prepare standards and labels of appliances and equipment;
• develop a list of designated consumers;
• specify certification and accreditation procedures;
• prepare building codes;
• maintain Central EC fund;
• undertake promotional activities in coordination with centre and state level agencies;
• develop Energy Service Companies (ESCOs);
• transform the market for energy efficiency; and
• create awareness through a variety of measures including clearing house. For performing the role
assigned to it, the Bureau is supposed to
• coordinate with designated consumers, designated agencies and other agencies
• recognize and utilize the existing resources and infrastructure;
• exercise powers as assigned to it, including recommending to the Central Government the norms
for processes and energy consumption standards; and
• take steps to prescribe guidelines

Standards and Labelling Standards and Labelling (S & L) has been identified as a key activity for
improvement in energy efficiency. The S & L programme, when in place would ensure that only
energy efficient equipment and appliances would be made available to the consumers. The main
provisions of the Act on Standards and Labelling are to:
• evolve minimum energy consumption and performance standards for notified equipment and
appliances;
• prohibit manufacture, sale or purchase or import of such equipment or appliance, which does not
conform to the energy consumption standards;
• introduce a mandatory labelling scheme for notified equipment appliances to enable consumers to
make informed choices; and
• disseminate information on the benefits of energy conservation and efficient energy use to
consumers. The equipments to be covered initially under the S&L programme are household
refrigerators, air-conditioners, water heaters, electric motors, agriculture pump sets, electric lamps
and fixtures, industrial fans and blowers, and air-compressors

Designated Consumers:- The Act provides the list of designated consumers, which includes the
energy intensive industries, Railways, Port Trust, Transport Sector, Power Stations, Transmission &
Distribution Companies and Commercial buildings or establishments. The government notifies the
designated consumers. The main provisions of the Act on designated consumers are as follows:
• The designated consumer should get an energy audit conducted by an accredited energy auditor.
(Energy audit is explained in Unit 3 of the Course BEE-002.)
• Energy managers are required to be appointed or designated by the designated consumers. They
should have passed the Certification examination arranged by the Bureau.
• Designated consumers would comply with norms and standards of energy consumption as
prescribed by the GOI.

Energy Conservation Building Codes Energy Conservation Building Codes encompass the norms and
standards of energy consumption expressed in terms of per square metre of the area wherein
energy is used.
The main provisions of the Act on Energy Conservation Building Codes are as follows:
• The BEE would prepare guidelines for Energy Conservation Building Codes (ECBC);
• ECBC would be notified to suit local climate conditions or other compelling factors by the
respective states for commercial buildings constructed after the rules relating to energy
conservation building codes have been notified. In addition, these buildings should have a connected
load of 500 kW or contract demand of 600 kVA and above.
• Energy audit of specific designated commercial building consumers would also be prescribed. By
energy audit, we mean verification, monitoring and analysis of energy use including submission of
technical report containing recommendations for improving energy efficiency with cost benefit
analysis and an action plan to reduce energy consumption.

Central Energy Conservation Fund

This fund is to be set up at the Centre to develop the delivery mechanism for large-scale adoption of
energy efficiency services such as performance contracting and promotion of Energy Service
Companies (ESCOs). The fund is expected to give a thrust to R & D and demonstration in order to
boost market penetration of efficient equipment and appliances. It would support the creation of
facilities for testing and development and to promote consumer awareness.

Role of Central and State Governments

The following roles of Central and State Governments are envisaged in the Act: The Central
Government will • notify rules and regulations under various provisions of the Act; • specify norms
for processes and energy consumption standards for any equipment/appliances which consume,
generate, transmit or supply energy; • specify equipment or appliances to be covered by this Act; •
prohibit manufacture or sale, purchase or import of equipment or appliance, till such appliance or
equipment conforms to energy consumption standards; • ensure direct display of such particulars on
label on equipment or on appliance and specify the manner in which it is to be displayed; • alter the
list of Energy Intensive Industries; • establish and prescribe such energy consumption norms and
standards for designated consumers, as it deems necessary; • provide initial financial assistance to
BEE and EC fund; and

• coordinate with various State Governments for notification, enforcement, penalties and
adjudication. For further details, you may like to refer to Section 14 of the Act. Each State
Government will • amend the energy conservation building codes to suit the regional and local
climatic conditions; • designate a state level agency to coordinate, regulate and enforce provisions
of the Act; • constitute a State Energy Conservation Fund for promotion of energy efficiency
The State Government under section 15 (a) of the Act, in consultation with the Bureau may amend
the energy conservation building codes to suit the regional and local climatic conditions and may by
rules made by it specify and notify energy conservation building codes with respect to use of energy
in the buildings.

Further, the State Government is also empowered in consultation with Bureau to coordinate,
regulate and enforce provisions of the Act within the State under section 15 (d) of the Act. Thus, the
respective state Governments play a key role in the compliance of the ECBC Rules (Annexure 7A).

The Central Government or the State Government under the section 18 of the Act may, in the
exercise of its power and performance of its functions and for efficient use of energy and its
conservation, issue such directions in writing as it deems fit for the purposes of this Act to any
person, officer, authority or any designated consumer and such person, officer or authority or any
designated consumer shall be bound to comply with such directions.

Explanation. – For avoidance of doubts, it is hereby declared that the power to issue directions
under this section includes the power to direct –
(a) regulation of norms for process and energy consumption standards in any industry or building or
building complex; or
(b) regulation of the energy consumption standards for equipment and appliances.

