PAT: Centre’s decarbonisation scheme not effective enough, says new CSE report

There has been very feeble reduction of CO2 emissions in the thermal sector under this scheme during the last ten years, finds CSE report

By Sowmiya Kannappan
Published: Thursday 02 December 2021

A key scheme introduced in 2008 by the Indian government to improve energy efficiency in Indian industries and consequently reduce greenhouse gas emissions is not effective, according to a recent report by New Delhi-based non-profit Centre for Science and Environment (CSE).

The CSE analysis found thermal power plants under this scheme in the last decade had reduced just 1-2 per cent of overall carbon dioxide emissions emitted by them.

The report attributed the inefficiency of the scheme to non-transparency, loose targets and overlooked deadlines.

The industrial sector consumes the most energy in India — accounting for 43 per cent of overall consumption — making it the major contributor to the country’s energy and environmental footprint.

Breakup of electricity consumption

Source: Perform, Achieve and Trade (PAT) Scheme in Thermal Power Plants: A Critical Analysis, Centre for Science and Environment, New Delhi, 2021

The Government of India released the National Action Plan on Climate Change (NAPCC) in 2008 to check the increasing energy consumption of industries and related carbon emissions.

There were eight national missions under the NAPCC. One of them was the National Mission for Enhanced Energy Efficiency (NMEEE).

The Union Ministry of Power and Bureau of Energy Efficiency were entrusted with the task of preparing the implementation plan for the NMEEE.

‘Perform, Achieve and Trade’ (PAT) is a competitive mechanism under NMEEE for reducing energy use in large industries.

The government shortlists industries and restricts the amount of energy they can consume and defines a time limit of three years by when this restriction should be met as part of PAT scheme.

These three years of time are called one PAT cycle. The industries are chosen after in-depth, sector-wise analysis by the government.

Industries that participate in this scheme are called designated consumers (DC). Those that overachieve their targets are issued energy savings certificates (ESCerts) that can be traded with industries that have not achieved their targets.

Non-achievers have to buy the ESCerts after the three years for compliance. Announcements for six cycles since 2012 have been made so far.

PAT scheme covered about 13 energy-intensive sectors. Sectors included are thermal power plants (TPP), cement, aluminium, iron and steel, pulp and paper, fertiliser, chlor-alkali, petroleum refineries, petrochemicals, distribution companies, railways, textile and commercial buildings (hotels and airports).

Sectors, DCs involved and status of PAT cycles

Source: Perform, Achieve and Trade (PAT) Scheme in Thermal Power Plants: A Critical Analysis, Centre for Science and Environment, New Delhi, 2021

In 2012, the PAT cycle-1 included 478 DCs from eight different sectors.

This was followed by:

  • 621 DCs from 11 energy-intensive sectors (eight existing sectors and three new sectors) in Cycle 2 (448 industries were repeated in Cycle 2 from Cycle 1, with revised targets)
  • 116 DCs from eight sectors (six existing sectors and two new sectors) in Cycle 3
  • 109 DCs from eight sectors in Cycle 4
  • 110 DCs from eight sectors in Cycle 5
  • 135 DCs from six sectors in Cycle 6.

CSE analysed the efficacy of the PAT scheme for the thermal power plants. The analysis clearly shows that in both Cycles 1 and 2, TPPs had the most lenient target and underperformed in meeting the target among other sectors.

Carbon dioxide (CO2) emissions from the energy sector are about 2,064 million tonnes of CO2, highlighting the carbon emission reductions achieved in both cycles.

Electricity generation contributes to 40 per cent of this total emission, which is 825.6 million tonnes of CO2 in one year. The overall CO2 emission reduction achieved by thermal power plants in PAT cycle 1 and 2 is 13 and 11.9 million tonnes respectively.

Comparison of CO2 emission and emission reduction from electricity generation

The total emission reduction from TPPs is 24.85 million tonnes of oil equivalent, which is only 3 per cent of the total emission from the sector. This highlights the fact that the target given to TPPs is very less compared to the overall emission reduction from the sector.

The energy reduction target should be made stringent in order to meet up with the global climate commitments with respect to greenhouse gas emission mitigation. Targets must be interlinked to material CO2 reduction.

CSE’s report is titled Perform, Achieve and Trade (PAT) Scheme of Thermal Power Plants: A critical analysis. 

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