Implementation EC Act, PAT Scheme

and
Roles & Responsibilities of EM/EA

Saurabh Diddi
Energy Economist
Bureau of Energy Efficiency
 India – Total Primary Energy Supply

 Total primary energy supply has increased from about 350 million toe in 1990
to about 580 Mote in 2004; an increase of about 2.2% per year 2
Future Energy Use in India

 Energy demand is increasing due to rising

incomes, accelerated industrialization,
urbanization and population growth

• 2003-04 : 572 Mtoe

• 2016-17 : 842-916 Mtoe
• 2026-27 : 1406-1561 Mtoe

3
Sectoral Energy Consumption

Total Energy
Others(Non- Consumption
Energy use) Residential 356 Mtoe –
37 42.82 (2005)
Commercial
Transport 37 12

Agriculture
56.18 Industrial 99

Source: IEA
4
Energy Efficiency is essential !

5
 BACKGROUND

 India needs to sustain a GDP growth rate of over 9% per

annum over the next two to three decades in order to
eliminate poverty
 Energy consumption will need to grow at a commensurate
pace for such a GDP growth
 The present installed capacity is 1,43061 MW
 The estimated potential for energy saving during peak
hours is 9240 MW
 The need for efficient use of resources, energy
conservation assume significance and must be an integral
part of the policy tools
6
 EC Act 2001

 Recognizing the fact that efficient use of energy and its

conservation is the least-cost option to mitigate the gap between
demand and supply, GoI enacted the EC Act 2001
 State Governments have designated their State Designated
Agencies (SDAs) to coordinate, regulate and enforce the
provisions of the Act.

 Presently 32 States/UTs have designated their agencies

 31 SDAs have prepared their Comprehensive Five Year Action

Plan
7
 POWERS AND FUNCTIONS OF BUREAU

13 (1) Co-ordinate with designated consumers, designated agencies and other

agencies in performing the functions assigned under this Act

(2) The Bureau may perform such functions and exercise powers –

(a) recommend Central Government norms for processes and energy

consumption standards under clause (a) of section 14 ;

(b) recommend Central Government display label on equipment or on appliances

and manner of display under clause (d) of section 14;

(c) recommend Central Government for notifying designated consumer under

clause (e) of section 14;

(d) take suitable steps to prescribe guidelines for energy conservation building
codes under clause (p) of section 14;

(e) create awareness and disseminate information for efficient use of energy
and its conservation;
8
(f) conduct training of personnel and specialists in the techniques for efficient use of energy and its
conservation;

(g) strengthen consultancy services in the field of energy conservation;

(h) promote research and development in the field of energy conservation;

develop testing and certification procedure, promote testing and certification facilities for energy
consumption of equipment and appliances;

(j) formulate and facilitate implementation of pilot /demonstration projects for promotion of efficient use of
energy and its conservation;

(k) promote use of energy efficient processes, equipment, devices and systems;

(l) promote innovative financing of energy efficiency projects;

(m) give financial assistance to institutions for promoting efficient use of energy and its conservation;

(n) levy fee for services provided for promoting efficient use of energy and its conservation;
(o) maintain a list of accredited energy auditors;
9
SCHEMES…..

 Standards & Labeling Scheme

 Energy Conservation Building Code
 Bachat Lamp Yojana
 Agricultural DSM
 Municipal DSM
 Small and Medium Enterprises
 Designated Consumers
 Certification Examination for Energy Managers
/Auditors
 Strengthening of State Designated Agencies
10
 NMEEE
PAT Scheme
 Sectoral Energy Consumption v/s
Contribution to the country’s GDP

Sector % Energy % Contribution to

Consumption GDP

Industry 40 27
Agri, AH & Fisheries 7 19
Commercial & Services 43 54

Household & Others 10 -

Source : Energy Conservation Guide, PCRA

 Energy Scenario in Industrial Sector

The energy intensity i.e. energy consumed per unit of GDP for industrial sector has
declined by about 1.5% per annum during 2004-05 to 2008-09 although the ratio of
energy intensity in industry to agriculture & service sector hovers around 4.0 – 4.4

