Pre-Bid Conference on BASELINE ENERGY AUDIT under Perform, Achieve & Trade (PAT) Scheme

1. Pre-Bid Conference on BASELINE ENERGY AUDITunderPerform, Achieve & Trade (PAT) Scheme S P Garnaik Energy Economist Bureau of Energy Efficiency, Ministry of Power, GOI

2. NATIONAL MISSION ON ENHANCED ENERGY EFFICIENCY (NMEEE) • The National Action Plan on Climate Change was released by Honorable Prime Minister of India in June 2008 • The Action Plan Outlines 8 Missions including National Mission on Enhanced Energy Efficiency (NMEEE) • The Mission has outlined specific goals

3. Chronology of Events of NMEEE • 30th June 2008 : Hon’able PM releases the National Action Plan of Climate Change • September 2008 : NMEEE endorsed by steering Committee, MoP • 3rd October 2008 : Discussion on Draft outline in PMO • 14th Nov 2008 : First consultation workshop at Mumbai • 24th August 2009 : PM’s council on Climate Change approves NMEEE in principle • 1st December 2009 : EFC recommends the implementation plan of NMEEE to Cabinet with a financial outlay of Rs. 235.35 crores • May 2010 : Cabinet approves the financial outlay • Ammendment to EC Act, 2001 passed in parliament

4. NMEEE – Four New Initiatives NMEEE PAT MTEE EEFP FEEED • Energy Intensive Industries • Targets for Mandatory Energy Saving Energy Efficient Appliances BLY SEEP DSM Stimulate Funding for ESCOs Fiscal Instrument for EE PRGF VCF Public Procurement

5. PAT Scheme : Background & Scope (1) • Covers 685 designated consumers in 9 sectors • All DCs consume about 240 mtoe energy i.e. about 60% of total energy consumption of the country • Targets would be given to all DCs to achieve the same within a time frame • Achievement > Target E-Scerts • Achievement < Target Purchase E-Scerts / Penalty • National Target = 10 mtoe at the end of 1st PAT Cycle ( April 2011 – March 2014)

6. PAT Scheme : Background & Scope (2) • Large band-with in Specific Energy Consumption (As per the BEE sectoral Study) • Energy Usage Pattern is varying extremely due to various diversities • Hence, the targets would be “Plant Specific”

7. PAT Legal Framework • Furnish report of energy consumption to the Designated Authority of the State as well as to BEE (section 14(k)). • Designate or appoint an Energy Manager who will be in-charge of submission of annual energy consumption returns of the Designated Agencies and BEE (section 14 (l)). • Comply with the energy conservation norms and standards prescribed under section 14 (g) of the Act. • Purchase Energy Saving Certificates (ESCerts) for compliance to section 14 (g) in the event of default. The Act has been amended with the addition of new sub-section 14A to enable this and section 14A(2) allows such trading. EScerts are defined by adding a new sub-section 2(ma). • Monitoring and Verification of compliance by Designated Energy Auditors (DENA) which will be prescribed the Government/ BEE under section 14A/13 (p) of the Act. • Excess achievement of the target set would entail issuance of ESCerts under section 14A(1). • Penalty for non-compliance being Rs. 10 lakhs and the value of non-compliance measured in terms of the market value of tones of oil equivalent by inserting a new section 26(1A). • BEE to be the overall regulator and dispute resolution agency and Energy Efficiency Service Ltd. (EESL) to be the process manager.

8. BASELINE ENERGY AUDIT(Methodology of Scope of Work) • Verification of Data Submitted by DCs • Production • All Energy Sources [ Carefully investigate the source of data as the same source will be used during final verification ]

9. BASELINE ENERGY AUDIT(Methodology of Scope of Work) • Define the Plant Boundary (Gate-to-Gate Concept) • Physical Boundary • Process Boundary • Investigate the exclusions like colony power, construction related, internal transportation etc. with the submitted data [ The plant boundary needs to be discussed with Plant Management ]

10. BASELINE ENERGY AUDIT(Methodology of Scope of Work) • Develop Process Flow Diagram • Define sub-processes (Block Diagrams) • Put operating parameters like Temp / Pressure / Flow / mass etc. in the process flow diagram with designed value • Develop the energy balance diagram of each sub-process

13. Each Sub-System to be Studied for… • Brief description of the sub-system • Material Input & Output • Energy (Elect./Thermal) Input & Output • Technical Parameters for Energy Efficiency • Listing of major static and rotating equipments • Technology up-gradation since past years • SEC

14. BASELINE ENERGY AUDIT(Methodology of Scope of Work) • Find out major energy consuming equipments in each sub-system • Investigate the technology • List out critical parameters which affect the efficiency and energy consumption • Operating vs. Designed value [ Measurements may be required at this stage. However, past energy audit reports, performance assessment reports may be referred to ]

15. BASELINE ENERGY AUDIT(Methodology of Scope of Work) • Example : Pot-line of an Aluminium Smelter Technology : Pre-Bake Parameters : Pot capacity Pot voltage Current Density ACD Anode Effect Factor

