The Energy Conservation (Amendment) Bill 2022 and India’s climate targets

Published
5th Aug, 2022

Context

In a bid to meet India’s commitment to exceeding its Paris agreement climate targets, the Energy Conservation (Amendment) Bill 2022 has been tabled in Parliament.

About

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.

Key points of the Bill

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 incentivizing the use of clean energy by issuing carbon saving certificates. Some of the major changes proposed were;
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.
Incentivizing 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.

What does the current Energy Conservation Act say?

Currently, the Energy Conservation Act, 2001 (amended in 2010) governs the domain in India.
The Act empowers the Centre to specify norms and standardsof 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 offense shall attract a penalty of Rs ten lakh with an additional penalty of Rs 10,000 for each day the offense 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.

India’s Commitment against Climate change

India has committed to reducing the carbon intensity of its economy by 33-35 percent 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.

Prime Minister expressed confidence that India will meet its climate targets before 2030, he revised India’s NDCs at the COP26 Summit with five new targets;

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 percent
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

Some Government Initiatives against Climate Change

Union Finance Minister announced a slew of measures to reduce India’s carbon footprint as part of Budget 2022-23:

Allocation of Rs 19,500 crores to facilitate domestic solar manufacturing.
Use of 5-7 percent biomass pellets for co-firing in thermal power plants.
Avoid stubble burning in agricultural fields.
To promote the blending of fuel, an additional differential excise duty of Rs 2/litre is to be levied on unblended fuel.
To achieve clean transport, a new battery swapping policy is to be formulated for electric vehicles
Issue ‘Green Bonds’ — fixed-income financial methods to fund projects with positive environmental effects — to raise capital for green infrastructure.
Such sovereign green bonds can be used in climate adaptation projects which lack private funding.

What can be done further to achieve India’s Targets?

Sector-wise targets: India needs to focus on sectorial targets for the next ten years and more to manage climate change impact.
India should develop an explicit carbon tax regime that will help limit carbon emissions.
Other measures can be;
Focus on increasing energy efficiency,
A greater thrust on electrification,
Shifting power generation from fossil fuels,
Expanding afforestation and developing carbon capture utilization and storage (CCUS) technologies.
Need for greater public-private partnerships to achieve the climate targets.

Conclusion

It is now clear that initiatives to prevent climate change are started but, most importantly, these initiatives must be continuous and sustainable and every individual in every country will need to contribute to preventing climate change.