The Lok Sabha passed a new bill called Energy Conservation Amendment Bill 2022 on August 3, 2022. This bill is an amendment to the Energy Conservation Act, 2001, with provisions to establish regular domestic carbon markets.
This mandates using non-fossil sources, such as biomass, ethanol for energy, green hydrogen, and green ammonia. This bill ensures a faster transition to a low-carbon economy and can strengthen the energy conservation of 2001. The bill’s primary purpose is to shift India to a more energy-efficient future.
Objectives of the bill
There are two main objectives of the energy conversation (amendment) bill 2022.
1. Compulsion
One of the primary objectives of the energy conservation amendment bill is to make it compulsory for a selective group of industrial, commercial, and even residential consumers to use green energy.
A prescribed minimum proportion of energy must come from renewable or non-fossil fuel sources.
2. Carbon market
Another objective of the energy conservation bill is establishing a regular domestic carbon market that facilitates trade in carbon credits.
What are carbon markets?
Carbon markets are one kind of market. These markets allow the trade of carbon credits to reduce carbon emissions. These markets use credit as a reward to those industries contributing towards reducing emissions or those industries that improve energy efficiency.
For example, industries that contribute to energy efficiency gain more credits as an award. The idea of carbon markets is taken from developed countries like Europe, China, and Japan. These ideas were later implemented as a similar scheme that reduces carbon emissions and increases energy efficiency.
This scheme is called the “BEE (Bureau of energy efficiency) Scheme’ or the “PAT Scheme’. Here, PAT stands for Perform, Achieve, and Trade.
What is energy conservation?
Energy conservation is promoting the use of more efficient processes and equipment to save energy. Some efficiency standards for energy conservation are also prescribed for equipment and appliances such as air conditioners or refrigerators.
Ministry of power presented the energy conservation amendment bill 2022 in Lok Sabha. This bill is an amendment to the prior energy conservation act of 2001.
Provisions of the Energy Conservation Act 2001 :
1. Bureau of Energy Efficiency (BEE)
The Energy Conservation Act of 2001 established the Bureau of Energy Efficiency (BEE). This bureau was established to maintain the qualifications to monitor and review the consumption of power by industries.
Under the act, the tenure of the director general of the bureau of energy efficiency was extended from 3 to 5 years in 2010.
2. Issue of certificate
The government of India (GOI) can issue “energy savings certificates” to those industries which contribute to the environment by using less energy. On the other hand, the certificate can also be given to industries that consume more power than the limit to provide a framework.
3. Penalty
Consumers who violate the policy of the government of India will be penalised according to their consumption. Furthermore, through the policy of penalty, any appeal against any order passed by the central or state government will be heard in an appellate tribunal.
Amendments introduced in the bill
- The amendment defines the minimum share of renewable energy consumed by industries or any other unit established. The consumption can be done directly from the sources of renewable energy. On the other hand, it can also be used indirectly through the concept of a power grid.
- The act introduced the promotion of green hydrogen as an alternative to fossil fuels.
- This act will be implemented in the residential area. As it was confined to the industries, The provisions will be applied to the large buildings, which allegedly consume more energy than any other industry.
