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:
- About Energy Conservation (Amendment) Bill
- Key features of the bill
- 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
