National Mission for Enhanced Energy Efficiency (NMEEE)

NMEEE is part of National Action Plan on Climate Change ( 1/8 mission) and consists of 4 mechanisms:

Perform Achieve and Trade: A market based mechanism to enhance cost effectiveness of improvements in energy efficiency in energy-intensive large industries and facilities, through certification of energy savings that could be traded.

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

Energy Efficiency Financing Platform: 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: Developing fiscal instruments to promote energy efficiency

Mission Goals

A. Market-based approaches to unlock energy efficiency opportunities, estimated to be about Rs. 74,000 crores

B. By 2014-15:

1. Annual fuel savings in excess of 23 million toe

2. Cumulative avoided electricity capacity addition of 19,000 MW

3. CO2emission mitigation of 98 million tons per year

Iron & Steel, Cement, Chemicals & Petro Chemicals, Pulp & Paper and Aluminium are five most-energy intensive industrial sectors in India. In 2007, these accounted for 56% of India’s Industrial energy consumption.

Initiatives for Energy efficiency improvement in Industry:

1. Perform- Achieve- Trade (PAT) Mechanism:

  • Specific Energy Consumption (SEC) reduction targets for the 685 energy-intensive units which are designated consumers under the Energy Conservation Act.
  • Targets would be % reduction of current SEC
  • SEC measurement and verification by BEE through designated verifiers.
  • Mechanism: It creates a market for energy efficiency through tradable certificates, called Energy Saving Certificate (ESCerts) by allowing them to be used for meeting targets. These certificates can be issued to any of the 478 industries who are able to exceed their respective notified target, the value of the certificate being the excess achievement, more than the target set. The beneficiary industry could trade this certificate to any of the rest of the entities (of the 478) that is unable to meet its target, as buying ESCerts has been allowed as sufficient fulfilment of compliance requirement without any penal action.
  • ESCerts will be maintained in the DEMAT form and each ESCert will be equivalent to 1 Metric Tonne of Oil Equivalent (MTOE)
  • Trading can be carried out bilaterally or on special platforms created on the power exchanges
  • This innovative mechanism to encourage compliance is a significant departure from the command and control regime, while promising to be more efficient, transparent, and inclusive.
  • The monitoring and verification protocol of the scheme culls out the best from similar schemes around the globe, simultaneously making it simple, transparent and effective. The targeted reduction of SEC is measured on a gate-to-gate basis, by measuring energy usage per unit of output.  

2. Market Transformation for Energy Efficiency (MTEE)

  • Leveraging international funds for promoting energy efficiency
    • Project preparation to utilise bi-lateral/multilateral funds for energy efficiency
    • Implementing a National Energy-Efficiency CDM Roadmap
      • Public sector leadership and involvement for aggregation of projects
      • Programmes of Activity for Household lighting, Municipal DSM (Mu DSM), Agriculture DSM (Ag DSM), SME sector, Commercial Buildings sector and Distribution Transformers.
      • Preparation of new CDM Methodologies
      • Includes programme:
        • The Programme of Activities (PoA) to leverage CDM for agriculture and municipal sectors
        • The Bachat Lamp Yojana
        • Super efficient equipment programme

3. Energy Efficiency Financing Platform (EEFP)

  • Ensuring availability of finance at reasonable rates for energy efficiency project implementation- Expansion of EEFP to include other FIs and public and private sector banks.

4. Framework for Energy-Efficient Economic Development (FEED)

  • Providing comfort to lenders by provision of
    • Risk guarantee for performance contract Partial Risk Guarantee Fund (PRGF)
    • Venture Capital Fund for Energy Efficiency (VCFEE)
    • Initial seed capital from Government budget-can be expanded by contributions from other agencies as well.
    • Fund can be managed by the financial intermediaries

5. Energy Conservation Fund:

The energy efficiency fee will be deposited in Central Energy Conservation Fund managed by BEE