The Bureau of Energy Efficiency (BEE) has announced that it will resume the trading of Energy Saving Certificates (ESCerts) from January 17. It was suspended in February last year due to certain administrative issues.

The ESCerts will be under the Perform Achieve and Trade (PAT) mechanism’s second cycle for all the designated consumers, which was notified with effect from April 1, 2016, and was completed on March 31, 2019.

The trading will be scheduled every Tuesday on the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL).

PAT is a market-based mechanism introduced to reduce the specific energy consumption amongst energy-intensive large industries, with an associated market-based mechanism to enhance the cost-effectiveness through certification of excess energy saving which can be traded.

The industries which consume more energy are given higher targets for a specific period spanning a few financial years as compared to those which are more energy efficient.

The mechanism is facilitated through the trading of ESCerts, which are issued to the plants that have exceeded their targets. The plants which do not meet their targets are entitled to purchase these ESCerts.

The PAT program includes designated consumers from energy-intensive sectors like aluminum, cement, Chlor-alkali, fertilizers, iron and steel, paper and pulp, thermal power plants, textile, railways, refineries, and power distribution companies.

Plants that are unable to meet the targets either through their own actions or through the purchase of EScerts are liable to financial penalties under the Energy Conservation Act.

The PAT program was implemented across seven cycles depending on the target period.

For PAT Cycle II, the trading took place very briefly just for two months in October and November 2021, which was then suspended due to administrative issues.

The Central Electricity Regulatory Commission (CERC) acts as the Market regulator for the trading of ESCerts and the BEE as the administrator. Grid Controller of India is appointed as the registry for making the designated consumers eligible entities for trading and book-keeping of ESCerts.

In the recently approved Energy Conservation Act, the government aims to enforce the purchase of energy savings certificates for consumers whose energy consumption exceeds the prescribed norms and standards.

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