ENERGY CONSERVATION (AMENDMENT) BILL, 2022 – GOVERNANCE
News: Government
introduces Energy Conservation Bill in Rajya Sabha
What's in the news?
● Minister
of New and Renewable Energy R.K.Singh introduced the Energy Conservation
(Amendment) Bill in Rajya Sabha on December 8.
● The
Minister stated that the non-fossil fuel
capacity was 42% of the total energy generation and in order to address the
transition, the bill had been brought.
Key takeaways:
● The
Bill amends the Energy Conservation Act, 2001 to empower the central government
to specify a carbon credit trading
scheme.
● Designated
consumers may be required to meet a proportion of their energy needs from
non-fossil sources.
● The
Energy Conservation Code for buildings
will also apply to office and residential buildings with a connected load of
100 kilowatt or above.
● Energy
consumption standards may be specified for vehicles
and ships.
Energy Conservation Act, 2001:
● The
Energy Conservation Act, 2001 provides a framework for regulating energy
consumption and promoting energy
efficiency and energy conservation.
○ Energy
efficiency means using less energy to perform the same task.
● The
Act has set up the Bureau of Energy
Efficiency to recommend regulations and standards for energy
consumption.
○ These
apply to appliances, vehicles, industrial and commercial establishments and
buildings.
● Efforts
towards energy conservation and efficiency gains are among the key instruments
envisaged for climate change
mitigation.
○ Efforts
on these fronts lower the energy generation requirement, and thereby reduce greenhouse gas emissions.
● Energy
efficiency and conservation also have positive implications for energy security
in a country like India, which relies on imports to meet some of its energy
needs.
○ As
per an estimate by the Bureau, programs for efficient energy use have helped
India save about 28 million tonnes of
oil equivalent energy in 2019-20.
Commitments of India:
● During
the COP-26 summit in 2021, India
made the following commitments which may be relevant for energy efficiency
efforts such as
a. Reducing
total projected carbon emissions by
one billion tonnes by 2030.
b. Reducing
the carbon intensity of the economy
by 45% by 2030 over 2005 levels. [Carbon intensity is defined as the volume of
carbon emissions per unit of GDP].
c. In
addition, India aims to have 500 GW of non-fossil
energy capacity and meet 50% of its energy requirements from renewable
energy by 2030.
Energy Conservation (Amendment) Bill, 2022:
● The
Bill seeks to amend the 2001 Act
○ To
facilitate the achievement of COP-26 goals.
○ Introduce
concepts such as mandated use of non-fossil sources and carbon credit trading
to ensure faster decarbonization of the Indian economy.
Key features of the Bill:
1. Carbon credit trading:
● The
Bill empowers the central government to specify a carbon credit trading
scheme.
● Carbon
credit implies a tradeable permit to produce a specified amount of carbon
dioxide or other greenhouse emissions.
● The
central government or any authorized agency may issue carbon credit
certificates to entities registered and compliant with the scheme.
○ The
entities will be entitled to trade the certificates.
○ Any
other person may also purchase a carbon credit certificate on a voluntary
basis.
2. Obligation to use non-fossil sources of energy:
● The
Act empowers the central government to specify energy consumption
standards.
● The
Bill adds that the government may require designated consumers to meet a
minimum share of energy consumption from non-fossil sources.
● Different
consumption thresholds may be specified for different non-fossil sources and
consumer categories.
● Designated consumers include
○ Industries
such as mining, steel, cement, textile, chemicals, and petrochemicals.
○ Transport sector
including Railways.
○ Commercial buildings,
as specified in the schedule.
● Failure
to meet this obligation will be punishable with a penalty of up to Rs.10 lakh.
It will also attract an additional penalty of up to twice the price of oil
equivalent of energy consumed above the prescribed norm.
3. Energy conservation code for buildings:
● The
Act empowers the central government to specify Energy Conservation Code for
buildings.
● The
code prescribes energy consumption
standards in terms of area.
● The
Bill amends this to provide for an ‘Energy
Conservation and Sustainable Building Code’.
● This
new code will provide norms for energy efficiency and conservation, use of
renewable energy, and other requirements for green buildings.
4. Standards for vehicles and vessels:
● Under
the Act, the energy consumption standards may be specified for equipment and
appliances which consume, generate, transmit, or supply energy.
● The
Bill expands the scope to include
vehicles (as defined under the Motor Vehicles Act, 1988), and vessels (includes
ships and boats).
● The
failure to comply with standards will be punishable with a penalty of up to Rs
10 lakh. Non-compliance in case of vessels will attract an additional penalty
of up to twice the price of oil equivalent of energy consumed above the
prescribed norm. Vehicle manufacturers in violation of fuel consumption norms
will be liable to pay a penalty of up to Rs 50,000 per unit of vehicles sold.
5. Composition of the governing council of BEE:
● The
Act provides for the setting up of the Bureau of Energy Efficiency (BEE).
● The
Bureau has a governing council with members between 20 and 26 in number. These
includes
○ Secretaries
of six departments
○ Representatives
of regulatory authorities such as the Central Electricity Authority, and the
Bureau of Indian Standards and
○ Up
to four members representing industries and consumers.
● The
Bill amends this to provide that the number of members will be between 31 and
37. It increases the number of secretaries to 12. It also provides for up to
seven members representing industries and consumers.