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27th July 2022 (8 Topics)

The Energy Conservation (Amendment) Bill 2022


In a bid to meet India’s commitment to exceed its Paris agreement climate targets, the Centre plans to table the Energy Conservation (Amendment) Bill 2022.


  • The Energy Conservation (Amendment) Bill seeks to increase India’s demand for renewable energy, thereby reducing the nation’s carbon emissions.
  • The Bill proposes to amend the Electricity Conservation Act 2001, last amended in 2010, to introduce changes such as incentivising the use of clean energy by issuing carbon saving certificates.

The Current Energy Conservation Act:

  • Currently, the Energy Conservation Act, 2001 (amended in 2010) governs the domain in India.
  • The Act empowers the Centre to specify norms and standards of energy efficiency for appliances, industrial equipment and buildings with a connected load over 100 kilo Watts (kW) or a contractual demand of more than 15 kilovolt-amperes (kVA).
  • The Act established the Bureau of Energy Efficiency.
  • The 2010 amendment extended the tenure of the Director General of the Bureau of Energy Efficiency from three to five years.
  • Framework for energy trading: According to the Act, the Centre can issue energy savings certificates to those industries which consume less than their maximum allotted energy.
  • However, this certificate can be sold to customers who consume higher than their maximum allowed energy threshold.
  • Penalty: In case of any violations under this Act, each offence shall attract a penalty of Rs ten lakh with an additional penalty of Rs 10,000 for each day the offence continues.
  • Appeal: Any appeals against any such order passed by the Central or state government will be heard by the appellate tribunal already established under the Electricity Act, 2003.

The proposed changes:

  • Defining the minimum share of renewable energy to be consumed by industrial units or any establishment. This consumption may be done directly from a renewable energy source or indirectly via the power grid.
  • Incentivising efforts to use clean energy by issuing carbon saving certificates
  • Strengthening institutions set up originally under the Act, such as the Bureau of Energy Efficiency
  • Facilitating the promotion of green Hydrogen as an alternative to the fossil fuels used by industries
  • Considering additional incentives like carbon credits for the use of clean energy to lure the private sector to climate action.
  • Including larger residential buildings under energy conservation standards to promote sustainable habitats. Currently, only large industries and their buildings come under the ambit of the Act.

Objective of proposed amendments:

  • The main objective of these proposed amendments is to reduce India’s power consumption via fossil fuels and thereby minimize the nation’s carbon footprint.
  • The Centre aims to develop India’s Carbon market and boost the adoption of clean technology.
  • India aims to meet its Nationally Determined Contributions (NDCs), as mentioned in the Paris Climate Agreement, before its 2030 target date.

India’s climate change commitments

  • India has committed to reducing the carbon intensity of its economy by 33-35 per cent by 2030 from its 2005 levels as part of its NDCs under the Paris Climate Agreement.
  • The nation has also promised to achieve over 40 per cent of its power generation from non-fossil-fuel energy resources by 2030.
  • In a bid to reduce its CO2 emissions to 550 metric tonnes (Mt) by 2030, India has committed to creating an additional carbon sink for 2.5 -3 billion tonnes of CO2 by increasing its tree and forest cover.
  • India’s five new climate targets are:
  • To increase its non-fossil energy capacity to 500 GW by 2030
  • To meet 50 per cent of India’s power demand via renewable energy sources
  • To reduce the carbon intensity of the Indian economy by 45 per cent
  • To reduce India’s total projected carbon emissions by one billion tonnes from 2021 to 2030
  • To achieve a target net zero (for carbon emissions) by 2070

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