Companies in eight industry sectors including thermal power and fertilisers will have to invest about Rs 30,000 crore to save 10 million tonnes of oil equivalent in next three years, power secretary P Uma Shankar said on Thursday.
Government has notified eight industrial sectors — cement, pulp and paper, textiles, chlor-alkali, iron and steel and aluminium. The designated sectors will have to comply with energy efficiency norms being drafted by the government. Industrial units found consuming more energy than designated would be penalised, Shankar said.
Companies in these eight sectors may have to shell Rs 10 lakh for non-compliance. Investment by the companies is likely to result in savings of about Rs 30,000 crore annually, after the completion of three years of the scheme. “Companies can save about Rs 20,000 to 30,000 crore every year after three years,” Shankar said.
The notified industries would have options of either increasing efficiency levels or buying energy saving certificates (ESCerts) on lines of carbon credits. The government would issue tradable ESCerts to those who are able to achieve the set targets. Those who consume beyond their set limits will buy certificates or pay penalty. However, the targets do not intend to put any overall cap on energy consumption.
Most Western countries including US, UK and those in Europe have already started using ESCerts or white certificates as a measure of energy conservation. The white tags concept is similar to the United Nations carbon credits programme. A similar model to issue green tags or renewable energy certificates to promote renewable sources of energy in India is in the works.
In India, the white tags programmes is part of national mission on enhanced energy efficiency, one of the eight missions of prime minister’s national action plan on climate change. The programme is aimed at encouraging industries to shift investments towards cost-effective energy efficiency opportunities.
EScerts will be traded on designated power exchanges — India Electricity Exchange and Power Exchange of India. The price of ESCerts will be market determined through their trading on the exchanges. One certificate will be valued at one tonne oil equivalent.
“Power exchange would create a platform and the prices would be market driven. Trading would take about six months to one year from the date of start (April 1, 2011),” Bureau of Energy Efficiency director general Ajay Mathur said.
The target for units in a sector would be based on deviation from the best in the sector. The targets would be set for three years.
