Perform Achieve and Trade (PAT) scheme

Perform Achieve and Trade (PAT) scheme

Subject: Government Scheme

Context: The energy markets have become a key facilitator in supporting distribution utilities and industrial consumers to plan, meet and optimise their power consumption in a transparent, competitive, and flexible manner.

Concept:

• Perform Achieve and Trade (PAT) scheme is a market based compliance mechanism to accelerate improvements in energy efficiency in energy intensive industries. The energy savings achieved by notified industries is converted into tradable instruments called Energy Saving Certificates (ESCerts). The ESCerts after issuance by Bureau of Energy Efficiency are traded at Power Exchanges.
• It commenced from 1st April 2012 covering 478 industrial units from 8 sectors namely Aluminium, Cement, Chlor- Alkali, Fertilizer, Iron & Steel, Paper & Pulp, Thermal Power Plant and Textile.
• The scheme aims to reduce specific energy consumption in energy-intensive industries through certification of excess energy saving which can be traded.
• It refers to the calculation of Specific Energy Consumption (SEC) in the baseline year and projected SEC in the target year covering different forms of net energy going into the boundary of the designated consumers’ plant and the products leaving it over a particular cycle
• The Perform, Achieve and Trade (PAT) scheme and the energy saving certificates (ESCerts) are playing a key role in building an efficient industry and eventually a sustainable energy economy. It has been proposed 6 cycles.
• Based on the success of PAT cycle I, the market instrument was further extended to second cycle that includes three more sectors petroleum refinery, railways and electricity distribution utilities besides the earlier eight industry segments.
• The second cycle has far greater potential in terms of net trade, as the scheme is deep as well as wide enough to achieve significant efficiency gains. It has 89 more designated consumers (DCs) from existing sectors and 84 new DCs included from additional industries, adding to a total of 621 industrial consumers across the country.
• The Ministry of Power and Bureau of Energy Efficiency had notied the price of per metric tonne of oil equivalent for DCs of PAT cycle as ₹18,402 for the year 2018-19.
• Besides focus on efficiency, adoption of low carbon renewable technologies for competitive and sustainable energy supply as well as continuous research into other advanced technologies, including green hydrogen, to decarbonise the ‘hard-to-abate’ sectors is the need of hour and sector-specific policy measures are required to march towards carbon neutrality.