Particulars 2004-05 2005-06 2006-07 2007-08 2008-09

Industry GDP (in Rs. Crore) 468,451 506,519 560,775 602,032 617,882
Commercial energy consumption in 152.8 164.7 174.3 181.4 186.3
Industry (in mtoe)
Energy Intensity of industry sector 0.0326 0.0325 0.03102 0.03019 0.03015
(mtoe per Billion Rs. GDP)
Ratio energy intensity: industry vs. 4 4.3 4.2 4.3 4.4
agriculture and service sector
Note: GDP at factor cost at constant (1999-2000) prices (in Rs. Crore)
Source: Green rating Project, 2009, Centre for Science and Environment, New Delhi
Reasons for Change in Energy Usage Pattern
-Change in Technology
-Retrofit Options
Increase -- In-House R&D
Competitiveness --Adoption of EE Techniques
--Fuel Shift

-EC Act 2001

-Energy Audits
Regulatory Compulsion -- Separate EC Cell

-More Publicity thru

various media
Increase -Concept of CB options
Awareness About EC -- NECA
--Rigorous Activities by
various agencies
 Trend of SEC (Elect.) of Cement Industries
(KWH/ton)

95
91
90 88
87
84
85

80 Data of 38 major industries having Dry- 77.5

Process Technology
76.4
75.2
75 Source : TERI

Data of 28 major industries having Dry-

70 Process Technology
Source : BEE

65
SEC has reduced by about 1.7% per year

60
1999-00 2000-01 2001-02 2002-03 2005-06 2006-07 2007-08
 Comparison of Specific Energy
Consumption (in million kcal/tonne)

Country Steel Cement Paper Fertilizer

India 9.50 2.00 11.13 12.23

UK 6.07 1.30 7.62 11.25

USA 6.06 0.95 9.70 11.32

Japan 4.18 1.20 - -

Sweden 5.02 1.40 7.56 -

Source: Energy Conservation Hand Book, PCRA

 NATIONAL MISSION ON
ENHANCED ENERGY EFFICIENCY (NMEEE)

 The National Action Plan on Climate Change

was released by Honorable Prime Minister of
India in June 2008

 The Action Plan Outlines 8 Missions including

National Mission on Enhanced Energy Efficiency
(NMEEE)

 The Mission has outlined specific goals

 Chronology of Events of NMEEE

 30th June 2008 : Hon’able PM releases the National Action

Plan of Climate Change
 September 2008 : NMEEE endorsed by steering Committee,
MoP
 3rd October 2008 : Discussion on Draft outline in PMO
 14th Nov 2008 : First consultation workshop at Mumbai
 24th August 2009 : PM’s council on Climate Change approves
NMEEE in principle
 1st December 2009 : EFC recommends the implementation
plan of NMEEE to Cabinet with a financial outlay of Rs. 235.35
crores
 May 2010 : Cabinet approves the financial outlay
 Ammendment to EC Act, 2001 passed in parliament
 NMEEE – Four New Initiatives

NMEEE

PAT MTEE EEFP FEEED

Energy Energy
Intensive Efficient Fiscal
Industries Appliances Instrument
Stimulate for EE
Targets for
BLY Funding for
Mandatory PRGF
SEEP ESCOs
Energy VCF
DSM
Saving Public
Procurement
 PAT Scheme : Background & Scope (1)

 Covers 685 designated consumers in 9 sectors

 All DCs consume about 240 mtoe energy i.e. about 60% of total energy
consumption of the country

 Targets would be given to all DCs to achieve the same within a time frame
• Achievement > Target E-Scerts
• Achievement < Target Purchase E-Scerts / Penalty

 National Target = 10 mtoe at the end of 1st PAT Cycle ( April 2011 – March
2014)
 PAT Scheme : Background & Scope (2)

 Large band-with in Specific Energy Consumption (As per the BEE

sectoral Study)

