Perform Achieve & Trade

PUNE

Amendments in PAT Rules

16th

Oct 2015

Cycle II The Next Step Forward

S Vikash Ranjan
Technical Expert
BEE

Energy Conservation Rules 2012

(PAT Rules)

Energy Conservation Rules, 2012

In exercise of powers conferred under the Energy Conservation Act,
2001 (52 of 2001), the Central Government has made the following
rules, namely :Energy Conservation (Energy Consumption Norms and Standards for
Designated Consumers, Form, Time within which, and Manner of
Preparation and Implementation of Scheme, Procedure for Issue of
Energy Savings Certificate and Value of Per Metric Tonne of Oil
Equivalent of Energy Consumed) Rules, 2012

Energy Conservation Rules, 2012

These Rules define
The procedure for establishment of energy consumption norms and standards and
specify such norms and standards for Designated Consumers (Rule 3 & 4)
Scheme for preparation and implementation of efficient use of energy and its
conservation. (Rule 5)
Assessment of Performance by the Designated Consumers with reference to the energy
Consumption Norms and Standards specified for them (Rule 6)
Procedure for Assessment of performance through Monitoring & Verification (M&V) and
Check verification by Empaneled Accredited Energy Auditor (Rule 7 & 8)
The Procedure regarding compliance with energy consumption Norms and Standards
and for issue of ESCerts . (Rule 9 , 11,12 &13)

Energy Conservation Rules, 2012

These Rules define
Roles and responsibilities of various stake holders (Rule 10 & 15)
Establishment of new Baseline for the next PAT Cycle (Rule 14).
The procedure for notifying the price of one tonne of oil equivalent (toe)
for purposes of penalty (Rule 16).
The reporting and verification format for compliance with Energy
Consumption Norms and Standards (Form A, Form B, Form C and Form
D).
The procedure and formulae for Normalization (Schedule I & II)
The timelines for various activities under Perform, Achieve and Trade

Reasons for Proposed amendments in Energy

Conservation Rules, 2012
Based on implementation experience during PAT Cycle I, and on inputs from sector
technical committees and through wide consultation with DCs and concerned stake
holders, the need was felt to amend certain provisions of the aforesaid rules with
an objective to:
Provide clarity and better understanding
Remove the ambiguity
Maintain consistency
Amendments have been proposed for Insertion of new provisions
Omission of existing provisions
Modification in provisions of aforesaid rules

Summary of Proposed amendment in Energy Conservation Rules,

2012
Insertion of New Provisions
Sr No

Rules

Sub Rule/
Clause

Addition

Remarks

#1

Rule 2

after clause (a),

Definition of Accredited Energy

Auditor

AEA carries out verification. Definition needed

#2

Rule 2

after clause (a),

Definition of compliance period

To define the Validity of ESCerts. Definition

needed

#3

Rule 2

after clause (a),

Definition of Normalisation

The insertion of this definition was suggested

by Ministry of Law while vetting the EC Rules,
2007 on the ground that the term
normalisation appears repeatedly in EC Rules,
2012

#4

Rule 2

after clause (d),

Definition of CERC is listed

CERC regulates Exchanges for ESCerts trading.

Definition needed

#5

Rule 4

clause (b(iii)) of
Sub Rule (1)

Clarification
Connection

on

Grid

Necessary to differentiate between

Connection and Grid Synchronisation

Grid

Summary of Proposed amendment in Energy Conservation Rules,

2012

Insertion of New Provisions

Sr
No

Rules

Sub
Clause

#6

Rule 8

#7

Rule/

Addition

Remarks

Sub-rule (2)

Inspection of Check Verification

Supervision

Under Act, and as provided for, in Inspection

Rules SDAs are the inspecting agencies. This has
been explicitly provided here for consistency
and clarity

Rule 12

Sub-rule (7),

Function of CERC as market

regulator for ESCerts trading

Role of CERC as Regulator of Exchange for

ESCerts is explicitly provided for.

#8

Rule 16

Sub-rule (3)

The value of per metric ton of

oil equivalent of energy for the
year 2014-15

The value of per metric ton of oil equivalent of

energy consumed has been calculated for the
FY 2014-15

#9

Form B
& Form
C

Name of the Empanelled

Accredited Energy Auditor Firm

To provide clarity

#10

Schedul
e

Insertion of Schedule II for

incorporation of Normalisation
Factors

Implementation during PAT Cycle I showed that

conditions during baseline and target years may
be very different due to which SEC are not
directly comparable. The schedule provides
formulae for Normalisation

After Schedule
I

Summary of Proposed amendment in Energy Conservation Rules,

2012
Omission of Some existing Provisions
Sr No

Rules

Sub Rule/ Clause

Deletion

Remarks

#1

Rule 4,

Clause (b(v)) of Sub

Rule (1)

Provision
to
report
disaggregated figures

Had been earlier included as a precautionary

measure to substantiate SEC at aggregated
level. However, implementation has shown
that disaggregated data is not required as
these data are not verified

#2

Rule 4,

After Clause (d), clause

(e)

