The Energy Conservative Act, 2001

The Energy Conservative Act, 2001

The Energy Conservation Act, 2001 was enacted to provide for efficient use of energy and its conservation and for matters connected therewith. This act provides for the establishment and incorporation of the Bureau of Energy Efficiency (BEE). The act empowers the central government to grant energy savings certificates to designated consumers whose energy consumption is less than the prescribed norms and standards and consumers 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.

 This Act requires large energy consumers to adhere to energy consumption norms; new buildings to follow the Energy Conservation Building Code; and appliances to meet energy performance standards and to display energy consumption labels.

 The 2008 National Climate Action Plan builds on this legislation to achieve its energy efficiency target. Under the Act, large energy-consuming industries are required to undertake energy audits and an energy-labelling programme for appliances has been introduced.

 Bureau of Energy Efficiency (BEE)

• The Bureau of Energy Efficiency has been established with effect from 1st March 2002 under the provisions of the Energy Conservation Act, 2001. 
• It is responsible for the implementation of policies and programmes related to energy. 
• It also coordinates the implementation of energy conservation activities. 
• The mission of the Bureau is:
  • To institutionalise energy efficiency services, 
  • To enable delivery mechanisms in the country
  • To provide leadership to energy efficiency in all sectors of the economy
  • To assist in developing policies and strategies with a thrust on self-regulation and market principles, within the overall framework of the Energy Conservation Act, 2001 (Amendment Act, 2010).
• Its primary objective is to reduce energy intensity in the Indian economy.

Powers and functions of BEE

The Bureau may perform such functions and exercise such powers, which are as follows:

• To recommend to the Central Government the norms for processes and energy consumption standards required to be notified.
• To recommend to the Central Government for issuing of the energy savings certificate. 
• To prepare standards and labels of appliances and equipment. 
• To develop a list of designated consumers. 
• To undertake promotional activities in coordination with centre and state-level agencies.
• To develop Energy Service Companies (ESCOs). 
• To transform the market for energy efficiency. 
• To create awareness through a variety of measures including clearing houses.
• To promote innovative financing of energy efficiency projects. 

Penalty Guidelines for Non-Compliance with Sections 14 and 15

• Non-compliance with clauses (h), (i), (k), (l), (c), (h) of section 14 or 15 can result in a penalty of up to ten lakh rupees.

• For continuing failures, an additional penalty may be imposed up to ten thousand rupees per day.

• Non-compliance with clauses (c) and (d) of section 14 can result in additional penalties of up to five thousand rupees per appliance or equipment.

• Non-compliance with industrial units or vessels can result in additional penalties of up to twice the price of every metric ton of oil equivalent consumed in excess of prescribed norms.

• Vehicle manufacturers can face additional penalties for non-compliance with fuel consumption norms.

• Non-compliance with sub-section (1) of section 13A or failure to provide information under section 52 can result in penalties up to fifty thousand rupees on the first non-compliance or failure.

• Any unpaid amount can be recovered as an arrear of land revenue.

The Energy Conservative Bill, 2022

• 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.
• 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.
• Designated consumers must meet certain non-fossil energy use obligations.  Given the limited competition among discoms in any area, consumers may not have a choice in the energy mix.