 Energy Usage Pattern is varying extremely due to various

diversities

 Hence, the targets would be “Plant Specific”

 PAT Scheme : Approach Towards Target
Setting

 Sectoral Target will be on pro-rata basis of energy consumption among 9 sectors to

achieve National Target

 Establishment of Baseline : (Example)

• As per reported data of last 5 years (2005-06 to 2009-10)
• Normalization Factor (capacity utilization)
• Arithmetic Average of last 3 years value

 Targets to be statistically calculated based on relative SEC approach after grouping

the DCs suitably

 Estimated targets to be justified by the saving potential available

• Baseline Energy Audits
 The target to be reviewed by an expert committee before notification
 Status : PAT Scheme

 5 years data from 588 DCs collected though the notified format
 Data compilation & Analysis in Progress
 Baseline Energy Audit to kick-off from Dec 2010 by CEAs

 PAT Consultation Document is under review

 4 stakeholder workshops conducted at Delhi, Mumbai, Chennai and number of meetings held with
different Industry groups

 Meeting held with Secretary, MoS for iron & steel sector (2nd largest Sector) and DIPP (Cement and Pulp &
paper Sector)

 Discussion with Industry Associations done

 The methodology for M&V system, Issuance of E-Scerts & Trading is under design stage
Roles & Responsibilities of EM/EA
 Powers of Central Government

The Central Government may, by notification , in consultation with the

Bureau:

14 (e) specify intensity or quantity of energy consumed and investment

required for switching over to energy efficient equipments, any user of
energy as a designated consumer;
(f) alter the list of Energy Intensive Industries specified in the Schedule;
(g) establish and prescribe energy consumption norms and standards for
designated consumers. Central Government may prescribe different norms
and standards for different designated consumers;
(h) direct, energy intensive industries to get energy audit conducted by
accredited energy auditor in such manner and intervals of time as may be
specified by regulations;
(i) direct any designated consumer to get energy audit conducted by
accredited energy auditor;
(j) specify the matters to be included for the purposes of inspection under sub-
section (2) of section 17;
 Powers of Central Government

(k) direct designated consumer to furnish to the designated

agency, in such form and manner and within such period, the
information with regard to the energy consumed and action
taken on the recommendation of the accredited energy
auditor;
(l) direct designated consumer to designate or appoint energy
manger for efficient use of energy and its conservation and
submit report, on the status of energy consumption every
financial year to designated agency;
(m) prescribe minimum qualification for energy managers to be
designated or appointed under clause (l);
(n) direct every designated consumer to comply with energy
consumption norms and standards;
(o) direct designated consumer, who does not fulfill the energy
consumption norms and standards prescribed under clause (g),
to prepare a scheme for efficient use of energy and its
conservation and implement such scheme keeping in view of
the economic viability of the investment in such form and
manner as may be prescribed;
List of Energy Intensive Sectors
under EC Act-2001
 Notification of Designated Consumers

Among 15 Energy Intensive Sectors, 9 sectors

have been notified as specified in the Schedule
to the Energy Conservation Act, 2001 (52 of
2001), having annual energy consumption as
indicated against each industry, as Designated
Consumer for the purposes of the EC Act:-
Sector wise Distribution of DCs
Name of the
Sl. No No of DCs
sector
1 Aluminium 11
2 Cement 92
3 Chlor Alkali 21
4 Fertilizer 23
5 Paper 69
6 Power 154
7 Railways 8
8 Steel 110
9 Textile 197
Total 685
 Deliverables

EC Act, 2001 requires DCs under section 14 :

 Every Designated Consumer to furnish energy consumption returns to Designated
Agencies and BEE.
 Capture of information related to energy consumption across various processes
 Adoption of best practices in different industries.
 Appoint or Designate Energy Manager for their Industry.
 Energy Audits on a regular / periodic basis
 Implement techno-economically viable recommendations
 Submit report on steps taken
 Comply with specific energy consumption norms and standards for the industrial
sectors
 Continuous improvement in the specific energy consumption of industries thereby
reducing the bandwidth (gap between the best performers and the low performers
among the specific energy consumption)
 Responsibilities of Energy Managers

