Energy Efficiency in India

Policy and Regulatory Framework

The importance and need for promoting energy efficiency is quite well known. In the past, insufficient capacity additions, increasing environmental concerns and recurring overall energy shortages are some of the key reasons that necessitate promotion of energy efficiency in the country. Further, the goal of sustainable development and increasing concerns on environmental pollution make energy efficiency and conservation an integral part of the development programme Considering the significant potential of energy savings, the Government of India enacted the Energy Conservation Act, 2011 to meet the legal requirement for enforcing energy efficiency and conservation measures.

Energy Conservation Act 2001

The Act provides for:

• Establishment of Bureau of Energy Efficiency (BEE) in place of the existing Energy Management Centre.

• Declaring a user or class of users of energy as a designated consumer.

• Laying down minimum energy consumption standards, labelling identified appliances/equipment and norms for energy intensive industries. Formulation of energy consumption codes.

• Establishment of an Energy Conservation Fund both at the Central and State levels.

• No penalties would be effective during the first five years as the focus during this period would be on promotional activities and creating the infrastructure for implementing the Act.

Energy Conservation (Amendment) Act 2010

The amended Act expands the scope of energy conservation norms for buildings and tightens the applicability of energy efficiency norms for appliances/equipment. It also provides a framework within which savings on energy use can be traded with those industries that are energy efficient and those who consume more than the maximum limit set by the government. It also broadens the range of commercial buildings to which such building codes apply which also falls in the category of connected load of more than 100kW, or contracted demand of more than 120 kVA. Under the amended Act, the central government can issue energy savings certificates to those industries whose energy consumption is less than the maximum allowed. Such certificates can also be sold to other consumers whose consumption is more than the maximum allowed in accordance with the procedure prescribed. The Act also allows for the setting up of an Appellate Tribunal for Energy Conservation (rather being examined by the appellate tribunal established under the Electricity Act, 2003), which would hear appeals against orders of the Central or State government. It also tightens the penal provisions for offences committed under the Act. Each offence shall attract a penalty of Rs. 10 lakh (Rs 10,000 earlier), with an additional penalty of Rs 10,000 for each day that the offence remains (Rs 1,000 earlier). The additional penalty, for those industries who consume energy in excess of norms, will be the value of the extra energy consumed.