How to Reduce Energy Consumption in Industry?

1. How to Reduce Energy Consumption in Industry? http://shaktifoundation.in

2. Sustainable Energy Future For India In light of India’s continuous struggle to meet the ever-growing demand for energy, the power sector is trying several means to increase power generation capacity particularly in the renewable energy sector. While we continue with this endeavor, it is equally important to take measures to ensure improved energy efficiency across all core sectors – industry, buildings and appliances. In this context, focus on industry sector is essential, as it accounts for nearly 40% of the total energy consumption in India. Reducing energy consumption in the industrial sector can prove to be very effective in designing the path towards a sustainable energy future for India.

4. Briefing Series on PAT scheme The Perform Achieve and Trade (PAT) scheme launched in 2012 is one of the most recently designed and implemented policy mandate aimed at reducing specific energy consumption of energy intensive and large industries in India. The scheme is the brainchild of the Bureau of Energy efficiency (BEE).. The first phase of the scheme ended in 2015. The scheme has been projected to bring savings of about 6 to 7 million TOE (tons of oil equivalent) of energy, and reduction of about 25 million Tons of CO2 equivalent.

5. Salient Features of PAT scheme • The PAT policy includes a reward-penalty system to increase energy savings in the industry sector. Overachievement of energy savings above the assigned targets will result in market based incentives such as tradable ES Certs, whereas under-achievers would need to purchase ES certs or pay a penalty. • The scheme focuses on improving the overall efficiency of the production process to achieve the eventual target of energy savings. It does not provide any emission reduction directives that aim at bringing down the absolute units of emissions as followed in several other countries. According to experts, PAT’s approach is far more realistic and sustainable as it seeks to encourage energy efficiency by setting targets on specific energy consumption. Political and commercial forces may influence absolute reduction of emission units.

7. Increased Participation of Energy Service Companies Another effective way to reduce energy consumption in industry sector could be increased participation of Energy Service Companies (ESCOs). An ESCO company delivers energy efficiency gains to its customers; its compensation is directly tied to the energy savings achieved. ESCOs provide attractive options for companies willing to take up Energy Efficiency (EE) projects. A model ESCO contract for industrial sector has been designed recently. The Alliance for Energy Efficient Economy (AEEE) has been commissioned to work on the model on a pilot basis in consultation with relevant stakeholders such as ESCOs, Indian industry and financing institutions.

8. Dr. Satish Kumar, Chairman AEEE who was the session Chair. The Indian industry is looking for more commitment from the government, both in terms of finance and policy.

9. Energy Efficiency Project Implementation The model ESCO performance contract for Industrial projects was required as currently there is absence of simple energy performance contracts that can govern such engagements between companies and an ESCO. The model that has been designed primarily focuses on robust measurement and verification tools and effective mechanisms for dispute resolutions based on an actual energy efficiency project implementation.

10. Conclusion Given the performance of PAT Phase I in bringing down the energy consumption levels in the industry sector, much more can be done in its subsequent phases for better results and a sustainable energy future for India. Policy makers must also focus on other means such as ESCO contracts for industrial efficiency projects.