Energy efficiency refers to the use of fewer resources to do the same amount of labour or the reduction of energy waste. It has various advantages, including lower greenhouse gas emissions, less dependency on imported energy, and lower household and total expenses. Improving energy efficiency is the most cost-effective and frequently quickest option to minimize reliance on fossil fuels. Renewable energy technology can help with this goal. Every area of the economy, including building, transportation, industry, and energy production, presents a substantial opportunity to increase efficiency.[1]
In the hierarchy of sustainable energy, energy efficiency and renewable energy are regarded as the “twin pillars” of sustainable energy policy and are very significant. Since it can lessen reliance on energy imports from other countries while also reducing the rate at which indigenous energy supplies are depleted, many governments see energy efficiency as a crucial component of national security.
FRAMEWORK OF ENERGY EFFICIENCY
India’s primary energy demand increased significantly between 2000 and 2012, rising from more than 450 million toe to over 770 million toe. This demand will continue to rise, experts from the International Energy Agency and the Integrated Energy Policy Report estimate, reaching between 1250 and 1500 million toe by 2030. Growing earnings and economic progress are two factors behind this surge in demand, which in turn raises the cost of energy services including cooking, lighting, mobility, industrial output, office automation, and space cooling.
In contrast to the global average of 1.88 toe, India’s average annual energy supply per person in 2011 was only 0.6 toe. This suggests that the country’s energy supply is at an extremely low level. It is important to remember that without an annual energy supply of at least 4 toe per capita, no country has ever attained a Human Development Index of 0.9 or above. There is therefore a sizable unmet demand for energy services that must be satisfied in order to enable people to earn acceptable earnings and lead fulfilling lives.
With the introduction of the Energy Conservation Act (EC Act) in 2001, the Indian government made a significant effort to lower the energy intensity of its economy. The Bureau of Energy Efficiency (BEE) was founded on March 1, 2002, as a federal legislative body, to aid in the execution of the Act. The Act establishes requirements for equipment standards, energy-efficient building standards for commercial structures, and energy consumption guidelines for sectors with high energy expenses. Additionally, it requires the BEE and the Central Government to take steps to encourage and promote energy efficiency throughout the nation. Also, each state must designate organizations to carry out the Act’s mandates and advance energy efficiency within its borders.[2]
AMENDMENT TO ENERGY EFFICIENCY STANDARDS
The Energy Conservation (Amendment) Act of 2022 recently revised the Energy Conservation Act of 2001. The 2001 Act was enacted to provide measures for the intelligent use and conservation of energy, as well as anything relevant to or incidental to those goals. The revised Act establishes guidelines for the use of energy by equipment, appliances, automobiles, ships, office buildings, and other entities that utilise, generate, transmit, or supply energy.[3] The amendment seeks to (i) assist the implementation of “Panchamrit,” the five essential components that India proposed at COP-26 (Conference of Parties -26) in Glasgow 2021; and (ii) advance innovative and renewable energy sources and the National Green Hydrogen Program.[4]
India has decided to make changes in order to fulfil its COP-26 responsibilities. By making these changes, the country hopes to reach three important goals: (a) acquiring 500 GW of non-fossil energy capacity by 2030; (b) obtaining 50% of its energy needs from renewable sources by 2030; and (c) lowering its projected total carbon emissions by one billion tonees between the COP-26 conference and 2030. In addition, India wants to reduce its carbon intensity by 45% from 2005 levels by 2030, and it wants to attain net zero emissions by 2070.[5]
WAYS TO REDUCING ENERGY CONSUMPTION AND GREENHOUSE GAS EMISSIONS
- Trading in carbon credits: The government has the authority to select a carbon credit trading scheme, which are licenses that authorize the emission of a set amount of greenhouse gases such as carbon dioxide. Organizations that register and follow the plan may get carbon credit certificates from the government or an approved agency, which they can subsequently buy and sell. Some persons or organizations may also purchase carbon credit certificates willingly.[6]
- Requirement to use non-fossil energy sources: The government is permitted by the Act to create energy consumption guidelines. It may require designated users to obtain a certain percentage of their energy from non-fossil sources, with different requirements for different types of non-fossil sources and consumer groups. Mining, steel, cement, textiles, chemicals, petrochemicals, transportation (including railways), and commercial building are all designated as consumers in the schedule. Failure to comply with the mandate may result in a penalty of up to Rs 10 lakh, as well as a punishment of up to double the cost of the energy equivalent to exceeding the stated limit of oil usage.[7]
- Energy conservation standards for buildings: The Energy Conservation Act offers a framework for the creation of an Energy Conservation Code for new construction that incorporates location-based energy usage standards. The Bill, which defines standards for energy efficiency, conservation, renewable energy, and green building, has reinforced the law even further. The Act’s energy conservation requirement applies to commercial structures constructed following the Code’s notice and having a minimum connected load of 100 kW or contract load of 120 kVA. Both office and residential structures that meet these requirements will be subject to the new Energy Conservation and Sustainable Building Code suggested by the Bill.[8]
PENALTY FOR NON-COMPLIANCE OF ENERGY EFFICIENCY STANDARDS
The Amendment Act raises the fine for equipment and appliances that don’t adhere to the Central Government’s energy usage limits and for those that don’t have the information the Regulations requires.[9] In addition to the Act’s maximum penalty of ten lakh rupees, the Amendment Act levies a minimum of two thousand and a maximum of five thousand rupees for each appliance or equipment in violation.
