The Energy Conservation (Amendment) Bill, 2022
The Energy Conservation (Amendment) Bill 2022 is a proposed legislation that aims to reduce India’s carbon emissions by promoting the use of renewable energy sources and incentivizing the adoption of clean energy. The Bill seeks to amend the Electricity Conservation Act 2001, last amended in 2010, in order to increase India’s demand for renewable energy and reduce its reliance on fossil fuels.
Current Energy Conservation Act
The Energy Conservation Act, 2001 (amended in 2010) is the current legislation governing the domain of energy conservation in India. The Act gives the Central government the power to specify norms and standards of energy efficiency for appliances, industrial equipment, and buildings with a connected load of over 100 kilo Watts (kW) or a contractual demand of more than 15 kilovolt-amperes (kVA).
The Act established the Bureau of Energy Efficiency, which falls under the Central government and has the power to appoint its own officers and staff. The Bureau can also specify the qualifications required for energy auditors, who monitor and review the power consumption of various industries.
Under the Act, the Central government can issue energy savings certificates to industries that consume less than their maximum allotted energy. These certificates can then be sold to customers who consume more than their maximum allowed energy threshold, creating a framework for energy trading.
The Act also gives the Central government the power to prohibit the manufacture, sale, purchase, or import of any particular equipment unless it conforms to specified norms issued six months or one year before. Violations of the Act can result in a penalty of Rs 10 lakh (approximately $13,500) and an additional penalty of Rs 10,000 (approximately $135) for each day the offense continues. Appeals against orders passed by the Central or state government can be heard by the appellate tribunal established under the Electricity Act, 2003.
Proposed Changes to the Energy Conservation Act
On October 30, 2021, the Power Ministry proposed changes to the Energy Conservation Act in order to enhance the demand for renewable energy at the consumer end for industries, buildings, transport, and other sectors. After four consultation meetings with stakeholders, Union Power Minister R.K. Singh proposed the following amendments to the Act:
- Defining the minimum share of renewable energy to be consumed by industrial units or any establishment, either directly from a renewable energy source or indirectly via the power grid.
- Incentivizing efforts to use clean energy by issuing carbon saving certificates.
- Strengthening institutions set up originally under the Act, such as the Bureau of Energy Efficiency.
- Facilitating the promotion of green hydrogen as an alternative to the fossil fuels used by industries.
- Considering additional incentives such as carbon credits for the use of clean energy to encourage private sector climate action.
- Including larger residential buildings under energy conservation standards to promote sustainable habitats. Currently, only large industries and their buildings fall under the scope of the Act.
The main objective of these proposed amendments is to reduce India’s power consumption from fossil fuels and minimize the country’s carbon footprint. The Central government aims to develop India’s carbon market and boost the adoption of clean technology.
India’s Commitment to the Paris Agreement
India has committed to exceeding its Nationally Determined Contributions (NDCs) under the Paris Agreement, which include reducing the emissions intensity of its GDP by 33 to 35% by 2030. In order to achieve these targets, the Central government has set a goal of increasing the share of non-fossil-based power generation to 40% of the total installed capacity by 2030.
The Energy Conservation (Amendment) Bill is a key part of the Central government’s strategy to meet these climate targets.
Written by princy