DAM Prices 28 Apr 2024 (Rs./kWh)

 

One of the most important initiative under National Mission on Enhanced Energy Efficiency (NMEEE) is Perform, Achieve & Trade (PAT) mechanism, launched by Bureau of Energy Efficiency (BEE) under Ministry of Power on 4th July, 2012 at New Delhi.

PAT is a market-based mechanism to step up and incentivize energy efficiency in large energy-intensive industries.

The scheme covers 478 Designated Consumers(DCs) from eight energy-intensive sectors—thermal power, aluminium, cement, fertilizer, iron and steel, pulp and paper, textiles and chlor-alkali. These eight sectors account for 25% of GDP and about 45% of India’s primary energy consumption and consume 165 million tonne equivalent of energy consumption annually.

It facilitates the DCs to achieve their legal obligations under Energy Conservation Act, 2001, but also provides them with necessary market-based incentives to over-achieve the targets set for them.

The sectors covered under first PAT cycle are-

Sector-wise number of DCs

 

 

A. Perform

Target-setting phase

• Specific Energy Consumption (SEC) targets are set for 478 identified Designated Consumers (DCs) from base year in percentage terms
• Target for each DC specified by BEE through notification
• Target to be achieved over a period of three years commencing 1st April, 2012

 

B. Achieve

Target-achieve phase

• First target cycle from 1st April, 2012 to 31st March, 2015
• DCs to undertake measures to reduce their specific energy consumption

 

Monitoring & Verification (M & V) phase

• To commence from April 2013 and beyond
• DCs to submit Performance Assessment Document to State Designated Agency (SDA), with a copy to BEE within three months after the end of first year of target cycle
• Verification report to be submitted by accredited energy auditor to BEE
• In case of any discrepancy, BEE in consultation with SDA to appoint a fresh accredited energy auditor for check-verification
• Cross-verification report to be submitted by accredited energy auditor to BEE and SDA in proposed format

 

C. Trade

Issuance of ESCerts & trading

• Based on cross-verification report, BEE to recommend to the Central Government for issuance of Energy Saving Certificates (ESCerts) for DC.
• DCs who achieve reduction in baseline specific energy consumption (SEC) in excess of targets will be entitled to sell ESCerts.
• DCs who under-achieve their targets can comply by purchasing ESCerts from electricity exchange or by paying a penalty.
• ESCerts to be traded only on electricity exchanges such as IEX.
  Penalty for non-compliance in accordance with EC Act, 2001. Also, the amount of unmet target to be paid at prevailing oil price.

 

 

Compliance	Mandatory
Target Entities	Designated Consumers
Buyers	Industries not achieving target
Sellers	Industries achieving beyond target
Target	6.6 million toe for 1st Cycle
Mechanism	Cap and Trade
Phase Cycle	3 Years
ESCerts	1 ESCert = 1 MTOE (Metric Tonne of Oil Equivalent)
Trading Platform	Power Exchange only
Penalty	As per Energy Conservation Act, 2001(Link with market value of oil equivalent)
Banking	Allowed  for two consecutive cycles
Compliance Period	3 Years for DCs