 Prepare an annual activity plan and present to management

concerning financially attractive investments to reduce energy costs
 Establish an energy conservation cell within the firm with
management’s consent about the mandate and task of the cell
 Initiate activities to improve monitoring and process control to reduce
energy costs
 Analyze equipment performance with respect to energy efficiency
 Ensure proper functioning and calibration of instrumentation required
to assess level of energy consumption directly or indirectly
 Prepare information material and conduct internal workshops about
the topic for other staff
 Improve disaggregating of energy consumption data down to shop
level or profit center of a firm
 Establish a methodology how to accurately calculate the specific
energy consumption of various products/services or activity of the firm
 Responsibilities of Energy Managers

 Develop and manage training programme for energy

efficiency at operating levels
 Co-ordinate nomination of management personnel to
external programs
 Create knowledge bank on sectoral, national and
international development on energy efficiency technology
and management system and information denomination
 Develop integrated system of energy efficiency and
environmental upgradation
 Wide internal & external networking
 Co-ordinate implementation of energy audit/efficiency
improvement projects through external agencies
 Establish and/or participate in information exchange with
other energy managers of the same sector through
association
 ENERGY AUDITORS

 RESPONSIBILITIES
 Conduct internal audit of individual equipment/system once a year
 ROLES
 Submit copy of reports to Energy Manager with recommendation on
action
 Keep record of calibration status of all energy measurement
instruments/devices
 Maintain portable tools/instruments required for audit
 Keep abreast of all Codes of practices for energy efficiency testing
 Training of measurement staff on use of instruments and Codes
 Be a team member of the external audit team (Accredited Energy
auditor)
 For ESCO performance contract projects be verifier for M&V system
and baseline and savings.
Thanks ….
For further information Please Contact

Saurabh Diddi
Energy Economist
Bureau of Energy Efficiency
Ministry of Power, GOI
4 th
Floor, Sewa Bhawan, R.K.Puram
NEW DELHI – 110066
Ph.: 011-26179699 Fax :26178352
Email : reply2saurabh@yahoo.co.in
Mission Goals

 Market-based approaches to unlock energy

efficiency opportunities, estimated to be
about Rs. 74,000 Crores
 By 2014-15:
• Annual fuel savings in excess of 23 million toe
• Cumulative avoided electricity capacity addition of
19,000 MW
• CO2 emission mitigation of 98 million tons per year
 The PAT Scheme

 The market based mechanism to

enhance the cost effectiveness in
improving the Energy Efficiency in
Energy Intensive industries through
certification of energy saving which
can be traded
 List of DCs

Industry Sector Annual Energy No. of Identified DCs

Consumption Norm to be
DC (mtoe)

Aluminum 7500 11
Cement 30000 92
Chlor-Alkali 12000 23
Fertilizer 30000 22
Pulp & Paper 30000 70
Power 30000 154
Iron & Steel 30000 110
Textiles 3000 197
Railways 30000 8
State-wise DCs (2009-10)
 Estimated Energy Consumption
in DCs

Sector MTOE
Power (Thermal) 160.3
About 55% of DCs
Integrated Steel 26.98 Contribute 96% of Total
Cement 14.47 Consumption

Fertilizer 11.95
Sponge Iron 9.1
Textile 3.5
About 45% of DCs
Aluminium 2.42 contribute rest 4% of
Paper 1.38 Total Consumption

Chlor-Alkali 0.43
TOTAL 230.53 Railways : 9.8 MTOE additional
 Target in PAT

Target is defined as the % reduction of ‘Specific Energy Consumption (SEC)’ from

Baseline value.

