Perform Achieve and Trade (PAT) Scheme

Context:

Perform Achieve and Trade (PAT) scheme, targeting carbon emission reduction in 13 energy intensive sector, leads to energy savings of ~ 17 MTOE and results into mitigation of about 87 million tonnes of CO2, per year.

Why this scheme:

The Ministry of Power is implementing measures to save energy with an objective  to reduce  CO2 emission  levels in the environment from industries, establishments and by using equipment/ appliances. In this regard, Perform Achieve and Trade (PAT) Scheme is a key programme for large industries and establishments. This scheme aims to enhance the cost-effectiveness of energy savings by upgrading technologies or by taking in-house actions to minimize energy consumption.

Perform, Achieve and Trade (PAT)

• In line with the energy conservation and efficiency policies of the Bureau of Energy Efficiency (BEE) under the Ministry of Power, Perform, Achieve and Trade (PAT) scheme under the National Mission for Enhanced Energy Efficiency (NMEEE) as a part of the National Action Plan on Climate Change (NAPCC) was launched in 2012.
• This scheme aims to enhance the cost-effectiveness of energy savings by upgrading technologies or by taking in-house actions to minimize energy consumption.
• The scheme provides mandatory targets for the identified Large Units and the excess energy saved by them is issued as Energy Saving Certificate, which are tradable instruments. The different industries and establishments are assigned separate energy efficiency targets based on their levels of energy consumption and the potential for energy savings.
• The scheme has set energy efficiency targets for industries.
• Those that fail to achieve targets will have to pay penalty.
• PAT has been launched under the National Mission for Enhanced Energy Efficiency, one of the eight missions under the umbrella National Action Plan on Climate Change, launched in June 2008.
• In its first cycle of three years, the scheme covers eight energy guzzling sectors—thermal power, aluminium, cement, fertilizer, iron and steel, pulp and paper, textiles and chlor-alkali.
• Together, these sectors account for 40 per cent of India’s primary energy consumption.
• PAT is a market based mechanism in which sectors are assigned efficiency targets. Industries which over-achieve will get incentives in the form of energy saving certificates.
• These certificates are tradeable and can be bought by other industries which are unable to achieve their targets. These certificates will be tradeable at two energy exchanges: Indian Energy Exchange and Power Exchange India. The price of these certificates will be determined by the market.
• PAT cycle I stretching from 2012-13 to 2014-15, was applicable on eight energy-intensive sectors. There are about 478 numbers of Designated Consumers in these 8 sectors accounting for about 165 million tonnes of oil equivalent of energy consumption annually i.e, 33% of India’s primary energy consumption.
• PAT cycle II stretching from 2016 to 2018-19 shall include 3 new sectors i.e, petroleum refineries, discoms and railways, along with the previous 8 energy-intensive sectors of PAT cycle I.
• PAT cycle III stretching from 2017-20 shall include 116 new units under it and have been given a reduction target of 1.06 million tonnes of oil equivalent.
• By the year 2020 the scheme coverage has been extended to 13 most  energy intensive sectors in the country including Cement, Iron and Steel, Fertilizer, Thermal Power Plants, Refineries, Petrochemicals, Railways and others.
• This initiative is currently leading to energy savings of about 17 MTOE (Million Tonnes of Oil Equivalent) and has resulted into mitigation of about 87 million tonnes of CO2, per year, a figure close to total CO2 emissions of country like Bangladesh.
• The objective of S&L is to provide the consumers, an informed choice about the energy savings potential and thereby the cost saving due to the products available in the market.
• The scheme includes display of energy performance labels on key energy consuming equipment & appliances, with stipulation for minimum energy performance standards. The scheme has now included 28 appliances till March 2021 and over 15000 models of energy efficient products have been awarded Star labels, a popular symbol among the consumers for endorsing energy savings.
• The impact of using a huge number of efficient products by the citizens have resulted into an estimated electricity savings of 56 Billion Units during 2020-21, worth over Rs. 30000 crore.
• This initiative has been effective in reducing the CO2 emissions of approx. 46 Million Tonnes every year. Such steps have become very effective and a simplified approach is considered more useful to promote energy efficiency globally.
• Many countries have followed this labeling programme, thereby reaping benefits of energy savings and also in reducing CO2 emissions.

Carbon dioxide (CO2)

Carbon Dioxide (CO2) is the well-known greenhouse gas on our planet Earth. Rapid increase in its concentration in atmosphere is major cause of global temperature rise which in turn leads to many environmental and healthcare problems. The  ‘greenhouse effect’ works in case of CO2 when solar radiation hits the surface of the earth, part of the heat escapes the atmosphere while balance heat gets trapped which in turn, raises the earth’s temperature. This is a phenomenon popularly known as global warming. This primarily results in severe impact on  climate change, which has a ripple effect over all natural ecosystems, and by extension, all industries and people around the globe.

About Bureau of Energy Efficiency (BEE)

• The Government of India has set up the Bureau of Energy Efficiency (BEE) on 1st March 2002 under the provision 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 principles.
• The primary objective of reducing energy intensity of the Indian economy within the overall framework of the Energy Conservation Act, 2001.
• This will be achieved with active participation and collaboration of all stakeholders, resulting in accelerated and sustained adoption of energy efficiency in all sectors.

Source: PIB