Under National Mission for Enhanced Energy Efficiency (NMEEE), the scheme of Perform Achieve and Trade (PAT) is a regulatory instrument to reduce specific energy consumption in energy intensive industries, with an associated market based mechanism to enhance the cost effectiveness through certification of excess energy saving which can be traded.
The PAT Cycles, type of Industry and the Designated Consumers are notified by Bureau of Energy Efficiency (BEE) under provisions of Energy Conservation Act 2001.
The PAT Cycle-I covered the period FY 12-13 to FY 14-15, the PAT Cycle-II covers the period FY 16-17 to FY 18-19. In PAT Cycle – II, 621 Designated Consumers (DCs) from 11 sectors have been included with overall reduction target of 17.5 MToE.
The Bureau of Energy Efficiency (BEE) under Ministry of Power is implementing Perform, Achieve and Trade (PAT) scheme, a component under National Mission for Enhanced Energy Efficiency (NMEEE) in India. The scheme of Perform Achieve and Trade (PAT) is a regulatory instrument to reduce specific energy consumption in energy intensive industries, with an associated market based mechanism to enhance the cost effectiveness through certification of excess energy saving which can be traded.
The PAT scheme facilitates the Designated Consumers (DCs) to achieve their legal obligations under the Energy Conservation Act, 2001 (EC Act 2001), and motivates them with necessary market-based incentives to over-achieve the targets set for them.
Central Electricity Regulatory Commission (CERC) is the Market Regulator and Bureau of Energy Efficiency is Administrator for the trading of ESCerts. NLDC operating under POSOCO (Power System Operation Corporation limited) has been appointed as Registry for making DCs as eligible entities for trading of ESCerts and book-keeping of ESCerts.
| Salient features of ESCerts Trading | |
|---|---|
| Issuing Agency | Government of India on recommendation of BEE |
| ESCerts denomination | 1 ESCert = 1 MToE (Metric Tonne of Oil Equivalent) |
| Trading platform | Power Exchange operating under CERC (Power Market) Regulations, 2010 |
| Price determination | Double Sided Closed Bid Auction (Uniform Clearing Price) |
| Penalty for non-compliance | As per provision of Energy Conservation Act 2001 |
| Banking of ESCerts | Permitted till next PAT cycle |
| Compliance period | As per PAT cycle notified by BEE |
| Registry | NLDC operating under Power System Operation Corporation Limited |
Under National Mission for Enhanced Energy Efficiency (NMEEE), the scheme of Perform Achieve and Trade (PAT) is a regulatory instrument to reduce specific energy consumption in energy intensive industries, with an associated market based mechanism to enhance the cost effectiveness through certification of excess energy saving which can be traded.
The PAT scheme facilitates the Designated Consumers (DCs) to achieve their legal obligations under the Energy Conservation Act, 2001 (EC Act 2001), and motivates them with necessary market-based incentives to over-achieve the targets set for them.
Perform Achieve and Trade in its first cycle was designed to reduce the specific energy consumption (SEC) in energy intensive sectors
under which 478 DCs from 8 sectors viz. Aluminium, Cement, Chlor- Alkali, Fertilizer, Iron & Steel, Paper & Pulp, Thermal Power Plant and Textile. PAT cycle
I has achieved an energy saving of 8.67 MToE against the targeted energy saving of 6.886 MToE which was exceeded by about 30%.
Under PAT II, 621 DCs from 11 sectors have been included with an overall reduction target of 17.5 MToE. From 2017, the PAT Scheme is a rolling cycle to be implemented over a three year period. Under PAT III, 116 DCs have been included with a reduction target of 1.06 MToE
Bureau of Energy Efficiency (BEE) is the ‘Administrator’ for ESCert mechanism. The Bureau of Energy Efficiency, a statutory body established by the Government of India, under sub-section (1) of Section 3 of the Energy Conservation Act, 2001 (52 of 2001)
Hon’ble Central Electricity Regulatory Commission (CERC) has notified the Central Electricity Regulatory Commission (Terms and Conditions for Dealing in Energy Savings Certificates) Regulations, 2016, ‘ESCerts Regulation 2016’. This regulation mandates the trading of Energy Savings Certificates (ESCerts) to be done only on Power Exchanges.
