Pre-Bid Conference on BASELINE ENERGY AUDIT under Perform, Achieve & Trade (PAT) Scheme S P Garnaik Energy Economist Bureau of Energy Efficiency, Ministry of Power, GOI

NATIONAL MISSION ON ENHANCED ENERGY EFFICIENCY (NMEEE)  The National Action Plan on Climate Change was released by Honorable Prime Minister of India in June 2008  The Action Plan Outlines 8 Missions including National Mission on Enhanced Energy Efficiency (NMEEE)8 Missions  The Mission has outlined specific goalsgoals

Chronology of Events of NMEEE  30 th June 2008 : Hon’able PM releases the National Action Plan of Climate Change  September 2008 : NMEEE endorsed by steering Committee, MoP  3 rd October 2008 : Discussion on Draft outline in PMO  14 th Nov 2008 : First consultation workshop at Mumbai  24 th August 2009 : PM’s council on Climate Change approves NMEEE in principle  1 st December 2009 : EFC recommends the implementation plan of NMEEE to Cabinet with a financial outlay of Rs crores  May 2010 : Cabinet approves the financial outlay  Ammendment to EC Act, 2001 passed in parliament

NMEEE – Four New Initiatives NMEEE PATMTEEEEFPFEEED Energy Intensive Industries Targets for Mandatory Energy Saving Energy Efficient Appliances BLY SEEP DSM Stimulate Funding for ESCOs Fiscal Instrument for EE PRGF VCF Public Procurement

PAT Scheme : Background & Scope (1)  Covers 685 designated consumers in 9 sectorsdesignated consumers  All DCs consume about 240 mtoe energy i.e. about 60% of total energy consumption of the countryDCs consume about 240 mtoe energy  Targets would be given to all DCs to achieve the same within a time frame Targets Achievement > Target E-Scerts Achievement < Target Purchase E-Scerts / Penalty  National Target = 10 mtoe at the end of 1st PAT Cycle ( April 2011 – March 2014)

PAT Scheme : Background & Scope (2)  Large band-with in Specific Energy Consumption (As per the BEE sectoral Study) Large band-with  Energy Usage Pattern is varying extremely due to various diversitiesdiversities  Hence, the targets would be “Plant Specific”

PAT Legal Framework Furnish report of energy consumption to the Designated Authority of the State as well as to BEE (section 14(k)). Designate or appoint an Energy Manager who will be in-charge of submission of annual energy consumption returns of the Designated Agencies and BEE (section 14 (l)). Comply with the energy conservation norms and standards prescribed under section 14 (g) of the Act. Purchase Energy Saving Certificates (ESCerts) for compliance to section 14 (g) in the event of default. The Act has been amended with the addition of new sub-section 14A to enable this and section 14A(2) allows such trading. EScerts are defined by adding a new sub- section 2(ma). Monitoring and Verification of compliance by Designated Energy Auditors (DENA) which will be prescribed the Government/ BEE under section 14A/13 (p) of the Act. Excess achievement of the target set would entail issuance of ESCerts under section 14A(1). Penalty for non-compliance being Rs. 10 lakhs and the value of non-compliance measured in terms of the market value of tones of oil equivalent by inserting a new section 26(1A). BEE to be the overall regulator and dispute resolution agency and Energy Efficiency Service Ltd. (EESL) to be the process manager.

BASELINE ENERGY AUDIT (Methodology of Scope of Work)  Verification of Data Submitted by DCs Production All Energy Sources [ Carefully investigate the source of data as the same source will be used during final verification ] ItemDataUnitSource of Data Production-MU / MTDocument Purchased Elc.-MUDocument All Energy Source--Document

BASELINE ENERGY AUDIT (Methodology of Scope of Work)  Define the Plant Boundary (Gate-to-Gate Concept) Physical Boundary Process Boundary Investigate the exclusions like colony power, construction related, internal transportation etc. with the submitted data [ The plant boundary needs to be discussed with Plant Management ]

BASELINE ENERGY AUDIT (Methodology of Scope of Work)  Develop Process Flow Diagram Define sub-processes (Block Diagrams) Put operating parameters like Temp / Pressure / Flow / mass etc. in the process flow diagram with designed value  Develop the energy balance diagram of each sub-process

Sub-SystemName SS#1Rectiformer SS#2Potline SS#3GAP SS#4Bake Oven SS#5Rodding Shop SS#6FTP SS#7Cast House

Each Sub-System to be Studied for…  Brief description of the sub-system  Material Input & Output  Energy (Elect./Thermal) Input & Output  Technical Parameters for Energy Efficiency  Listing of major static and rotating equipments  Technology up-gradation since past years  SEC