16. BASELINE ENERGY AUDIT(Methodology of Scope of Work) • Investigate All options related to • Waste Heat Recovery • Co-Generation • Fuel Switch • Use of EE equipment / System [ Detail discussion with management required at this stage ]

17. BASELINE ENERGY AUDIT(Methodology of Scope of Work) • Review the Past Energy efficiency Measures • Review the Future Energy Efficiency Approach/Strategy • Detail discussion with plant management required • Preparation of Audit Report • Potential evaluation with tentative cost-benefit analysis

18. Thanks …. For further information Please Contact S.P.Garnaik Energy Economist Bureau of Energy Efficiency Ministry of Power, GOI 4th Floor, Sewa Bhawan, R.K.Puram NEW DELHI – 110066 Ph.: 011-26179699 Fax :26178352 Email : sgarnaik@beenet.in

19. Mission Goals • Market-based approaches to unlock energy efficiency opportunities, estimated to be about Rs. 74,000 Crores • By 2014-15: • Annual fuel savings in excess of 23 million toe • Cumulative avoided electricity capacity addition of 19,000 MW • CO2 emission mitigation of 98 million tons per year

20. The PAT Scheme • The market based mechanism to enhance the cost effectiveness in improving the Energy Efficiency in Energy Intensive industries through certification of energy saving which can be traded

21. Market Transformation for Energy Efficiency (MTEE) • Accelerating the shift to energy efficient appliances in designated sectors through innovative measures to make the products more affordable.

22. Energy Efficiency Financing Platform (EEFP) • Creation of mechanisms that would help finance demand side management programmes in all sectors by capturing future energy savings.

23. Framework for Energy Efficient Economic Development (FEEED) • Developing fiscal instruments to promote energy efficiency

24. List of DCs

25. State-wise DCs (2009-10)

26. Estimated Energy Consumption in DCs About 55% of DCs Contribute 96% of Total Consumption About 45% of DCs contribute rest 4% of Total Consumption Railways : 9.8 MTOE additional

27. Target in PAT Target is defined as the % reduction of ‘Specific Energy Consumption (SEC)’ from Baseline value. Plant System Boundary All forms of Energy Product E P SEC SEC = E / P Baseline SEC Reduction in SEC Target SEC Expressed in % Y1 Y2 Y3

29. Sectoral studies by BEE on ‘Setting Up of Sectoral Bandwidth for DCs’ have revealed the impact on SEC due to above diversities

30. Reasons for Large Energy Usage Bandwidth • The energy usage pattern varies widely in industries of a particular sector due to various diversities like • Scale of Production (Installed Capacities) • - Use of Raw Material • - Process Technology • - Vintage • - O & M Practices • - Type of Product Output etc.

31. Approach for Setting Targets Depends upon the Objective of the Scheme Total Saving Objective = 10 mMTOE • Setting Sector Targets based on available saving potential of Industries and Program Objectives

32. Example : Baseline Estimation

33. Example : Target Setting (1)

34. Example : Target Setting (2)

35. Number of Clusters depend upon the Bandwidth of Baseline SEC Cluster 2 Cluster 1

36. THE PAT SCHEME ….. Approach INDUSTRY (DC) Review of Present Energy Scenario & Bandwidth (Completed) Development of Baseline Formats with System Boundaries Data Collection, Compilation & Analysis Verification of Data Establish Baseline Set Targets for SEC Reduction Technology Transfer, EE Technology, R&M, R&D Verification Protocol Achieve the Target Trade the higher achieved saving through E-Certs

37. Baseline & Target Setting Designated Consumer Baseline Format Design Prepare PAT Assessment Document (PAD) Issue of e-Certs after successful M&V Finanalization of DC List Getting Information Through Base Line Format BEE Getting information through “Form#1” Data Compilation/ Evaluation Verification of PAD through DENA Recommendation for e-certification Target Setting [Declaration of Base Year, Target Year ] Validation of PAD through DENA Activity Flow Sheet

38. Target Setting for Power Station

39. Legal Framework • Furnish report of energy consumption to the Designated Authority of the State as well as to BEE (section 14(k)). • Designate or appoint an Energy Manager who will be in-charge of submission of annual energy consumption returns of the Designated Agencies and BEE (section 14 (l)). • Comply with the energy conservation norms and standards prescribed under section 14 (g) of the Act. • Purchase Energy Saving Certificates (ESCerts) for compliance to section 14 (g) in the event of default. The Act has been amended with the addition of new sub-section 14A to enable this and section 14A(2) allows such trading. EScerts are defined by adding a new sub-section 2(ma). • Monitoring and Verification of compliance by Designated Energy Auditors (DENA) which will be prescribed the Government/ BEE under section 14A/13 (p) of the Act. • Excess achievement of the target set would entail issuance of ESCerts under section 14A(1). • Penalty for non-compliance being Rs. 10 lakhs and the value of non-compliance measured in terms of the market value of tones of oil equivalent by inserting a new section 26(1A). • BEE to be the overall regulator and dispute resolution agency and Energy Efficiency Service Ltd. (EESL) to be the process manager.