Explained | The Energy Conservation (Amendment) Bill 2022

Source: The post is based on the article “Explained | The Energy Conservation (Amendment) Bill 2022” published in The Hindu on 2nd August 2022.

What is the News?

To meet India’s commitment to exceeding its Paris Agreement climate targets, the Government of India plans to table the Energy Conservation (Amendment) Bill 2022 in the ongoing Monsoon session of Parliament.

The Bill proposes to amend the Energy Conservation Act 2001 last amended in 2010.

What is the Energy Conservation Act 2001?

Energy Conservation Act, 2001 was enacted to provide for efficient use of energy and its conservation and for matters connected therewith.

Key Provisions of the Act

Norms for energy efficiency: The Act empowers the Centre to specify norms and standards of energy efficiency for appliances, industrial equipment and buildings with a connected load over 100 kiloWatts (kW) or a contractual demand of more than 15 kilovolt-amperes (kVA).

BEE: The Act established the Bureau of Energy Efficiency(BEE). The 2010 amendment extended the tenure of the Director General of the Bureau of Energy Efficiency from three to five years. This Bureau can specify qualifications required for energy auditors who monitor and review the power consumption of various industries.

Energy Saving Certificates: The Centre can issue energy savings certificates to those industries which consume less than their maximum allotted energy. However, this certificate can be sold to customers who consume higher than their maximum allowed energy threshold – providing for a framework for energy trading.

The Act allows the Centre to prohibit the manufacture, sale, purchase or import of any particular equipment unless it conforms to specified norms issued six months/ one year before.

Penalty: In case of any violations under this Act, each offence shall attract a penalty of Rs ten lakh with an additional penalty of Rs 10,000 for each day the offence continues.

Appeals: Any appeals against any such order passed by the Central or state government will be heard by the appellate tribunal already established under the Electricity Act, 2003.

What are the proposed changes to the act?

The Ministry of Power has proposed the following changes to the act:

1. Defining the minimum share of renewable energy to be consumed by industrial units or any establishment. This consumption may be done directly from a renewable energy source or indirectly via the power grid.

2. Incentivising efforts to use clean energy by issuing carbon saving certificates.

3. Strengthening institutions set up originally under the Act, such as the Bureau of Energy Efficiency.

4. Facilitating the promotion of green Hydrogen as an alternative to the fossil fuels used by industries.

5. Considering additional incentives like carbon credits for the use of clean energy to lure the private sector to climate action.

6. Including larger residential buildings under energy conservation standards to promote sustainable habitats. Currently, only large industries and their buildings come under the ambit of the Act.