‘Designated Consumer’ means any consumer notified by the Central Government under clause (e) of section 14 of the Energy Conservation Act, 2001 and for which a target is notified under the Statutory Orders issued by the Government of India from time to time
‘ESCerts’ are the Energy Savings Certificates issued by the Central Government in the Ministry of Power to the Designated Consumer under sub-section (1) of section 14(A) of Energy Conservation Act, 2001
National Load Despatch Centre (NLDC), operating under Power System Operation Corporation Limited (POSOCO), is designated to act as the ‘Registry’ for ESCert mechanism
The brief on ‘Perform, Achieve and Trade’ is
Perform
Achieve
Trade
Schedule to EC Act 2001 provides list of 15 energy intensive industries and other establishments to be notified as DC that has to undertake following:
‘Eligible entity’ means any designated consumer registered with Registry who has been issued or deemed to have been issued ESCerts and desire to sell or purchase such ESCerts for compliance with the energy consumption norms and standards specified under clause (g) of Section 14 of the EC Act 2001.
The validity of ESCerts shall be as specified in the Energy Conservation Rules. Currently, the ESCert issued in a PAT Cycle are valid till compliance of subsequent PAT Cycle.
The denomination of one ESCert as mentioned in the Energy Conservation Rules shall be equal to energy consumed in terms of one metric Ton of Oil Equivalent (MToE).
The Registry shall cross-check the cumulative sale bids placed on Power Exchanges with availability of ESCerts in respective Registry account(s) and in case breach of dealing in certificates as provided in Regulation 10 of ESCert Regulation 2016 is noticed, the Registry shall intimate the Power Exchanges to treat such eligible entities as defaulter and any bid submitted by such eligible entity shall not be considered by the Power Exchange for the purpose of price discovery. The bids submitted by such bidders shall become void and ineffective if the total sale bids submitted by eligible entity on both the Power Exchanges are more than the available ESCerts in the Registry account.
The matching mechanism on Power Exchanges for ESCerts transaction shall be closed bid double-sided auction with uniform clearing price to be discovered by Power exchange
The Hon’ble CERC vide letter ref no 21/1/2014/Reg.Aff./(PATscheme-BEE)/CERC dated 14th February 2017 has approved procedure submitted by BEE for transaction in ESCerts as provided in Regulation 7(a) of ESCerts Regulation 2016
A Seller can sell all the ESCerts issued to it by Ministry of Power (MoP) in respective PAT Cycle at any of the Power exchange. However, Order placed by Seller at all the Power exchanges should not be more than the quantity of ESCerts issued to it by MoP i.e. available ESCerts for transaction in the Registry account (refer Clause 14.4 step 4(b) of CERC approved procedure).
Buyers are allowed to purchase ESCerts beyond their compliance in respective PAT Cycle (refer Clause 14.4 step 4(c) of CERC approved procedure). However, it may be noted that ESCerts once purchased cannot be resold (refer Clause 2.4 of CERC approved procedure).
No price band is specified for transacting ESCerts on Power Exchange.
DC is not mandated to go for the registration with Registry. It is completely on the DC whether he wants to go for trading of ESCerts or not. For trading of ESCerts, DC has to become the Eligible Entity i.e. they have to register themselves with Registry.
PATNet portal provides the provision for the DC who is already registered with Registry. DC has to login and go to their dashboard section, click on participate in trade under trading tab.
