India unveils energy efficiency trading scheme

India’s Prime Minister has unveiled plans to launch an energy efficiency trading scheme aimed at reducing consumption by around 5% annually by 2015.

The National Mission on Enhanced Energy Efficiency will introduce a ‘Perform, Achieve and Trade’ (PAT) mechanism that would assign energy efficiency targets to the country’s most energy intensive industries.

Any organisations that achieve energy efficiency improvements above and beyond their targets would be allocated Energy Saving Certificates (ESCerts), which can be saved or traded.

“This Mission will enable about INR 75,000 crores ($15 billion) worth of transactions in energy efficiency,” said Prime Minister Manmohan Singh.

The plans also include setting up two funds to support energy efficiency projects – the Partial Risk Guaranty Facility will guarantee loans, while the Venture Capital Fund will invest in manufacturing of energy efficient products and energy efficiency services.

The plans are intended to boost the development of energy service companies (ESCOs), which would invest in energy efficiency improvements to buildings, municipalities and agricultural organisations.

The Mission will be implemented by the Bureau of Energy Efficiency (BEE), which will have an initial budget of over $60 million including seed capital for the two funds.

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28 August 2009