Has same provision as given

in clause (c) of sub-rule 1

The normalisation of factors beyond the

control of DCs has already covered in clause (c)
of sub-rule 1

#3

Rule 6

sub-rule (2)

Earlier issuance of Escerts

(First and Second year of PAT
Cycle)

This provided for Provisional issuance of

ESCerts in the first and second years of PAT
cycle to enable market liquidity. However,
there are no buyers before the 3rd year. As we
move towards Rolling cycle (i.e., New plants
are added each year with a three year target),
this is no longer needed

#4

Rule 11

sub-rule (3)

Deletion of Formulae for

carrying out the earlier
issuance of ESCerts

Since the provision for early issuance has been

deleted, hence there is no relevance for
retaining the formulae to workout the
entitlement of ESCerts. (This is a
consequential to the deletion of early
issuance of ESCerts.)

Summary of Proposed amendment in Energy Conservation Rules

2012
Modification in some Provisions
Sr No

Rules

Sub
Clause

#1

Rule 2

Sub-rule
clause (d)

#2

Rule/

Original Provision

Modification

Remarks

1,

check-verification
The energy consumption
norms and standards achieved
in any year of the three year
cycle

check-verification
The
energy
consumption
norms and standards achieved
in the target year

This provided for Provisional issuance

of ESCerts in the first and second years of
PAT cycle to enable market liquidity

Rule 3

clause (a) of
sub-rule (2)

Determination
of
Energy
consumption
Norms
and
standards through Energy
Audit

1. Av rate of reduction in SEC

across Sectors through
Energy Audit
2. Through policy objectives

To provide comprehensive scope in the

setting of Specific Energy Consumption
target, and to be able integrate policy
objective in target setting

#3

Rule 4

Clause (c) of
sub-rule (1)

Schedule

Schedule I and Schedule II

Insertion of new schedule II

#4

Rule 4

Sub-rule (4)

Schedule

Schedule I and Schedule II

Insertion of new schedule II

#5

Rule 6

Sub-rule
(1),
clause (c) & (d)

Form II and Form III

Form 2 and
respectively.

#6

Rule 6

Sub-rule (7)

SDA to comment with in

Fifteen days or fifteen working
days

Twenty Days

Form

To provide clarity and consistancy

To remove ambiguity due to working days

Summary of Proposed amendment in Energy Conservation Rules

2012
Modification in some Provisions
Sr No

Rules

Sub
Clause

#7

Rule 8

#8

Rule/

Original Provision

Modification

Remarks

sub-rule (2)

The
Bureaus
action
in
accordance with the Check
Verification

where the Bureau decides to

undertake check-verification
on its own, it shall appoint an
accredited energy auditor,
who has not performed the
verification functions w.r.t.
concerned DC

To enhance the
verification of DCs

Rule 8

sub-rule
(3),
clause (b)

Rule 6

Rule 7

To correct the reference to rule

#9

Rule 8

Sub-rule
clause (c)

Permissible Error, omission or

misrepresentations
or
aggregation of data

Permissible errors, omissions

or misrepresentations
or
aggregation by way of errors,
and sums thereof shall not
exceed 0.5%

To provide consistency for errors in

check-verification and reasonable value
of tolerance

#10

Rule 8

Sub-rule 15

Sub-rule 9

Sub-rule 14

To correct the reference to rule

#11

Rule 11

Sub-rule (1)

BEE recommendation by ten

working days

Fifteen Days

To remove ambiguity due to working days

#12

Rule 11

sub -rule (2)

Earlier issuance of ESCerts

(First and Second year of PAT
Cycle)

Issuance of Certificate only

after the end of target year

As discussed earlier in relation to

omission of Rule 6 (2)

#13

Rule 12

sub-rule (1)

i.
ii.

(3),

Under Rule 10
Issue of ESCerts by
Central Government by
15 working days

i.
ii.

Under Rule 11
Twenty Days

scope

of

check-

i.

Typographical Error

i.

To remove ambiguity due to

working days

Summary of Proposed amendment in Energy Conservation Rules

2012
Modification in some Provisions
Sr No

Rules

Sub Rule/ Clause

Original Provision

Modification

Remarks

#14

Rule 12

sub-rule (3)

The value of one energy savings

certificates

The value of one energy savings

certificates shall be rounded off
to nearest whole number as per
IS 2: 1960.

To provide consistency

#15

Rule 12

sub-rule (4)

DC to sell ESCerts through Power

Exchange

DC to sell ESCerts through

Power Exchange regulated by
CERC

To provide clarity on position of power

exchanges under the CERC

#16

Rule 12

sub -rule (5)

DC who has been issued ESCerts may

use them for the purpose of Banking

DC who has been issued ESCerts may

use them for the purpose of Banking
and the ESCerts issued shall remain
valid till the completion of the
compliance period of their next cycle

As per direction in meeting with JS(EC), both subrules of rule 12 has been merged

To provide clarity on the submission of

compliance of energy consumption norms and
standard document- Form D

sub-rule (6)

ESCerts issued shall remain valid till

the completion of the compliance
period of next cycle

#17

Rule 13

Sub-rule (1)

The compliance with the energy

consumption norms and standards
during the target year in Form D by
the end of five months from the last
date of submission of Form A-

The compliance with the energy

consumption norms and standards
during the target year, in Form D by
the 30th November of the year
following the respective target
year.

