National Mission for
Enhanced Energy Efficiency
NATIONAL MISSION ON
ENHANCED ENERGY EFFICIENCY (NMEEE)
 The National Action Plan on Climate Change was
released by Honorable Prime Minister of India in
June 2008
 The Action Plan Outlines 8 Missions including
National Mission on Enhanced Energy Efficiency
(NMEEE)
Mission Goals
 Market-based approaches to unlock energy
efficiency opportunities, estimated to be
about Rs. 74,000 Crores
 By 2014-15:
• Annual fuel savings in excess of 23 million toe
• Cumulative avoided electricity capacity addition of
19,000 MW
• CO2 emission mitigation of 98 million tons per year
NMEEE – Four New Initiatives
Para 4.2 of the National Action Plan on Climate Change mandates:
 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. (Perform Achieve and Trade)
 Accelerating the shift to energy efficient appliances in
designated sectors through innovative measures to make the
products more affordable. (Market Transformation for
Energy Efficiency)
 Creation of mechanisms that would help finance demand side
management programmes in all sectors by capturing future
energy savings. (Energy Efficiency Financing Platform)
 Developing fiscal instruments to promote energy efficiency
(Framework for Energy Efficient Economic Development)
Mission Document Preparation Process
 Broadbased steering committee, with representation
from various Ministries, CII, FICCI, NGOs, and academia
• Two working groups prepared detailed approach papers
• Consolidated approach paper put on BEE website for comments
• NGO (Prayas Energy) organized public discussion on approach
paper in Mumbai
• Comments taken into account by subcommittees while finalizing
mission document
• Working group reports synthesized into draft Mission Document
 Review by Ministries; discussion in PMO; Document
finalized after incorporating comments
Perform, Achieve & Trade (PAT) Mechanism
(The market based mechanism through cost effectiveness approach
for improving energy efficiency in energy intensive sectors)
Methodology:
 Specific Energy Consumption (SEC)
reduction targets for the 685 energyintensive units which are designated
consumers under the Energy Conservation
Act
• Targets would be % reduction of current SEC
• Percentage reduction requirement based on:
- Sectoral targets to achieve the national
goal
- Current SEC as a ratio of the best in the
sector / groups within a sector
- Unit specific diversities (Next Slide)
• Target setting for the power generation and
fertilizer sectors through the existing tariffsetting processes
• SEC measurement and verification by BEE
through designated verifiers
Sector
No. of Identified
DCs
Aluminum
11
Cement
92
Chlor-Alkali
21
Fertilizer
22
Pulp & Paper
70
Power
154
Iron & Steel
110
Textiles
197
Railways
8
PAT : Large Energy Usage Bandwidth
The energy usage pattern varies widely in industries of a
particular sector due to various diversities like
-Scale of Production (Installed Capacities)
-Use of Raw Material
- Process Technology
- Vintage of Technology
- O & M Practices
- Type of Product Output etc.
a)
a)
a)
a)
a)
a)
Factors of Diversity
Raw Material Input
Quality of Raw Material / Fuel
Process & Technology
Final Product output
Vintage
Capacity Utililization
Most Affected Sectors
Pulp & Paper, Fertilizer, Power Plant, Textile
All sectors
Aluminium, Iron & steel, Chlor-Alkali, Paper
Textile, Iron & Steel, Aluminium
All Sectors
All sectors
Approach for Setting Targets Depends upon the
Objective of the Scheme
 Total Saving Objective = 10 mMTOE
Sector
SN
1
Power (Thermal)
2
Energy
Consumption
Share of
Consumption
(mMTOE)
(%)
Apportioned
Energy
reduction
(mMTOE)
No. of
identified DCs
Reduction Target as a
% of Total Energy
Consumption
(%)
160.30
66.64%
6.66
154
4.15
Iron & Steel
36.08
15.00%
1.50
110
4.16
3
Cement
14.47
6.02%
0.60
92
4.15
4
Fertilizers
11.95
4.97%
0.50
22
4.18
5
Railways (Approximated)
9.00
3.74%
0.37
8
4.11
6
Textile (Approximated)
4.50
1.87%
0.19
197
4.22
7
Aluminium
2.42
1.01%
0.10
11
4.13
8
Paper & pulp
1.38
0.57%
0.06
70
4.13
9
Chlor-Alkali
0.43
0.18%
0.02
21
4.19
240.53
100.00%
685
4.16
Total
About 60% of total energy consumption of India
10.00
PAT - Setting Energy Consumption
Norms
 Not feasible to define a single norm/standard unless
there is significant homogeneity amongst units in a
sector
 Energy efficiency improvement targets would have to
be almost “unit specific”
 Bands of differential targets to be created within
each sector
 Each DC mandated to reduce its SEC by a fixed
percentage, based on its current SEC within the
sectoral bandwidth
PAT - Energy Savings Certificates will
incentivize actions
 Energy Savings Certificates (ESCerts) issued to units where
energy-efficiency improvements is in excess of targets
 EScerts can be traded and used for compliance purposes
 Trading can be carried out bilaterally or on special platforms
created on the power exchanges
 ESCerts will be maintained in the DEMAT form and each
ESCert will be equivalent to 1 Metric Tonne of Oil Equivalent
(MTOE)
PAT – Stakeholders for Energy Savings
Certificates
 The regulator in consultation with all the participants, agencies
and central government is the body responsible for promotion
of the ESCerts market mechanism
 The key agencies/ stakeholders in the trading mechanism for
ESCerts will include
•
•
•
•
•
•
Scheme regulator and administrator
Central Registry
Designated Energy Auditors
State Designated Agencies
Designated Consumers
Power Exchanges
 PAT mechanism would require amendments to the Energy
Conservation Act
• Designated consumers to be able to show compliance through
procurement of ESCerts
• Financial penalty for non compliance to be linked to quantum of non
compliance
PAT – current status
 Historical data of last five years on production and
energy consumption by various energy sources are
being collected from 685 DCs
 Baseline SEC of each DC will be established by December
2010
 The studies for fixing of targets in all 9 industrial sectors
are underway and will be completed by March 2011
 Baseline Energy Audit of each DC initiated
 The protocols for trading, monitoring and verification will
be set up by March 2011
 Amendments to EC Act passed by both houses of
Parliment
Market Transformation for Energy
Efficiency (MTEE)
 Leveraging international funds for promoting energy
efficiency
• Project preparation to utilise bi-lateral/multilateral funds for
energy efficiency
 Implementing a National Energy-Efficiency CDM Roadmap
• Public sector leadership and involvement for aggregation of
projects
• Programmes of Activity for Household lighting, Municipal DSM
(Mu DSM), Agriculture DSM (Ag DSM), SME sector,
Commercial Buildings sector and Distribution Transformers.
