GS Paper 3
Syllabus: Infrastructure: Energy, Ports, Roads, Airports, Railways etc
Context: The Union Minister of Power introduced the Energy Conservation (Amendment) Bill 2022 in Rajya Sabha.
- The bill seeks to amend the Electricity Conservation Act 2001 to include changes such as incentivising the use of clean energy through the issuance of carbon saving certificates.
- The Electricity Conservation Act 2001 –
- Specify norms and standards of energy efficiency for appliances, industrial equipment and buildings.
- Prohibit the manufacture/ sale/ purchase of equipment unless it conforms to specified norms.
- Established the Bureau of Energy Efficiency (BEE).
- Empowers the Centre to issue energy savings certificates providing for a framework for energy trading – given to industries that consume less and can be sold to industries that consume more.
- Violators attract a penalty of Rs 10 lakh and consumers will be penalised as per their excess consumption.
- Appeals will be heard by the appellate tribunal established under the Electricity Act, 2003.
Need to amend the above Act:
- To consolidate on the current Act’s success. According to BEE, measures for efficient energy use saved approx. 28 million tonnes of oil equivalent energy in 2019-20.
- To facilitate the achievement of COP-26 goals to ensure faster decarbonisation of the Indian economy.
Key features of the Energy Conservation (Amendment) Bill 2022:
- Carbon credit trading scheme: Carbon credit implies a tradable permit to produce a specified amount of CO2 or other GHG emissions.
- The central government/ authorised agency may issue tradable carbon credit certificates to entities compliant with the scheme.
- Obligation to use non-fossil sources of energy: Designated consumers (such as industries) may be asked to meet a minimum share of energy consumption from non-fossil sources.
- New Energy Conservation and Sustainable Building Code: Unlike the old code, this will also apply to the office and residential buildings with consumption above a threshold.
- Standards for vehicles and vessels: Apart from equipment and appliances, the Bill expands the scope to include vehicles and vessels (ships, boats).
- Strengthening BEE: By changing the composition of its governing council including representatives of industries and consumers.
- Promoting green hydrogen: As an alternative to the fossil fuels used by industries.
- Penal provisions: Failure to comply with standards will be punishable with a penalty of up to Rs 10 lakh.
Main objectives of the Bill:
- Its goal is to reduce GHG emissions and combat climate change.
- To expand India’s carbon market and promote the use of clean technology.
- To achieve its Nationally Determined Contributions (NDCs), as outlined in the Paris Climate Agreement, by 2030.
Key issues that need to be addressed:
- Appropriate Ministry to regulate the carbon credit trading scheme: The Ministry of Power/ the Ministry of Environment?
- There is no clarity on whether renewable energy, energy savings and carbon credit trading schemes involve the same or different activities.
- Meeting non-fossil energy use obligations may adversely impact the competitiveness of the industry.
Q. Evaluate the role that the Energy Conservation (Amendment) Bill, 2022 can play in ensuring greater use of renewable energy and enforcing penalties on industrial polluters for carbon emissions. (250 words)