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Perform achieve and trade mechanism (PAT)

Panel: 3. Energy use in industry: The road from policy to action

This is a peer-reviewed paper.

Author:
Neeraj Dhingra, Bureau of Energy Efficiency, India

Abstract

PAT is a market based mechanism to enhance cost effectiveness of improvements in energy efficiency in energy-intensive large industries and facilities, through certification of energy savings that could be traded. Thus the PAT Mechanism would broadly cover the 9 sectors designated by Government of India under Energy Conservation Act, 2001. The 9 covered sectors are Fertilizer, Aluminium, Chlor-alkali, Railways, Cement, Iron and Steel, Pulp and Paper, Textile, Power Generation Plant.

In this mechanism, individual target will be set for the industries by the Government of India to reduce their Specific Energy Consumption (SEC). The target can be achieved over a period of 3 years. The industries can achieve this target by technology transfer, Energy Efficient technology, Research & Development etc. Or any other initiatives.

Those industries that achieve and exceed the target would be issued Energy Saving Certificates (ESCerts) and those industries who could not achieve the target have to either pay penalties or buy the ESCerts from the industries who have secured ESCerts by exceeding the target assigned to them.

The PAT has been divided into 2 Phases, Policy framework and Implementation. Some of the steps involved in PAT are:

1. Collection of Data from the Industries through baseline audit

2. Methodology for setting Specific Consumption targets for Each Industry;

3. Monitoring and Verification for target achieved;

4. Issuance of Energy Saving Certificates (ESCerts);

5. Trading Process for ESCerts;

6. Compliance and reconciliation process for ESCerts;

7. Sharing of Technology of Higher Efficient Industries to other industries

Perform-and-Trade Mechanism utilizes the strength of market allocation to achieve

national energy efficiency objectives. Setting of SEC improvement targets will be

made in such a manner that it takes note of quality of data, plant vintage, technology,

product mix and regulatory directives

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