BASELINE ENERGY AUDIT (Methodology of Scope of Work)  Find out major energy consuming equipments in each sub- system Investigate the technology List out critical parameters which affect the efficiency and energy consumption Operating vs. Designed value [ Measurements may be required at this stage. However, past energy audit reports, performance assessment reports may be referred to ]

BASELINE ENERGY AUDIT (Methodology of Scope of Work)  Example : Pot-line of an Aluminium Smelter Technology : Pre-Bake Parameters : Pot capacity Pot voltage Current Density ACD Anode Effect Factor

BASELINE ENERGY AUDIT (Methodology of Scope of Work)  Investigate All options related to Waste Heat Recovery Co-Generation Fuel Switch Use of EE equipment / System [ Detail discussion with management required at this stage ]

BASELINE ENERGY AUDIT (Methodology of Scope of Work)  Review the Past Energy efficiency Measures  Review the Future Energy Efficiency Approach/Strategy Detail discussion with plant management required  Preparation of Audit Report Potential evaluation with tentative cost-benefit analysis TechnologySub-SystemCategoryEnergy Saving Monetary Saving Investment TU PM O&M Others

Thanks …. For further information Please Contact S.P.Garnaik Energy Economist Bureau of Energy Efficiency Ministry of Power, GOI 4 th Floor, Sewa Bhawan, R.K.Puram NEW DELHI – Ph.: Fax :

National Solar Mission National Mission for Enhanced Energy Efficiency National Mission on Sustainable Habitat National Water Mission National Mission for Sustaining the Himalayan Ecosystem National Mission for a Green India National Mission for Sustainable Agriculture National Mission for Strategic Knowledge for Climate Change Missions under NAPCC

Mission Goals  Market-based approaches to unlock energy efficiency opportunities, estimated to be about Rs. 74,000 Crores  By : Annual fuel savings in excess of 23 million toe Cumulative avoided electricity capacity addition of 19,000 MW CO 2 emission mitigation of 98 million tons per year

The PAT Scheme  The market based mechanism to enhance the cost effectiveness in improving the Energy Efficiency in Energy Intensive industries through certification of energy saving which can be traded

Market Transformation for Energy Efficiency (MTEE)  Accelerating the shift to energy efficient appliances in designated sectors through innovative measures to make the products more affordable.

Energy Efficiency Financing Platform (EEFP)  Creation of mechanisms that would help finance demand side management programmes in all sectors by capturing future energy savings.

Framework for Energy Efficient Economic Development (FEEED)  Developing fiscal instruments to promote energy efficiency

Industry SectorAnnual Energy Consumption Norm to be DC (mtoe) No. of Identified DCs Aluminum Cement Chlor-Alkali Fertilizer Pulp & Paper Power Iron & Steel Textiles Railways List of DCs

State-wise DCs ( )

SectorMTOE Power (Thermal)160.3 Integrated Steel26.98 Cement14.47 Fertilizer11.95 Sponge Iron9.1 Textile3.5 Aluminium2.42 Paper1.38 Chlor-Alkali0.43 TOTAL Estimated Energy Consumption in DCs About 55% of DCs Contribute 96% of Total Consumption About 45% of DCs contribute rest 4% of Total Consumption Railways : 9.8 MTOE additional

Target in PAT Target is defined as the % reduction of ‘Specific Energy Consumption (SEC)’ from Baseline value. Plant System Boundary All forms of EnergyProduct EP SEC = E / P SECSEC Y1Y2Y3 Baseline SEC Target SEC Reduction in SEC Expressed in %

Sectoral studies by BEE on ‘Setting Up of Sectoral Bandwidth for DCs’ have revealed the impact on SEC due to above diversities SectorRange of SEC Power plant2300 – 3400 kcal / kwh Fertilizer5.86 – 9.11 Gcal/T of Urea Cement 665 – 900 Kcal/Kg of Clinker (Thermal) 66 – 127 KWH/ T (Elect) Integrated Steel6.15 – 8.18 Gcal / tcs Sponge Iron 4.4 – 7.6 Gcal / T (Thermal) 72 – 135 KWH/T (Elect) Aluminium (Smelter) Aluminium (Refinery) – KWH/T 3.28 – 4.12 MKcal / T of Alumina Pulp & Paper25.3 – 121 GJ/T Textile 3000 – Kcal/kg (Thermal) 0.25 – 10 KWH/Kg (Elect) Chlor-Alkali2300 – 2600 kwh/ T of caustic soda

The energy usage pattern varies widely in industries of a particular sector due to various diversities like -Scale of Production (Installed Capacities) - Use of Raw Material - Process Technology - Vintage - O & M Practices - Type of Product Output etc. Reasons for Large Energy Usage Bandwidth Factors of DiversityMost Affected Sectors a)Raw Material InputPulp & Paper, Fertilizer, Power Plant, Textile a)Quality of Raw Material / FuelAll sectors a)Process & TechnologyAluminium, Iron & steel, Chlor-Alkali, Paper a)Final Product outputTextile, Iron & Steel, Aluminium a)VintageAll Sectors a)Capacity UtililizationAll sectors

