Consultative paper soon to help fix energy saving targets

The Bureau of Energy Efficiency will release the consultative document for fixing the methodology of energy saving targets for select industry under the proposed PAT (Perform, Achieve and Trade) scheme, in early September.Parliament has already passed the Energy Conservation (Amendment) Bill 2010 to pave way for launching the scheme. The Bill is now awaiting Presidential assent.

“The consultative document will be placed for deliberation of the CEOs of the identified industries to define the final methodology to fix the energy savings targets. We are hopeful that the exercise (consultation with CEOs) will be over in October and the energy savings targets for all the industries will be notified in December,” Mr Ajay Mathur, Director-General of BEE, told newspersons here on Friday.He was in the city in connection with an environment and energy conclave organised by the Bengal Chamber of Commerce and Industry.

The Bureau has set a five per cent energy saving target for 685 industrial units (from sectors like power, iron and steel, textiles, paper pulp, fertiliser, cement, alumina and railways), consuming 55 per cent of the 450 million tonne oil equivalent fossil fuel consumed in the country every year, in a three-year cycle beginning April 2011.

Under the scheme, the energy inefficient units (vis-à-vis the targeted levels) will require to buy energy savings certificates (ESC) from the efficient units to ensure an over all improvement in energy efficiency. The certificates are tradable on energy exchanges.

On the tentative methodology, Mr Mathur said that all industries except power sector are expected to reduce their specific energy consumption. Targets for power generation sector will be based on the design efficiency of the respective units.“We propose to set the targets for power sector based on how far a plant is from its design efficiency,”Mr Mathur said adding that once the targets are set it would be left to the electricity regulator to implement them.

According to Mr Mathur, the scheme scheduled to be implemented with effect from April 2010 may have significant impact on the power generation sector of the country as the inefficient units may either have to pay penalties through purchase of certificates or have to invest significantly in plant and machinery for the requisite energy efficiency.

“We have included each and every power utilities in the country as well captive power stations using over 30,000 tonne oil equivalent a year under the energy savings scheme,” he said.

Meanwhile BEE's proposal for a “graded excise structure for efficient and in efficient products” is caught in the GST (Goods and services Tax) tangle.“The Finance Ministry is positive towards the proposal. However, no formal steps could be taken in this direction until and unless GST roll out is complete,” he said.