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The Lok Sabha's passing of the Energy Conservation (Amendment) Bill, 2022, is being touted by many as India's major step towards meeting our climate goals.
The bill is expected to directly contribute to India's Nationally Determined Contributions (NDC), which are India's commitments towards climate change action under the Paris Agreement.
The Energy Conservation (Amendment) Bill, 2022 was proposed in the Lok Sabha on 3 August. On Tuesday, 9 August 2022, the legislation was passed. The bill aimed at ensuring greater use of renewable energy and enforcing penalties on industrial polluters for carbon emissions.
The original Energy Conservation Act, 2001, was created with the intention to provide efficient and effective uses of energy as well as its conservation.
The following amendments have been made to the Energy Conservation Act under the recently passed bill:
Obligation to use non-fossil sources of energy
Carbon trading
Energy conservation code for buildings
Applicability to residential buildings
Standards for vehicles and vessels
Regulatory powers of SERCs
Composition of the governing council of BEE
It allows the government to specify energy consumption standards. Specified consumers also need to meet a minimum share of energy consumption from fossil sources of energy. Failure to meet this obligation may result in a penalty of up to Rs 10 lakh.
The bill suggests that the energy conservation code for buildings be amended to an energy conserving and sustainable building code. The code prescribes energy consumption standards. The amendment also changes the applicability of the code to include offices and residential buildings meeting their set criteria.
The Act originally only included energy consumption standards for equipment and appliances that consume, generate, transmit or supply energy. However, this has now been amended to include vehicles and vessels (i.e. boats and ships.)
The Act empowered the State Electricity Regulatory Commissions to enforce any penalties; the bill also allows the SERCs to make regulations for discharging their functions.
The Bureau of Energy Efficiency came into being under the 2001 Act and included a governing council of up to 26 members, which has now been altered to up to 37 members.
The reactions towards this bill have been largely positive.
Experts hope that the bill will promote the deployment of non-fossil fuels and carbon trading. Increased obligation on states to increase their share of non-fossil fuels in their energy mix is expected to push the demand for it.
Carbon trading will further incentivise people to earn more revenues and thereby decarbonise their operations. Further, this will promote RE resource-rich states to sell surplus RE energy to other states to meet their RPO obligations, according to Energy Economist Vibhuti Garg.
Bharath Jairaj, WRI Energy Program's Director, also added that the Electricity Conservation Bill would improve the existing EC Act, 2001, by looking beyond energy efficiency.
It mandates the use of non-fossil sources such as green hydrogen, green ammonia, biomass, and ethanol in industries, sets up a domestic market enabling the trading of carbon credits, and includes large residential building complexes under the ambit of the Energy Conservation Building Code (ECBC).
Further, it will enhance the scope of ECBC by including renewable energy and green building measures in new constructions and promoting the use of renewable energy sources in the end-use energy demand sectors to align with India’s climate commitments.
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