New Delhi, India — (METERING.COM) — September 4, 2009 – India’s Prime Minister’s Council on Climate Change has approved “in principle” the National Mission on Enhanced Energy Efficiency, under which an energy efficiency trading scheme expected to save 5 percent of annual energy consumption and nearly 100 million tonnes of carbon dioxide annually by 2015 will be launched.
The project, which is expected to cover around 700 installations and enable about Rs 75,000 crores (US$15.4 billion) worth of transactions in energy efficiency, will be underpinned by a market in tradable energy efficiency certificates, named ESCerts.
“Our success in reducing the energy intensity of our growth will also reduce the carbon intensity of our growth,” said Prime Minister Manmohan Singh, announcing the plan. “This will have a beneficial impact on our emissions trajectory. The implementation of this mission will also be a powerful signal to the international community that we are willing to contribute in a significant manner, to meeting the global challenge of climate change.”
The most innovative and challenging new initiative to be introduced under the Mission is the “Perform, Achieve and Trade” (PAT) mechanism which would assign energy efficiency improvement targets to the country’s most energy intensive industrial units, with the provision of allowing them to retain any energy efficiency improvements in excess of their target in the form of the ESCerts. Units will also be allowed to use purchased ESCerts to meet their targets.
Other Mission initiatives include expanded use of the carbon market to help achieve market transformation towards more energy efficient equipment and appliances, and the creation of venture capital and partial risk funds to help channel investment into energy efficiency projects.
Another major goal of the Mission is the promotion of Energy Service Company (ESCO) based upgrades to energy efficiency in buildings and municipalities.
The Mission will be implemented by the Bureau of Energy Efficiency (BEE), with budgetary support, including seed capital for the two funds, estimated at Rs 295 crores (US$60 million) in the current plan period.