• Preparation of new CDM Methodologies
MTEEE – current status
 The Programme of Activities (PoA) to leverage CDM for
agriculture and municipal sectors under development
 The Bachat Lamp Yojana registered at UNFCCC on the 29th
April 2010. Two Crore CFL’s have already been distributed
and 13 TPA’s have been signed between BEE investors and
DISCOMs
 CDM Road map is under development and to be issued
shortly
 New Program – Super efficient equipment programme
Energy Efficiency Financing Platform
(EEFP)
 Ensuring availability of finance at reasonable rates for
energy efficiency project implementation- Expansion of EEFP
to include other FIs and public and private sector banks
 Create demand for energy efficiency products, goods and
services- awareness, public policy, facilitation/ stimulation by
preparation of bankable projects and markets
 Promotion of ESCOs – accreditation by CRISIL/ ICRA
 Credible monitoring and verification protocols to capture
energy savings
 Capacity building of banks and FIs
EEFP – current status
 Energy Efficiency Services Ltd. (EESL) has been created as
a corporate entity to provide market leadership
 70 ESCOs have been rated
 Investment-grade energy audits being prepared for
government buildings, municipalities, and SMEs
 PTC India Ltd has commenced financing of ESCO based
projects at Rashtrapati Bhavan, ESIC hospitals, AIIMS, and
municipalities
 SIDBI has initiated exercise for financing projects in SMEs
Framework for Energy-Efficient Economic
Development (FEED)
 Providing comfort to lenders by provision of
• Risk guarantee for performance contract Partial Risk Guarantee
Fund (PRGF)
• Venture Capital Fund for Energy Efficiency (VCFEE)
• Initial seed capital from Government budget-can be expanded
by contributions from other agencies as well.
• Fund can be managed by the financial intermediaries
 Incentives to Central Public Sector Undertakings (CPSUs) to
take up energy efficiency
• Policy guidance to CPSUs to take up energy efficiency projectspecial parameter (to be called Energy Efficiency Performance
Index (EEPI) on the line of KPI) may be added to the MoU
guidelines from 2010-11
• Promoting Energy Efficient Public Procurement
Framework for Energy-Efficient Economic
Development (FEED) (2)
 Support and Assistance to Electricity Regulatory Commissions
for stimulating Utility driven Demand Side Management (DSM)
• Develop a mechanism to incentivise utilities for DSM including
Time of Day tariffs, load management directives, etc.
• Develop guidelines for evaluating DSM options and integrating
DSM options with supply side options.
• DSM plan, design, preparation, period, load research, consumer
surveys, cost-benefit assessment, technology assessments, etc.
• Evolve suitable monitoring and verification protocols for DSM
programmes.
 Tax/ Duty Exemptions for Promotion of Energy Efficiency
• Graded excise duty for STAR labelled equipments in favour of
higher efficiencies
• Income and Corporate tax incentives for ESCOs/ Venture Capital
funds, etc. in energy efficiency
• Providing infrastructure status to ESCO business
FEED – current status
 Guidelines for procurement of energy efficient
appliances and services by public authorities under
consideration of Government
 To enhance energy efficiency measures at utility level,
BEE is working with the DSM Working Group of the
Forum of Regulators (FOR) to overcome regulatory
barriers and enable utilities to undertake DSM. Draft
report has been prepared and is to be discussed by
FOR
Overall investment in NMEEE and the
Expected Impact
S.No
Initiative
Investment
Estimated
(Rs. crores)
Fuel Saving
(Million tons
of oil
equivalent)
GHG
Emissions
saving
(million
tons)
Avoided
Capacity
(MW)
1
PAT
30,603
9.78
26.21
5623
2
DSM
44,000
13.22
72.75
14335
Total
74,603
23.00
98.96
19,958
Thanks ….