#18

Rule 13

sub-rule
(1),
existing clause (b)

the designated consumer shall

purchase
the
energy
savings
certificates
equivalent
in
full
satisfaction of the shortfall in the
energy consumption norms and
standards worked out in terms of
metric ton of oil equivalent.

the designated consumer shall

purchase
the energy savings
certificates equivalent in full
satisfaction of the shortfall in the
energy consumption norms and
standards worked out in terms of
metric tonne of oil equivalent and
after achieving compliance , the
balance energy savings certificates if
any, may be used for the purpose of
banking and may sell through the
power exchange.

Summary of Proposed amendment in Energy Conservation Rules

2012
Modification in some Provisions
Sr No

Rules

Sub Rule/
Clause

Original Provision

Modification

Remarks

#19

Rule 16

sub-rule (1)

Average of
delivered fuel

Average price of
delivered fuel

For clarification

#20

Form A

Form A
modification

Form A modification to
capture normalised SEC

For clarification

FORM B

See rule 5
I/We
Form II, Form III

see rule 6(1)

I/We
Shall be FORM 2 and
FORM 3

Rule reference

FORM C

See rule 7
I/We
Form II, Form III

[see rule 8(9) and 10(14)]

M/s
Shall be FORM 2 and
FORM 3

Rule reference

#21

FROM D

Heading: 3. Sector
Heading: 4. SubSector

Heading: 3. Sector As
specified in FORM A
Heading: 4. Sub-Sector
As specified in FORM A

For clarification

#22

Schedule

Schedule

Schedule has been

substituted by Schedule -I

For consistency

For consistency

Baseline Fixation and Target Setting

Methodology

Baseline Fixation-Existing DCs

Existing DCs
As per Rule 14 of Energy Conservation Rules, 2012
SEC achieved -Un-normalised in the target year 201415
The existing Product-mix normalisation to be made for
the year 2014-15 (The energy factor/Ratio/Clinker
factor for target to changed as per target year factor)
Intermediary product effect is same as per Pro-forma
Power Export as per Weighted Heat Rate to be made
as per year 2014-15
As Fired GCV will be used for determining the thermal
energy consumption for SEC calculation
Other normalisation effect to be reviewed for impact in
the SEC in the target year

Existing DCs
Rule 14: The energy consumption norms
and standards achieved by the designated
consumer on the completion of the target
year, as mentioned in the compliance
report in Form-'D' shall be the baseline for
establishment of new plant specific energy
consumption norms and standards for
designated consumers for the next cycle.

PAT Cycle I Un-normalised SEC of Assessment year will be considered as Baseline year SEC for
the existing DCs in PAT Cycle II

Baseline Fixation-New DCs in existing sector

Consideration of years data
(A) During the first cycle of designated consumer
having more than three years life,

(D) Applications on New DCs

data for the previous three years, shall be considered.

(B) During the first cycle of designated consumer

having more than three years life and less than
three years data has been reported,

the same shall be considered

(C ) During the first cycle of designated consumer

having less than three years life and less than
three years data been reported,
the available years data shall be considered.

(D1) During the first cycle of

designated consumer, the data shall
be considered for those years where
the capacity utilisation is greater than
seventy percent (70%)
(D2) and if only one year data is
reported, the same shall be
considered irrespective of the capacity
utilization
(D3) and if capacity utilization is less
than 70% but not abnormally low for
all reported years, average of all these
years shall be considered.

Baseline Fixation-New DCs in existing and new sector

Baseline SEC Calculation- Based on Last financial year data
[E] Baseline SEC Fixation Condition
[A] Plants Life
> 3 years

OR

AND

[B] Plants Life >3

years
and Data
reported<3 years

OR

[C] Plants Life <3

years
and Data
reported<3 years

AND

AND

Baseline SEC: SEC

of Last Financial
year

Baseline Specific Energy Consumption

will be calculated based on the last
financial year data, if any conditions
mentioned in (A) or (B) or (C) and
condition mentioned in (D) are satisfied
for the last financial year.

In case, conditions are not satisfied for

the last financial year, average of all
those year where above mentioned
conditions are satisfied shall be
considered for calculating baseline
specific energy consumption

AND

AND

[D1] Capacity
Utilisation>70%

OR

[C.1] Plants Life

<3 years
and Data
reported=1 year

[D2] Capacity
Utilisation<70% but
not abnormally low
AND

Baseline SEC: SEC

calculated average
of years

AND

[D3] Capacity
Utilisation<70% but
not abnormally low
AND

Baseline SEC: SEC

calculated one
year

Last financial year of three year reported data will be considered as the Baseline year for the
new DCs in PAT Cycle II (Majority of the DCs)

Thank You