Sanctions may also apply to automobiles and vehicles. In the case of a vessel, the person is required to pay a fine of up to ten lakh rupees in addition to an additional penalty of up to double the cost of each metric tonne of oil equivalent consumed in excess of the permitted limits.[10] Vehicle manufacturers that breach fuel consumption standards will also be fined twenty-five thousand rupees per vehicle for violations up to 0.2 liters per 100 km and fifty thousand rupees per vehicle for violations over 0.2 liters per 100 km, in addition to the ten lakh rupee penalty.
In addition to the two factors listed in the Act, the Amended Act adds a new provision to Section 28 that requires the Adjudicating Authority to take into account consumer damage. These two factors are (a) the amount of disproportionate gain or unfair advantage made as a result of the default, where quantifiable, and (b) the recurring nature of the failure.[11]
CHALLENGES AND LIMITATIONS OF ENERGY EFFICIENCY STANDARDS
- Restricted funding options: The lack of finance opportunities for energy efficiency projects, particularly for small and medium-sized enterprises (SMEs) and low-income households, is one of India’s biggest issues. This limits their ability to invest in equipment and technology that save energy.
- Lack of knowledge and guidance: India may not always place a high priority on energy efficiency, and many consumers may not be aware of the benefits of energy-efficient products and practices. This misinformation might prevent adoption and lower demand for goods that save energy.
- Price sensitivity: India has a high proportion of low-income households thus many consumers are looking for affordable energy-efficient items. The initial cost of investing in energy-efficient equipment can be high, and long-term energy savings may not always cover that cost.
India may need to concentrate on raising public awareness and education about energy efficiency, expanding access to financing for energy efficiency projects, tightening up regulatory enforcement, and spending money on research and development to find and create new energy-efficient technologies in order to get past these challenges. Moreover, initiatives and incentives targeted towards SMEs and low-income households may be particularly helpful in driving improvements in energy efficiency in these populations.
References:-
[1] Environmental and Energy Study Institute (EESI). (n.d.-d). Energy Efficiency | Topics | EESI. https://www.eesi.org/topics/energy-efficiency/description.
[2]Energy Efficiency | Government of India | Ministry of Power. (n.d.-c). https://powermin.gov.in/en/content/energy-efficiency.
[3] Energy Conservation Act, 2001, s 14(a).
[4] Statement of Objects and Reasons, The Energy Conservation (Amendment) Bill, 2022
[5] India’s Stand at COP-26. (n.d.-c). https://pib.gov.in/PressReleasePage.aspx?PRID=1795071.
[6]The Energy Conservation (Amendment) Bill, 2022. (n.d.-c). PRS Legislative Research. https://prsindia.org/billtrack/the-energy-conservation-amendment-bill-2022.
[7] Dubey, B. (2023b, January 10). The Energy Conservation (Amendment) Act, 2022: Key Highlights | India Corporate Law. India Corporate Law. https://corporate.cyrilamarchandblogs.com/2023/01/the-energy-conservation-amendment-act-2022-key-highlights/#_ftn12.
[8] Energy Conservation Act, 2001, s 2(c)(3).
[9] Energy Conservation Act, 2001, s 26 (2).
[10] Energy Conservation Act, 2001, s 26(2).
[11] Energy Conservation Act, 2001, s 28(c).
