PAT Cycle-I: The Beginning of India’s Energy Efficiency Journey
India, one of the world’s fastest-growing economies, is also among the largest energy-consuming countries globally. With a rapidly growing population and expanding industrial sector, the country’s energy needs are projected to increase significantly in the coming years. Recognizing the need for sustainable energy consumption, India launched its first-ever national-level energy efficiency program in 2012 – Perform, Achieve, and Trade (PAT). The program’s first cycle, known as PAT Cycle-I, concluded in 2015, providing important insights into India’s energy efficiency journey.
PAT Cycle-I aimed to improve the energy efficiency of eight energy-intensive sectors: Aluminium, Cement, Chlor-Alkali, Fertilizer, Iron & Steel, Pulp & Paper, Thermal Power Plant, and Textile. The program’s main objective was to achieve a targeted reduction in specific energy consumption (SEC) for each designated consumer (DC) by providing them with financial and regulatory incentives. The financial incentives took the form of Energy Saving Certificates (ESCerts), which could be traded on the exchange. The regulatory incentives involved penalties for non-compliance.
PAT Cycle-I covered a total of 478 DCs, with a combined baseline energy consumption of around 164 million toe. The DCs were given individual SEC reduction targets, based on their baseline energy consumption, production levels, and other parameters. The table above provides some key highlights of PAT Cycle-I.
PAT Cycle-I was a success, with DCs achieving energy savings of 8.67 million toe, exceeding the targeted energy savings of 6.685 million toe by 1.985 million toe. This resulted in a reduction of 31 million tons of CO2eq. DCs who exceeded their targets were issued ESCerts, which could be traded on the exchange. In total, 3.825 million ESCerts were issued to overachievers, and 1.42 million ESCerts were purchased to fulfill the shortfall.
PAT Cycle-I’s success can be attributed to several factors. Firstly, the program’s regulatory framework provided DCs with clear targets and deadlines, ensuring that energy efficiency remained a priority. Secondly, the financial incentives provided by ESCerts encouraged DCs to take energy efficiency seriously. Finally, the program’s monitoring and verification mechanisms ensured that DCs adhered to their targets and reported their energy consumption accurately.
PAT Cycle-I provided a strong foundation for India’s energy efficiency journey. The success of the program demonstrated the potential of financial and regulatory incentives in promoting energy efficiency. Building on the success of PAT Cycle-I, India has launched subsequent cycles of the program, expanding its scope to include more sectors and DCs. Today, India’s energy efficiency journey is a shining example of how a combination of regulatory and financial incentives can drive meaningful change.
summary table of key highlights from PAT Cycle-1:
|Total Number of DCs||No’s||478|
|Baseline Energy Consumption in PAT-Cycle-I||Million TOE||164.97|
|Energy reduction target||Million TOE||6.685|
|Energy savings achieved in PAT-Cycle-I||Million TOE||8.67|
|Energy Savings achieved in excess of target||Million TOE||1.985|
|Reductions in GHG emissions in PAT Cycle-I||Million Tons of CO2 eq.||31|
|ESCerts issued to overachievers||Million EScerts||3.825|
|Purchase compliance of ESCerts for shortfall||Million EScerts||1.42|
|Volume traded in 17 trading session||Million EScerts||1.299|
|Balance ESCerts of PAT Cycle 1||Million EScerts||2.53|