Perform Achieve and Trade (PAT)

Perform, Achieve and Trade (PAT) is a regulatory instrument to reduce Specific Energy Consumption in energy intensive industries, with an associated market based mechanism to enhance the cost effectiveness through certification of excess energy saving which can be traded.

PAT is a mechanism for improvements in energy efficiency of energy intensive industries. Specific high energy intensive industries are identified as Designated Consumers (DCs) within certain key sectors, who are required to appoint an energy manager, file energy consumption returns every year and conduct mandatory energy audits regularly. The key tasks in the PAT mechanism is to set the methodology for deciding the Specific Energy Consumption (SEC) norms for each designated consumers in the baseline year and in the target years, devise verification process for SEC, finding ways of issuing the Energy Savings Certificates, operationalization of the trading process for ESCerts in addition to the compliance and reconciliation process for ESCerts.

A brief description of the approach is as follows:

1. Specification of specific energy consumption (SEC) norm for each designated consumer in the baseline year and in the target year.

2. Verification of the SEC of each designated consumer in the baseline year and in the target year by an accredited verification agency.

3. Issuance of Energy Savings Certificates (ESCerts) to those designated consumers who exceed their target SEC reduction.

4. Trading of ESCerts with designated consumers who are unable to meet their target SEC reduction after three years.

5. Checking of compliance, and reconciliation of ESCerts at the end of the 3-year period. In case of non-compliance, a financial penalty is due.

SEC is calculated on a Gate-to-Gate concept. It refers to the calculation of specific energy consumption in the baseline year and projected specific energy consumption in the target year covering different forms of net energy going into the boundary of the designated consumers’ plant and the products leaving it over the relevant cycle.

The SEC of an industry on Gate-to-Gate concept is calculated with the formula: Specific energy consumption (SEC) which is equal to the Net energy input into the designated consumers’ boundary divided by the total quantity of output exported from the designated consumers’ boundary.

Perform, Achieve and Trade Cycle- I (2012-13 to 2014-15)

Perform Achieve and Trade in its first cycle was designed to reduce the SEC in 478 DCs from 8 energy intensive sectors viz. Aluminum, Cement, Chlor- Alkali, Fertilizer, Iron & Steel, Paper & Pulp, Thermal Power Plant and Textile. Energy saving targets was given to these 478 DCs based on their current levels of energy efficiency, so that energy efficient units will have low target of percentage reduction, as compared to less energy efficient units which will have higher targets. The overall SEC reduction targets aimed to achieve an energy saving of 6.686 MTOE.

PAT Cycle-I had completed on 31st March, 2015 after which the scrutiny of the Performance Assessment Documents (PADs) submitted by the DCs was carried out by BEE. Out of the 478 DCs, scrutiny of the performance assessment documents submitted by 427 DCs was undertaken by BEE. The achievement in respect to 427 DCs was 8.67 MTOE which was 30% overachievement with respect to notified total target. This energy savings also translated into avoiding of about 30 million tonnes of CO₂ emission reduction.

Trading of ESCerts:

Ministry of Power has issued about 38.25 lakh ESCerts to 306 DCs of PAT cycle -I for excess energy saving and 110 DCs had been entitled to purchase about 14.25 lakh ESCerts to meet their shortfall to meet energy saving targets. Trading of ESCerts at Power Exchanges had commenced from 26^th September, 2017. The total volume of ESCerts traded were about 13 lakhs resulting into a business of about INR 100 crores in total 17 trading sessions.

Perform, Achieve and Trade Cycle-II (2016-17 to 2018-19)

Deepening” –identification of new DCs in existing sectors and “Widening” –inclusion of new sectors, was carried out by BEE before the commencement of the second cycle of PAT. Deepening study resulted into identification of 89 DCs from the existing sectors of PAT. Widening study resulted into notification of three new sectors namely Refineries, Railways and DISCOMs under PAT scheme. Energy consumption targets were notified to 621 DCs from 11 energy intensive sectors (eight existing sectors and three new sectors). PAT Cycle II commenced from 1st April, 2016 and was completed on 31st March 2019. 

Implementation of PAT cycle -II has resulted into total energy savings of about 14.08 MTOE translating into avoiding of about 66.01 Million tonne of CO₂ emission. 

Perform, Achieve and Trade Cycle III- (2017-18 to 2019-20)

The Parliamentary Standing Committee on Energy, Executive Committee on Climate Change under Prime Minister’s Office (PMO) and Group of Secretaries recommended notifying DCs under PAT scheme annually for accelerated coverage. Thus, PAT scheme is being implemented on a rolling cycle basis where new DCs/sectors are notified every year. Since a decision was taken to put PAT scheme under the rolling cycle from PAT-II onwards, PAT cycle-III was notified on 31st March, 2017. PAT cycle -III aimed to achieve an overall energy consumption reduction of 1.06 MTOE for which targets were notified to 116 Designated Consumers from six sectors viz. Thermal Power Plant, Cement, Aluminium, Pulp & Paper, Iron & Steel and Textile. PAT Cycle –III was completed on 31st March 2020, the verification of energy savings achieved under this cycle are under progress.

Perform, Achieve and Trade Cycle IV- (2018-19 to 2020-21)

The fourth cycle of PAT was notified on 28th March-2018. A total of 106 DCs with a total reduction target of 0.6998 MTOE were notified under PAT cycle -IV. These DCs were from 8 sectors consisting of 6 existing sectors of PAT cycle -I and two new sectors namely Petrochemicals and Commercial Buildings (Hotels).

Perform, Achieve and Trade Cycle V- (2019-20 to 2021-22)

PAT cycle –V had commenced with effect from 1st April 2019. Under PAT cycle –V, 110 DCs from the existing sectors of PAT i.e. Aluminum, Cement, Chlor-Alkali, Commercial Buildings (Hotels), Iron & Steel, Pulp & Paper, Textile and Thermal Power Plant were notified. The total energy consumption of these DCs is 15.244 MTOE and it is expected to get a total energy savings of 0.5130 MTOE through the implementation of PAT cycle –V.

Perform, Achieve and Trade Cycle –VI (2020-21 to 2022-23)

PAT Cycle-VI has commenced with effect from 1st April 2020. Under PAT Cycle-VI, 135 DCs from six sectors, i.e. Cement, Commercial buildings (hotels), Iron and Steel, Petroleum Refinery, Pulp and Paper and Textiles, have been notified. With implementation of PAT cycle –VI, it is expected to achieve a total energy savings of 1.277 MTOE.

BEE has rolled out six PAT cycles till 31st March, 2020, with a total of 1073 DCs covering 13 sectors. It is projected that total energy savings of about 26 MTOE translating into avoiding of more than 70 million tonnes of CO₂ will be achieved by March 2023.