DC having banked ESCerts from PAT Cycle I and have been issued ESCerts again in PAT Cycle II, have to go to their dashboard trading tab participate in trade. PATNet portal will ask for the payment to introduce the new ESCerts ( issued in PAT Cycle II) Note: As per the modification done in the procedure for transaction of ESCerts i.e. clause 3.4 (b) (c) and (d) DCs can introduce those ESCerts for trading in slots.
If the DC is already register with the Registry, then DC has to pay only the ESCerts fee i.e. Rs 5/ESCerts subject to ESCerts being introduced by DC for trading.
Neither the procedure nor the Regulations bind the DC to register with the Registry, it is completely the decision of the DC. When DC will not register with the Registry, they will not become the Eligible Entity for trading of ESCerts. They will be treated as Non Eligible Entity for trading of ESCerts. BEE shall take care of banking of ESCerts as well as extinguishment of ESCerts for such DCs who are not registered with Registry.
One Energy Saving Certificate is equivalent to 1 metric Tonne of Oil Equivalent (MTOE).
The value of 1 metric tonne of oil equivalent for the the PAT Cycle II is Rs 18,402/-
Any entity, who is notified by the Government of India for participation in PAT scheme, becomes a Designated Consumer (DC). All the DCs, to whom the Ministry of Power has issued or entitled to purchase ESCerts, have to get themselves registered with Registry (POSOCO) for becoming eligible entities to participate in the trading/transaction of ESCerts.
Being the Administrator, Bureau of Energy Efficiency (BEE) shall in form about the date of opening of registration to all DCs. The commencement of ESCert trading shall also be informed by BEE.
Any DC, who has over achieved its target for the current PAT cycle and has been issued ESCerts by the Ministry of Power, or any DC with banked ESCerts from its previous participating PAT cycle, can be a seller on Power Exchange during ESCert trading. Any DC, who has under-achieved its target for current PAT cycle and has compliance to meet as per Energy Conservation Act,2001,can be a buyer on Power Exchange during ESCert trading.
As per Rule 12 (5) and (6) of PAT Rules Amendment 2016: “The designated consumer who has been issued energy saving certificates during the current cycle may use them for purpose of banking or may sell them to any other designated consumer for the compliance and the energy savings certificates issued shall remain valid till the completion of the compliance period of their next cycle.”
There is banking allowed for buyers with ESCerts purchased over and above their compliance. They can use banked ESCerts for compliance in their next PAT Cycle. As per amendment in procedure i.e. clause 14.4 (c), the validity of excess ESCerts bought by buyers will be till the compliance of buyer (DC) in their next PAT Cycle, and these excess ESCerts cannot be resold.
ESCert are traded only on Power Exchanges i.e. IEX and PXIL
As per clause 10(5) of the Trading Regulations, 2016 , DC can register themselves with any of the Power Exchange or both. It is upto the DC whether they want to register with one or both the exchanges.
There is no floor and forbearance price of an ESCert. The price of ESCert is derived during market- based double-sided closed auction process at Power Exchange.
Registration with the Registry (POSOCO) is a one-time process. So, DC need not to register again with the Registry (POSOCO).
No, self-retention of ESCerts is not allowed within the group company. A notified DC can only use ESCerts for trade or for compliance purpose for itself only. It cannot transfer ESCerts within the group company.
DCs are requested to follow fee order issued by CERC on 30th April 2021. It is available on BEE’s website (https://beeindia.gov.in/) as well as website of CERC (http://www.cercind.gov.in/2021/orders/5-SM-2021.pdf)
DCs are requested to follow business rules of IEX and PXIL that are available on websites of both the exchanges. https://powerexindia.in/ and https://www.iexindia.com/.
Business Rules for ESCERT Click Here
Starting Registration of DCs to become Eligible Entity for PAT cycle-ll Click Here
CERC approved ESCert Procedure_dated 23.08.2021 Click Here
Procedure for transaction of ESCERT Click Here
Amendment Click Here
Annexure A_Final Modifications to ESCerts Procedure Click Here
Annexure B_Fee order Click Here