LS clears Bill to speed up ‘green transition’
Aug. 9, 2022

In News:

  • The Lok Sabha has passed the Energy Conservation (Amendment) Bill, 2022.
  • The bill is aimed at putting in place provisions to make the use of clean energy mandatory and paving the way for the setting of carbon markets in the country.

What’s in today’s article:

  • About Energy Conservation Bill, 2022 (Key provisions of the Bill)                

Energy Conservation (Amendment) Bill, 2022:

  • The Bill seeks to amend the Energy Conservation Act, 2001, last amended in 2010.
  • The Act promotes energy efficiency and conservation. It provides for the regulation of energy consumption by equipment, appliances, buildings, and industries. 

Key proposals under the Bill include –

  • Obligation to use non-fossil sources of energy:
    • The 2001 Act empowers the central government to specify energy consumption standards.
    • The Bill adds that the government may require the designated consumers to meet a minimum share of energy consumption from non-fossil sources.
    • Designated consumers include:
      • industries such as mining, steel, cement, textile, chemicals, and petrochemicals,
      • transport sector including Railways, and
      • commercial buildings, as specified in the schedule.
    • Failure to meet the obligation for use of energy from non-fossil sources will be punishable with a penalty of up to Rs 10 lakh.
  • Carbon Trading:
    • The Bill empowers the central government to specify a carbon credit trading scheme.
    • Carbon credit implies a tradeable permit to produce a specified amount of carbon emissions.
    • The central government or any authorized agency may issue carbon credit certificates to entities registered under and compliant with the scheme.
    • The entities will be entitled to purchase or sell the certificate.
  • Energy conservation code for buildings:
    • The 2001 Act empowers the central government to specify energy conservation code for buildings.
    • The code prescribes energy consumption standards in terms of area.
    • The Bill amends this to provide for an ‘energy conservation and sustainable building code’.
    • This new code will provide norms for energy efficiency and conservation, use of renewable energy, and other requirements for green buildings.
  • Applicability to residential buildings:
    • Under the 2001 Act, the energy conservation code applies to commercial buildings:
      • erected after the notification of the code, and
      • having a minimum connected load of 100 kilo watts (kW) or contract load of 120 kilo volt ampere (kVA).
    • Under the Bill, the new energy conservation and sustainable building code will also apply to the office and residential buildings meeting the above criteria.
    • The Bill also empowers the state governments to lower the load thresholds.
  • Standards for vehicles and vessels:
    • Under the 2001 Act, the energy consumption standards are specified for equipment and appliances which consume, generate, transmit, or supply energy.
    • The Bill expands the scope to include vehicles and vessels (includes ships and boats).
    • Vehicle manufacturers in violation of fuel consumption norms will be liable to pay a penalty of up to Rs 50,000 per unit of vehicles sold.
  • Regulatory powers of SERCs:
    • The 2001 Act empowers the State Electricity Regulatory Commissions (SERCs) to adjudge penalties under the Act.
    • The Bill adds that SERCs can also make regulations for discharging their functions.
  • Composition of the BEE governing council:
    • Under the 2001 Act, the governing council of the Bureau of Energy Efficiency (BEE) has members between 20 and 26 in number.
    • The Bill instead provides that the number of members will be between 31 and 37.
    • It also provides for up to seven members representing industries and consumers.