Approach for Setting Targets Depends upon the Objective of the Scheme Total Saving Objective = 10 mMTOE Setting Sector Targets based on available saving potential of Industries and Program Objectives SN Sector Energy Consumption Share of Consumption Apportioned Energy reduction No. of identified DCs (mMTOE)(%)(mMTOE) 1Power (Thermal) % Iron & Steel % Cement % Fertilizers % Railways (Approximated) % Textile (Approximated) % Aluminium % Paper & pulp % Chlor-Alkali % Total %

Example : Baseline Estimation Name of UnitABC Ltd. PlaceXYZ Total Installed Capacity TPDSector :Cement ParticularsUnit Installed CapacityTonnes Actual Production (Cement)Tonnes Capacity Utilization% Average in last 3 yreas% Deviation from Average in last 3 yras% Total Energy InputMillion Kcal Total Energy ConsumptionMTOE Gate-to-Gate SEC w.r.t. cementKcal/kg Base Year Average Capacity Utilization%80.08 Base line SEC (Gate-to-Gate)kCal/kg789

Example : Target Setting (1) Plant Name Production (in Tonnes)Estimated SEC (in MTOE/ ton) Relative SEC Total Energy consumpti on (in MTOE) % Target To be Energy Saving Average production (MT) Average SEC Plant13,62,7933,68,8673,78,1573,69, ,71,455 X x Plant23,58,9543,58,7343,59,2133,58, ,89, X x Plant376,8672,07,7412,50,9811,78, ,49, X x Plant466,34773,00899,40679, ,13, X1273.2x Plant5 NA 37,635 NA , X937.93x Total 13,91, X

Example : Target Setting (2) Total Saving xMTOE Target Saving 62000MTOE X4.15% Plant Name Baseline SEC Target (%)To be SECTo be MTOE Plan ,51,889 Plan ,67,806 Plant ,38,527 Plant ,08,391 Plant ,111 Total energy consumption at the end of 3 years (in MTOE)13,29,725 Total present energy consumption (in MTOE)13,91,594 Energy saving during the period61,870

Number of Clusters depend upon the Bandwidth of Baseline SEC Cluster 1 Cluster 2

THE PAT SCHEME ….. Approach INDUSTRY (DC) Establish Baseline Review of Present Energy Scenario & Bandwidth (Completed) Development of Baseline Formats with System Boundaries Data Collection, Compilation & Analysis Verification of Data Set Targets for SEC Reduction Achieve the Target Technology Transfer, EE Technology, R&M, R&D Verification Protocol Trade the higher achieved saving through E-Certs

Activity Flow Sheet Finanalization of DC List Getting information through “Form#1” Designated Consumer Prepare PAT Assessment Document (PAD) BEE Verification of PAD through DENA Validation of PAD through DENA Recommendation for e-certification Issue of e-Certs after successful M&V Baseline Format Design Getting Information Through Base Line Format Data Compilation/ Evaluation Target Setting [Declaration of Base Year, Target Year ] Baseline & Target Setting

Variation in Net Station Heat Rate from Design Net Heat Rate Reduction Target for % deviation in the Net Station Heat Rate % Reduction Target in Net Station Heat Rate Upto 5%10%0.5 More than 5% and upto 10%15%0.75 to 1.5 More than 10% and upto 20%20%2.0 to 4.0 More than 20%25%5 and above Target Setting for Power Station

Legal Framework Furnish report of energy consumption to the Designated Authority of the State as well as to BEE (section 14(k)). Designate or appoint an Energy Manager who will be in-charge of submission of annual energy consumption returns of the Designated Agencies and BEE (section 14 (l)). Comply with the energy conservation norms and standards prescribed under section 14 (g) of the Act. Purchase Energy Saving Certificates (ESCerts) for compliance to section 14 (g) in the event of default. The Act has been amended with the addition of new sub-section 14A to enable this and section 14A(2) allows such trading. EScerts are defined by adding a new sub- section 2(ma). Monitoring and Verification of compliance by Designated Energy Auditors (DENA) which will be prescribed the Government/ BEE under section 14A/13 (p) of the Act. Excess achievement of the target set would entail issuance of ESCerts under section 14A(1). Penalty for non-compliance being Rs. 10 lakhs and the value of non-compliance measured in terms of the market value of tones of oil equivalent by inserting a new section 26(1A). BEE to be the overall regulator and dispute resolution agency and Energy Efficiency Service Ltd. (EESL) to be the process manager.