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.
Key points of Discussion:
Analysis of Proposed Changes:
The Bill seeks to facilitate the achievement of COP 26.
It empowers Central Government to specify carbon credit trading Scheme.
Energy Conservation and sustainable Building code to be provided.
The Bill seeks to provide a balanced approach for sustainable development.
It will help to democratize the climate Debate across the world.
To expand the economy for developing countries, such an approach is useful.
Implementing agencies involved:
Project Implementation: Bureau of energy efficiency (BEE).
Energy transition from fossil fuel to clean fuel by: Ministry of New and Renewable energy (MNRE).
Regulation of Carbon Credits: Ministry of Power
The main objective of these proposed amendments is to reduce India’s power consumption via fossil fuelsand thereby minimize the nation’s carbon footprint.
The Centre aims to develop India’s Carbon marketand 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.
Provisions of the Amendment:
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.
Need of amendments:
To obtain India’s five new climate targets given below; the amendments in the energy bill has been introduced.
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 intensityof the Indian economy by 45 per cent
To reduce India’s total projected carbon emissionsby one billion tonnes from 2021 to 2030
To achieve a target net zero (for carbon emissions) by 2070
Carbon Credit and Workings: Carbon credit trading aims to reduce carbon emissions, and hence, address climate change. The question is whether the Ministry of Power is the appropriate Ministry to regulate this scheme. A further question is whether the market regulator for carbon credit trading should be specified in the Act.
Carbon certificates and issues: Same activity may be eligible for renewable energy, energy savings, and carbon credit certificates. The Bill does not specify whether these certificates will be interchangeable.
Transition as a mandate: Designated consumers must meet certain non-fossil energy use obligation. Given the limited competition among discoms in any area, consumers may not have a choice in the energy mix.