ECBC Scheme

The key objectives of ECBC is to set a long term vision for building energy efficiency, and include new
types of buildings, focus on design strategies for reducing energy use, establish a baseline of energy
performance and promote buildings under the act.

The clause (c) of Section 2 of the Act defines “Building” as any structure or erection or part of
structure or erection after the rules relating to energy conservation building codes have been
notified under clause (p) of section 14 and clause (a) of section 15 and includes any existing structure
or erection or part of structure or erection, which is having a connected load of 100 Kilowatt (kW) or
contract demand of 120 Kilo-volt Ampere (kVA) and above and is used or intended to be used for
commercial purposes.

The clause (j) of Section 2 of the Act defines “Energy Conservation Building Codes” means the norms
and standards of energy consumption expressed in terms of per square metre of the area wherein
energy is used and includes the location of the building.

Further, the ECBC rules define a “building complex” as a building or group of buildings constructed in
a contiguous area for business, commercial, institutional purposes or assembly of buildings under
the single ownership of individuals or group of individuals or under the name of a co-operative
group society or on lease and sold as shops or office space or space for other commercial purposes;
7.2.5 While the ECBC is developed at Central level by the Central Government in consultation with
Bureau, its implementation lies with the States Ministry of Urban Development. The ECBC Rules can
be included by updating the generic building bye-laws of Municipal Authorities of every state for
compliance. 7.2.6 The BEE provides support to States by establishing the ECBC Cells. The major role
of ECBC Cells is to support amendment of ECBC for respective States, amendments in existing bye
laws, preparation of notification documents, energy efficient design templates for public buildings,
PWDs in design and construction of public buildings, building up technical capacities for code
compliance and documentation for compliance.
The compliance of ECBC Rules shall be ensured by an independent third party known as Empanelled
Energy Auditor (Buildings), who has been empowered to issue compliance certificate after verifying
all the requirements of these rules. 7.2.8 The building is assessed on “energy performance index”
(EPI) which means annual energy consumption of a building in kilowatt-hours per square meter of
the area of the building which shall be calculated as per the following formula: Energy Performance
Index = (annual energy consumption in kWh)/ [total built up area (excluding storage area and
parking in the basement) in m2 .
15. Power of State Government to enforce certain provisions for efficient use of energy and
its conservation.-The State Government may, by notification, in consultation with the
Bureau- -The State Government may, by notification, in consultation with the Bureau-"
(a) amend the energy conservation building codes to suit the regional and local climatic
conditions and may, by rules made by it, specify and notify energy conservation building
codes with respect to use of energy in the buildings;
(b) direct every owner or occupier of a building or building complex being a designated
consumer to comply with the provisions of the energy conservation building codes;
(c) direct, if considered necessary for efficient use of energy and its conservation, any
designated consumer referred to in clause (b) to get energy audit conducted by an accredited
energy auditor in such manner and at such intervals of time as may be specified by
regulations;
(d) designate any agency as designated agency to coordinate, regulate and enforce provisions
of this Act within the State;
(e) take all measures necessary to create awareness and disseminate information for efficient
use of energy and its conservation;
(f) arrange and organise training of personnel and specialists in the techniques for efficient
use of energy and its conservation;
(g) take steps to encourage preferential treatment for use of energy efficient equipment or
appliances;
(h) direct, any designated consumer to furnish to the designated agency, in such form and
manner and within such period as may be specified by rules made by it, information with
regard to the energy consumed by such consumer;
(i) specify the matters to be included for the purposes of inspection under sub-section (2) of
section 17.
The Government of India set up Bureau of Energy Efficiency (BEE). on 1st March 2002
under the provisions of the Energy Conservation Act, 2001. The mission of the Bureau of
Energy Efficiency is to assist in developing policies and strategies with a thrust on self-
regulation and market pri nciples, within the overall framework of the Energy Conservation
Act, 2001 with the primary objective of reducing energy intensity of the Indian economy. 
Role of BEE
BEE co-ordinates with designated consumers, designated agencies and other organizations
and recognize, identify and utilize the existing resources and infrastructure, in performing the
functions assigned to it under the Energy Conservation Act. The Energy Conservation Act
provides for regulatory and promotional functions.

One way to deal with the increased energy demand is to expand energy production which
involves huge investment. This problem can be solved to a great extent by conservation of
energy. Increasing energy production is an expensive and long term option, whereas energy
conservation offers a cost effective and immediate solution. As the conventional energy
sources are fast depleting and cost of energy is increasing, it is very essential to conserve
energy and use it more efficiently. This also helps in reducing environmental pollution. Thus,
energy conservation means a reduction in energy consumption without making any sacrifice
in the quality or quantity of production. It also means increasing the production from a given
amount of energy input by reducing losses or wastage and maximizing the efficiency. Energy
efficiency is achieved when energy intensity in a specific product, process or area of
production or consumption is reduced without affecting output, consumption or comfort
levels. Promotion of energy efficiency will contribute to energy conservation and is therefore
an integral part of energy conservation promotional policies
Support for implementing state-wise sector specific energy saving plan by the SDAs.

Continued engagement of SDAs with energy efficiency professionals like energy auditors, energy
managers and ESCOs

Implement various EE demonstration projects in the states to showcase the effectiveness of the
most advanced energy efficient technology and pursue state governments to replicate the project in
other parts of the state.

LED village campaign in the villages and pursue state governments to replicate the project in other
parts of the state.

Publicity /awareness on EE in the states and Workshops/ training programmes for all the SDA’s