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Energy Conservation (Amendment) Bill 2022

Context:

The Ministry of New and Renewable Energy has introduced the Energy Conservation (Amendment) Bill in Rajya Sabha.

Relevance:

GS II: Government Policies and Intervention

Dimensions of the Article:

  1. About Energy Conservation (Amendment) Bill
  2. Key features of the bill
  3. Concerns

About Energy Conservation (Amendment) Bill

  • By amending the Energy Conservation Act of 2001, the Bill gives the central government more authority to designate a carbon credit trading system.
  • A percentage of the energy demands of designated users may need to come from non-fossil fuels.
  • India made promises pertinent to efforts to increase energy efficiency at the COP-26 meeting in 2021.
  • In light of this, in August 2022, the Energy Conservation (Amendment) Bill, 2022 was presented to Lok Sabha.

Key features of the bill

Carbon credit trading:
  • The Bill empowers the central government to specify a carbon credit trading scheme.  
  • Carbon credit implies a tradable permit to produce a specified amount of carbon dioxide or other greenhouse emissions.
Obligation to use non-fossil sources of energy:
  • The Act empowers the central government to specify energy consumption standards for designated consumers to meet a minimum share of energy consumption from non-fossil sources. 
  • Designated consumers include:
    • industries such as mining, steel, cement, textile, chemicals, and petrochemicals,
    • transport sector including Railways,
    • commercial buildings, as specified in the schedule.
Energy conservation code for buildings: 
  • The bill empowers the central government to specify norms for energy efficiency and conservation, use of renewable energy, and other requirements for green buildings.  
  • Under the Act, the energy conservation code applies to commercial buildings:
    • erected after the notification of the Code,
    • having a minimum connected load of 100 kilowatt (kW) or contract load of 120 kilo volt ampere (kVA).
Standards for vehicles and vessels: 
  • Under the bill, the energy consumption standards may be specified for equipment and appliances which consume, generate, transmit, or supply energy. 
  • The Bill expands the scope to include vehicles (as defined under the Motor Vehicles Act, 1988), and vessels (includes ships and boats).
Composition of the governing council of BEE: 
  • The Act provides for the setting up of the Bureau of Energy Efficiency (BEE). 
  • The Bureau has a governing council with members between 20 and 26 in number.

Concerns

  • 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 obligation. 
  • Given the limited competition among discoms in any area, consumers may not have a choice in the energy mix.

-Source: The Hindu


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