All forms of Energy Product

Plant System
E Boundary P

SEC = E / P
S Baseline SEC

E
C Target SEC
Reduction in SEC

Expressed in %

Y1 Y2 Y3
 Sectoral studies by BEE on ‘Setting Up of Sectoral Bandwidth for
DCs’ have revealed the impact on SEC due to above diversities

Sector Range of SEC

Power plant 2300 – 3400 kcal / kwh
Fertilizer 5.86 – 9.11 Gcal/T of Urea
Cement 665 – 900 Kcal/Kg of Clinker (Thermal)
66 – 127 KWH/ T (Elect)
Integrated Steel 6.15 – 8.18 Gcal / tcs
Sponge Iron 4.4 – 7.6 Gcal / T (Thermal)
72 – 135 KWH/T (Elect)
Aluminium (Smelter) 15875 – 17083 KWH/T
Aluminium (Refinery) 3.28 – 4.12 MKcal / T of Alumina
Pulp & Paper 25.3 – 121 GJ/T
Textile 3000 – 16100 Kcal/kg (Thermal)
0.25 – 10 KWH/Kg (Elect)
Chlor-Alkali 2300 – 2600 kwh/ T of caustic soda
 Reasons for Large Energy Usage
Bandwidth

The energy usage pattern varies widely in industries of a particular sector

due to various diversities like
-Scale of Production (Installed Capacities)
- Use of Raw Material
- Process Technology
- Vintage
- O & M Practices
- Type of Product Output etc.
Factors of Diversity Most Affected Sectors
a) Raw Material Input Pulp & Paper, Fertilizer, Power Plant, Textile
a) Quality of Raw Material / Fuel All sectors
a) Process & Technology Aluminium, Iron & steel, Chlor-Alkali, Paper
a) Final Product output Textile, Iron & Steel, Aluminium
a) Vintage All Sectors
a) Capacity Utililization All sectors
 Approach for Setting Targets Depends upon
the Objective of the Scheme
Total Saving Objective = 10 mMTOE
• Setting Sector Targets based on available saving
potential of Industries and Program Objectives

Energy Share of Apportioned Energy No. of identified

SN Sector
Consumption Consumption reduction DCs
(mMTOE) (%) (mMTOE)
1 Power (Thermal) 160.30 66.64% 6.66 154
2 Iron & Steel 36.08 15.00% 1.50 110
3 Cement 14.47 6.02% 0.60 92
4 Fertilizers 11.95 4.97% 0.50 22

5 Railways (Approximated) 9.00 3.74% 0.37 8

6 Textile (Approximated) 4.50 1.87% 0.19 197

7 Aluminium 2.42 1.01% 0.10 11
8 Paper & pulp 1.38 0.57% 0.06 70
9 Chlor-Alkali 0.43 0.18% 0.02 21
Total 240.53 100.00% 10.00 685
 Example : Baseline Estimation

Name of Unit ABC Ltd.

Place XYZ
Total Installed Capacity 1600000 TPD Sector : Cement

Particulars Unit 2005-06 2006-07 2007-08 2008-09 2009-10

Installed Capacity Tonnes 1200000.00 1200000.00 1600000.00 1600000.00 1600000.00
Actual Production (Cement) Tonnes 995000 1146699 1319800 1325000 1199000
Capacity Utilization % 82.92 95.56 82.49 82.81 74.94
Average in last 3 yreas % 80.08
Deviation from Average in last 3 yras % 3.01 3.41 6.42

Total Energy Input Million Kcal 919757.4 985287.9 989421.4 1062985.0 977621.3

Total Energy Consumption MTOE 91976 98529 98942 106299 97762

Gate-to-Gate SEC w.r.t. cement Kcal/kg 924 859 750 802 815

Base Year 2009-10

Average Capacity Utilization % 80.08
Base line SEC (Gate-to-Gate) kCal/kg 789
 Example : Target Setting (1)

Production (in Tonnes) Estimated SEC (in MTOE/ ton)

Total
Energy To be
Plant Average Relative %
Average consumpti Energy
Name 2005-06 2006-07 2007-08 production 2005-06 2006-07 2007-08 SEC Target
SEC on Saving
(MT)
(in MTOE)

