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Perform, Achieve and Trade (PAT): An Innovative Mechanism for Enhancing Energy Efficiency in India's Industrial Sector
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On 31st March 2012, India quietly announced a historic regulation for industrial sector in a bid to ensure energy security of the country. The regulation, with an aim to enhance energy efficiency in energy intensive industrial sectors, is empowered by Energy Conservation Act, 2001 of India and National Mission on Enhanced Energy Efficiency (NMEEE) under National Action Plan on Climate Change (NAPCC). The Energy Conservation Act, 2001 which is the first legislative initiative by Govt. of India to give fresh impetus in energy efficiency movement of the country, has the provision of declaring 'Designated Consumers (DC)' in 'Energy Intensive Industries'. The above regulation, under a scheme called Perform, Achieve & Trade (PAT), notified specific energy consumption (SEC) reduction targets for 478 DCs in eight industrial sectors like Cement, Pulp & Paper, Aluminium, Textile, Chlor-Alkali, Iron &Steel, Fertilizer and Thermal Power Plant. Different targets have been assigned to different DCs and to be achieved in a three years time period from the date of notification. The over-performers will be entitled to get energy saving certificates (e-certs) at the end of the compliance period. Similarly, the under-achievers will have to comply the shortfall by purchasing the e-certs in a tradable system or paying the penalty. This market based mechanism is first of its kind in the world.
Garnik, S. P.; Martin, M. (2014). Perform, Achieve and Trade (PAT): An Innovative Mechanism for Enhancing Energy Efficiency in India's Industrial Sector. Energy Systems Laboratory (http://esl.tamu.edu); Texas A&M University (http://www.tamu.edu). Available electronically from