The Energy Conservation (Amendment) Bill, 2022

Background Energy Conservation (Amendment) Bill, 2022

The Energy Conservation Act, 2001 provides a framework for regulating energy consumption and promoting energy efficiency and energy conservation.

The Energy Conservation (Amendment) Bill, 2022 was introduced in the backdrop of UNFCCC’s COP 26 summit held at Glasgow. The bill was passed by Lok Sabha in August 2022.

The Bill seeks to amend the 2001 Act to:

• Facilitate the achievement of COP-26 goals
• Introduce concepts such as mandated use of non-fossil sources and carbon credit trading to ensure faster decarbonisation of the Indian economy.

Key Provisions of the Energy Conservation (Amendment) Bill, 2022

Mandatory use of Non-Fossil Sources of Energy

• The central government may specify the designated consumers to meet a minimum share of energy consumption from non-fossil sources.
• Different consumption thresholds may be specified for different non-fossil sources and consumer categories.
• Designated consumers include:
  • Industries such as mining, steel, cement, textile, chemicals etc.
  • transport sector including Railways
  • Commercial buildings, as specified in the schedule.
• Failure to meet the obligations 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.
• The central government or any authorized agency may issue carbon credit certificates to entities registered under and compliant with the scheme.

Energy Conservation Code for Buildings

Earlier

• The 2001 Act empowers the central government to specify energy conservation code for buildings.
• The code prescribes energy consumption standards in terms of area.
• Applicability: Under the 2001 Act, the energy conservation code applies to commercial buildings of certain criteria.

Now

• The new bill provides 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: The new code will also apply to the office and residential buildings of certain criteria.

Standards for Vehicles and Vessels

Earlier

• Under the 2001 Act, the energy consumption standards may be specified for equipment and appliances which consume, generate, transmit, or supply energy.

Now

• The new bill expands the scope to include vehicles (as defined under the Motor Vehicles Act, 1988), and vessels (includes ships and boats).

Regulatory Powers of SERCs

Earlier

• The 2001 Act empowers the State Electricity Regulatory Commissions (SERCs) to adjudge penalties under the Act.

Now

• The Bill adds that SERCs may also make regulations for discharging their functions.

Composition of BEE

Earlier

• The 2001 Act provides for the setting up of the Bureau of Energy Efficiency (BEE).  The Bureau has a governing council with members between 20 and 26 in number.

Now

• The Bill instead provides that the number of members in the governing council will be between 31 and 37.

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