Plant1 3,62,793 3,68,867 3,78,157 3,69,939 1.275 1.272 1.277 1.274 1.000 4,71,455 X 4714.55x

Plant2 3,58,954 3,58,734 3,59,213 3,58,967 1.364 1.365 1.362 1.364 1.070 4,89,546 1.07X 5238.14x

Plant3 76,867 2,07,741 2,50,981 1,78,530 1.569 1.355 1.276 1.400 1.098 2,49,920 1.10X 2749.12x

Plant4 66,347 73,008 99,406 79,587 1.425 1.452 1.408 1.428 1.121 1,13,679 1.12X 1273.2x

Plant5 NA NA 37,635 37,635 NA NA 1.780 1.780 1.397 66,995 1.40X 937.93x

Total 13,91,594 14912.9X

Example : Target Setting (2)

Total
14912.94x MTOE
Saving
Target
62000 MTOE
Saving

X 4.15 %

Plant Name Baseline SEC Target (%) To be SEC To be MTOE

Plan1 1.274 4.15 1.22 4,51,889
Plan2 1.364 4.44 1.30 4,67,806
Plant3 1.400 4.56 1.34 2,38,527
Plant4 1.428 4.65 1.36 1,08,391
Plant5 1.780 5.80 1.68 63,111
Total energy consumption at the end of 3 years (in MTOE) 13,29,725
Total present energy consumption (in MTOE) 13,91,594
Energy saving during the period 61,870
Number of Clusters depend upon the Bandwidth of
Baseline SEC

Cluster 2
Cluster 1
 THE PAT SCHEME ….. Approach

INDUSTRY (DC) Review of Present Energy Scenario &

Bandwidth (Completed)

Development of Baseline Formats

with System Boundaries
Establish Baseline Data Collection, Compilation & Analysis
Verification of Data

Set Targets for SEC Reduction

Technology Transfer, EE Technology, R&M, R&D

Achieve the Target
Verification Protocol

Trade the higher achieved saving through E-Certs

 Activity Flow Sheet
Baseline & Target
Setting
Designated
Consumer
Baseline Format
Design

Prepare PAT Issue of e-Certs

Assessment after successful
Document (PAD) M&V
Finanalization
of DC List Getting
Information
Through Base Line
Format
BEE

Getting information
through “Form#1” Data Compilation/
Evaluation

Verification of PAD Recommendation

through DENA for e-certification

Target Setting
[Declaration of Base
Year, Target Year ] Validation of PAD
through DENA
 Target Setting for Power
Station

Variation in Net Station Heat Reduction Target for % % Reduction

Rate from Design Net Heat deviation in the Net Target in Net
Rate Station Heat Rate Station Heat Rate

Upto 5% 10% 0.5

More than 5% and upto 10% 15% 0.75 to 1.5

More than 10% and upto 20% 20% 2.0 to 4.0

More than 20% 25% 5 and above

 Legal Framework

•Furnish report of energy consumption to the Designated Authority of the State as well as
to BEE (section 14(k)).
•Designate or appoint an Energy Manager who will be in-charge of submission of annual
energy consumption returns of the Designated Agencies and BEE (section 14 (l)).
•Comply with the energy conservation norms and standards prescribed under section 14
(g) of the Act.
•Purchase Energy Saving Certificates (ESCerts) for compliance to section 14 (g) in the event
of default. The Act has been amended with the addition of new sub-section 14A to enable
this and section 14A(2) allows such trading. EScerts are defined by adding a new sub-
section 2(ma).
•Monitoring and Verification of compliance by Designated Energy Auditors (DENA) which
will be prescribed the Government/ BEE under section 14A/13 (p) of the Act.
•Excess achievement of the target set would entail issuance of ESCerts under section
14A(1).
•Penalty for non-compliance being Rs. 10 lakhs and the value of non-compliance measured
in terms of the market value of tones of oil equivalent by inserting a new section 26(1A).
•BEE to be the overall regulator and dispute resolution agency and Energy Efficiency
Service Ltd. (EESL) to be the process manager.