Amendment to Energy Conservation Act,2001

2nd November, 2021 Economy

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Context:

The Power Ministry proposes amendments in the EC Act to boost renewable energy use.

The Ministry of Power has proposed amendments to the Energy Conservation Act, 2001.
The amendments are aimed at promoting the consumption of renewable energy.
They include a provision for specifying the minimum quantum of renewable energy in the overall consumption by establishments and industrial units.
The objective will be to enhance demand for renewable energy at the end-use sectors such as industry, buildings, transport, etc.
There will be provision to incentivise efforts on using clean energy sources by means of carbon saving certificates.
The proposal also includes expanding the scope of the Act to include larger Residential buildings, with an aim to promote Sustainable Habitat.

The proposed amendments would facilitate the development of a carbon market in India and prescribe minimum consumption of renewable energy either as direct consumption or indirect use through the grid.
This will help in the reduction of fossil fuel-based energy consumption and carbon emission to the atmosphere.
This is expected to help India achieve its ambitious Nationally Determined Contributions (NDCs) of reducing emission intensity by 33-35 per cent in 2030 against the levels of 2005.
Furthermore, by adopting energy efficiency measures, India holds the potential to reduce about 550 MtCO2 by 2030.
The proposed changes to the EC Act will boost the adoption of clean technologies in various sectors of the economy.
The provisions would facilitate the promotion of Green Hydrogen as an alternative to the existing fossil fuels used by the industries.
The additional incentives in the form of carbon credits against the deployment of clean technologies will result in private sector involvement in climate actions.

the Government of India enacted the Energy Conservation Act, 2001 (52 of 2001). The Act provides for the legal framework, institutional arrangement and a regulatory mechanism at the Central and State level to embark upon energy efficiency drive in the country.
Five major provisions of EC Act relate to Designated Consumers, Standard and Labelling of Appliances, Energy Conservation Building Codes, Creation of Institutional Set up (BEE) and Establishment of Energy Conservation Fund.
The Energy Conservation Act became effective from 1st March, 2002 and Bureau of Energy Efficiency (BEE) operationalized from 1st March, 2002.
Energy efficiency institutional practices and programs in India are now mainly being guided through various voluntary and mandatory provisions of the Energy Conservation Act.
The EC Act was amended in 2010 and the main amendments of the Act are given below:

The Central Government may issue the energy savings certificate to the designated consumer whose energy consumption is less than the prescribed norms and standards in accordance with the procedure as may be prescribed.
The designated consumer whose energy consumption is more than the prescribed norms and standards shall be entitled to purchase the energy savings certificate to comply with the prescribed norms and standards.
The Central Government may, in consultation with the Bureau, prescribe the value of per metric ton of oil equivalent of energy consumed.
Commercial buildings which are having a connected load of 100 kW or contract demand of 120 kVA and above come under the purview of ECBC under EC Act.