Trading of ESCerts on Power Exchanges
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Genesis of PAT scheme - NAPCC
National Action Plan on Climate Change
Perform, Achieve, Trade (PAT)
National Solar Mission
Market Transformation for energy
efficiency
National Mission for Enhanced
Energy Efficiency (NMEEE)
Energy Efficiency Financing
Platform
National Mission on Sustainable
Habitat
Framework for Energy Efficient
Economic Development
National Water Mission
NAPCC
National mission for sustaining
the Himalayan Ecosystem
National Mission for a Green India
National Mission for Sustainable
Growth
National Mission for Strategic
Knowledge for climate
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Stakeholders under the PAT scheme
MoP
State
Designated
Agency
Power
Exchange
BEE
Energy
Auditor
Designated
Consumer
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PAT Sector wise Energy Consumption and
Targets under Cycle – 1 ( 2012 – 2015)
Specific Energy Consumption (SEC) = net energy input into
the designated consumers boundary / Total qty of output
Source: BEE
exported from the designated consumers’ boundary
Sr #
Sector
# of DCs in Cycle 1
Targets under Cycle – 1
(million TOE)
1
Aluminium
10
0.456
2
Cement
85
0.816
3
Chlor-Alkali
22
0.054
4
Fertilizer
29
0.478
5
Iron & Steel
67
1.486
6
Pulp & Paper
31
0.119
7
Textile
90
0.066
8
Thermal Power Plants
144
3.211
Total
478
6.686
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PAT is a market based mechanism designed
to enhance energy efficiency
Reward over achiever
MARKET BASED MECHANISM
Penalize under performer
• Baseline Specific
energy
consumption
(SEC)
• Target SEC
Monitoring and
Verification
• Under
achievement
• Over
achievement
• Market based
trading on Power
exchanges
Trading of
Escerts
Set Targets
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Power Exchanges will provide the trading
platform for ESCerts
Energy Saving Certificates (ESCerts) issued by Ministry of Power/BEE
1 ESCert = 1 ton of oil equivalent of (toe) energy saving achieved by
the designated consumer, over and above the target savings.
Penalty
Baseline
SEC
Issued Escerts
Achieved SEC
Saving Target
Compliance
Target
SEC
Purchase
Escerts
Scenario
1
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Scenario
2
ESCert Snapshot
Compliance
Target Entities
• Mandatory
• Designated Consumers
Buyers
• Industries not achieving target
Sellers
• Industries achieving beyond target
Target
• 6.6 million toe for 1st Cycle
Mechanism
• Cap and Trade
Phase Cycle
• 3 yrs
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ESCert Snapshot
ESCerts
Trading Platform
Trading Frequency
Price Determination
Penalty
Banking
Compliance Period
* proposed
• 1 ESCert = 1 MTOE (Metric Tonne of Oil
Equivalent
• Power Exchange only*
• To be finalized (Once a month)*
• Double Sided Closed Auction*
• As per Energy Conservation Act, 2001
(Link with market value of oil equivalent)
• Allowed for two consecutive cycles*
• 3 Years for DCs
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ESCerts: Proposed Exchange Trading Mechanism
ESCerts will be held in electronic form
Registered with a depository
System Registry would maintain record of all transactions
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ESCerts: Proposed Exchange Trading Mechanism
IEX would be a one stop shop for buying and selling:
1.
2.
3.
ESCerts
Renewable Energy Certificates
Electricity
DCs would have choice of becoming a member on the
exchange or client of the member of the exchange
Financial settlement will be through electronic bank interfaces
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ESCert Proposed Exchange Trading Mechanism
IEX
Submits Bid for trading
Bids are
accumulated
Confirm Margin
Requirement
Seller
Bank
A/c
Deposit fund
for trading
Buyer
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ESCert Proposed Exchange Trading Mechanism
IEX
MCV & MCP
calculated post
bidding session
Seller
Bank
A/c
Buyer
Participants
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ESCert Proposed Exchange Trading Mechanism
Invoice/ Credit Note
IEX
Financial
Settlement
through
Bank A/c
ESCerts
Seller
Buyer
Participants
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Bank
A/c
Why Electricity Exchanges for ESCerts
Transparent & efficient platform
Electronically accessible market place
Well established spot market for electricity & RECs
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Thank You !!!
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