The Energy Conservation (Amendment) Bill 2022

• 04 Aug 2022

For Prelims: Electricity Conservation Act 2001, Bureau of Energy Efficiency, Green Hydrogen, Carbon Credits, Battery Swapping Policy, Green Bonds, UPSC CSE PYQ

For Mains: The Energy Conservation (Amendment) Bill 2022 and its Objectives

Why in News?

Recently, the Ministry of Power has tabled the Energy Conservation (Amendment) Bill 2022 in Lok Sabha.

• The Bill proposes to amend the Energy Conservation Act 2001, last amended in 2010, to introduce changes such as incentivising the use of clean energy by issuing carbon saving certificates.

What are the Provisions of the Energy Conservation Act 2001?

• Energy Efficiency Norms:
  • Empowers the Centre to specify norms and standards of energy efficiency for appliances, industrial equipment and buildings with a connected load over 100 kiloWatts (kW) or a contractual demand of more than 120 kilovolt-amperes (kVA).
• Bureau of Energy Efficiency:
  • The Act established the Bureau of Energy Efficiency (BEE).
    • The 2010 amendment extended the tenure of the Director General of the Bureau of Energy Efficiency from three to five years.
  • This Bureau can specify qualifications required for energy auditors who monitor and review the power consumption of various industries.
• Energy Trading:
  • The Government can issue energy savings certificates to those industries which consume less than their maximum allotted energy.
  • However, this certificate can be sold to customers who consume higher than their maximum allowed energy threshold – providing for a framework for energy trading.
• Prohibition until Conforms Specified Norms:
  • The Act allows the Centre to prohibit the manufacture, sale, purchase or import of any particular equipment unless it conforms to specified norms issued six months/ one year before.
• Penalty:
  • Consumers who utilise excess energy will be penalized according to their excess consumption.
  • Any appeals against any such order passed by the Central or state government will be heard by the appellate tribunal already established under the Electricity Act, 2003.

What are the Proposed Changes in the Act?

• Share of renewable Energy:
  • Defining the minimum share of renewable energy to be consumed by industrial units or any establishment.
  • This consumption may be done directly from a renewable energy source or indirectly via the power grid.
• Incentivising for Clean Energy:
  • Incentivising efforts to use clean energy by issuing carbon saving certificates.
  • Considering additional incentives like carbon credits for the use of clean energy to lure the private sector to climate action.
• Strengthening Related Institutions:
  • Strengthening institutions set up originally under the Act, such as the Bureau of Energy Efficiency.
• Promoting Green Hydrogen:
  • Facilitating the promotion of Green Hydrogen as an alternative to the fossil fuels used by industries
• Applicability to Residential Buildings:
  
  • Including larger residential buildings under energy conservation standards to promote sustainable habitats.
  • Currently, only large industries and their buildings come under the ambit of the Act.

What are the Objectives of the Proposed Amendments?

• To reduce India’s power consumption via fossil fuels and thereby minimize the nation’s carbon footprint.
• To develop India’s Carbon market and boost the adoption of clean technology.
• To meet its Nationally Determined Contributions (NDCs), as mentioned in the Paris Climate Agreement, before its 2030 target date.

What are India’s climate change commitments?

• India has committed to reducing the carbon intensity of its economy by 33-35 % by 2030 from its 2005 levels as part of its NDCs under the Paris Climate Agreement.
• India has also promised to achieve over 40% of its power generation from non-fossil-fuel energy resources by 2030.
• In a bid to reduce its CO₂ emissions to 550 metric tonnes (Mt) by 2030, India has committed to creating an additional carbon sink for 2.5 -3 billion tonnes of CO₂ by increasing its tree and forest cover.
• India revised NDCs at the COP26 Summit held in Glasgow in November, 2021. India’s five new climate targets are:
  • To increase its non-fossil energy capacity to 500 GW by 2030
  • To meet 50 % of India’s power demand via renewable energy sources
  • To reduce the carbon intensity of the Indian economy by 45 %.
  • To reduce India’s total projected carbon emissions by one billion tonnes from 2021 to 2030
  • To achieve a target net zero (for carbon emissions) by 2070.

What are the Measures to reduce India’s Carbon Footprints?

• Domestic Solar Manufacturing:
  • In Budget 2022-23, the government Allocated Rs 19,500 crores to facilitate domestic solar manufacturing in India.
• Biomass Cofiring:
  • Use of 5-7 % biomass pellets for co-firing in thermal power plants.
• Blending of Fuel:
  • To promote blending of fuel, an additional differential excise duty of Rs 2/litre to be levied on unblended fuel.
• Battery Swapping Policy:
  • To achieve clean transport, a new battery swapping policy to be formulated for electric vehicles
• Green Bonds:
  • Issue ‘Green Bonds’ — fixed-income financial methods to fund projects with positive environmental effects — to raise capital for green infrastructure. Such sovereign green bonds can be used in climate adaptation projects which lack private funding.

Source: TH