The Energy Conservation (Amendment) Bill 2022

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Why has energy conservation been in news recently?

The Energy Conservation (Amendment) Bill 2022 was introduced in Lok Sabha by the Ministry of Power. The bill aims to amend the Energy Conservation (EC) Act, 2001(amended in 2010), which establishes the institutional framework, legal framework, and regulatory mechanism at the Central and State level to launch an effort to increase the country's energy efficiency

What were the features of the previous act?

• a framework for exchanging energy-saving certificates was established:

• Granted the Central Government the authority to issue an energy savings certificate to a selected consumer whose usage of energy falls below the established norms and criteria.
• Made it possible for selected consumers whose energy use exceeds the established criteria to obtain an energy savings certificate in order to comply with the standards.

• Widening the scope of building energy saving standards.
• Tightened the application of energy efficiency standards for equipment and appliances.
• Stricter punishments for violations.
• Specified that the Electricity Appellate Tribunal, established under the 2003 Electricity Act, would hear appeals.
• Gave the Bureau of Energy Efficiency authority to choose its own officials and employees, rather than relying on the Central Government to do so

What is the suggestive alternate to fossil fuels in the new act?

The Central Government has the authority to set the minimum share of non-fossil fuel usage by specified consumers as either energy or feedstock (for example, including Green Hydrogen, Green Ammonia, Biomass, and Ethanol). Industry (mine, steel, cement, textile, chemicals, and petrochemicals), the transportation industry (including railroads), and commercial buildings are also required to comply.

How does the act incentivise the use of clean energy?

• Certificates for carbon credits may be issued by the central government or any authorised agency to organisations that have registered with and are in compliance with the plan.
• Carbon credit certificates or energy-saving certificates can also be bought voluntarily. By granting carbon-saving certificates, efforts to use renewable energy are encouraged.
• To entice the private sector to take climate action, extra incentives should be considered, such as carbon credits for the use of sustainable energy.

Does it also apply to residential building?

"Energy conservation and sustainable building codes" should be used instead of "energy conservation building codes".The new code will establish norms and standards for a building's usage of renewable energy, energy efficiency, and other green building requirements. Instead of just commercial structures, the new regulation will now apply to office buildings and residential buildings that fulfil specified load and demand thresholds

What are the other proposed amendments?

• In addition to equipment and appliances, the Central Government may now also specify norms for procedures and energy consumption standards for vehicles (as defined by the Motor Vehicles Act of 1988) and vessels (including ships, boats, roll-on/roll-off vessels, etc.).
• Changes to penalty clauses: The bill stipulates punishments for breaking a number of the act's provisions, including inability to comply with minimal non-fossil fuel consumption requirements or energy consumption rules and standards
• State Electricity Regulatory Commissions (SERCs) should be given the authority to enact regulations to ensure the efficient performance of their duties.
• The BEE Governing Council's membership expanded, going from 20–26 to 31–37.
• The State Government is authorised by the Act to charge for the services provided by the designated agency to encourage effective use of energy and its conservation.
• Creation of a State Energy Conservation Fund by State Government to encourage the effective use of energy and its conservation within the State.
• The use of names that are misleadingly similar to the Bureau's name is prohibited.
• A budget for the upcoming fiscal year must be prepared by the designated agency and submitted to the state government.

What is the benefit of having an energy certificate?

Energy Saving Certificates (ESCerts) are issued to those plants that have achieved excess energy savings over their targets. Units that are unable to meet the targets either through their own actions or through purchase of ESCerts are liable to financial penalty under the Energy Conservation Act, 2001.