National Mission for Enhanced Energy Efficiency (NMEEE)

The National Mission for Enhanced Energy Efficiency (NMEEE) is one of the eight missions under the National Action Plan on Climate Change (NAPCC).NMEEEaims to strengthen the market for energy efficiency by creating conducive regulatory and policy regimeand has envisaged fostering innovative and sustainable business models to the energy efficiency sector.

The Cabinet in its meeting held on 24/06/2010 had approved the NMEEE document, and funding for two years of the 11th Plan period (2010 -11 and 2011-12) with an outlay of Rs.235.50 crore.An amount of Rs. 15.00 crore was earmarked in the approved outlay of Rs. 235.50 crore towards augmentation of Bureau of Energy Efficiency (BEE)’s corpus to meet the additional establishment expenditure during 11th Plan.

The NMEEE spelt out four initiatives to enhance energy efficiency in energy intensive industries which are as follows:

  • Perform Achieve and Trade Scheme (PAT) Implementing a market assisted compliance mechanism to accelerate implementation of cost effec¬tive improvements in energy efficiency in large energy-intensive industries
  • Market Transformation for Energy Efficiency (MTEE) Accelerating the shift to energy efficient appliances in specific application through innovative measures such as
    • a. Super Efficient Equipment Programme (SEEP) for Ceiling Fans
    • b. Bachat Lamp Yojana (BLY) for CFLs a LEDs
  • Energy Efficiency Financing Platform (EEFP)Facilitating Financial Institutions to invest in Energy Efficiency Projects and Programmes
  • Framework for Energy Efficient Economic Development (FEEED) Developing fiscal instruments to leverage financing for Energy Efficiency through risk mitigation:
    • a. Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE) and
    • b. Venture Capital Fund for Energy Efficiency (VCFEE) to promote energy efficiency

The Mission seeks to upscale the efforts to unlock the market for energy efficiency which is estimated to be around Rs. 74,000 crore and help achieve total avoided capacity addition of 19,598 MW, fuel savings of around 23 million tonnes per year and green house gas emissions reductions of 98.55 million tonnes per year at its full implementation stage.

The activities during the 11th Plan period created the institutional and regulatory infrastructure.The implementation framework of NMEEE was prepared after extensive stakeholders consultation with relevant Ministries of Government of India, Central Electricity Regulatory Commission (CERC), State Governments, Industry associations such as Federation of Indian Chambers of Commerce & Industry (FICCI), Confederation of Indian Industry (CII), etc., independent experts from academia such as IITs, research organizations, public and private financial institutions, NGOs etc.

Approval Status:

Continuation of NMEEE for the 12th Plan period was recommended by EFC in its two meetings, held on 12/07/2013 and 26/09/2013 with an outlay of Rs. 775 crore . The outlay of Rs. 775 crore includes:

  • (a) Rs. 190 crore for Perform, Achieve and Trade (PAT) scheme
  • (b) Rs. 462.50 crore for Framework of Energy Efficient Economic Development (FEEED) and Energy Efficiency Financing Platform (EEFP) schemes and
  • (c) Rs. 122.50 crore for Market Transformation for Energy Efficiency (MTEE) which includes Rs. 100 crore for Super Efficient Equipment Program (SEEP) for fans and Rs. 22.50 crore for Bachat Lamp Yojana (BLY).

The mission was approved on 6th August, 2014 by the cabinet.

The status of four initiatives of NMEEE is as under:

1. Perform, Achieve and Trade (PAT): In the first cycle of PAT (ending in year 2014-15), 478 industrial units in 8 sectors (Aluminum, Cement, Chlor- Alkali, Fertilizer, Iron & Steel, Paper & Pulp, Thermal Power, Textile) have been mandated to reduce their specific energy consumption (SEC) i.e. energy used per unit of production. The target reduction for each industrial unit is 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. Overall, the SEC reduction targets aim to secure 4.05% reduction in the SEC in these industries totaling an energy saving of 6.686 million tonne of oil equivalent.

Units which are able to achieve SEC level that are lower than their targets can receive energy savings certificates (EScerts) for their excess savings. The EScerts could be traded on the Power Exchanges and bought by other units under PAT who can use them to meet their compliance requirements. Units that are unable to meet the targets either through their own actions or through purchase of EScerts are liable to financial penalty under the Energy Conservation Act. This will be followed by 2nd and subsequent cycles with more number of industrial sectors and units participating with more stringent energy conservation norms and standards.

Large scale consultations with stakeholders of all the 8 sectors at national, regional, state and cluster level was carried out since 2011 onwards. Sectoral technical committees were constituted for each sector with members represented by nominees of respective ministries, sectoral research organizations, industry associations etc. for of establishing the baseline and developing target setting methodology. Baseline energy audit of units under identified sectors has been undertaken.

On 30th March, 2012 energy saving targets for 478 designated consumers belonging to 8 sectors were notified and on 4th June, 2012 the PAT was formally launched. Consultations are conducted regularly post notification at state and sector level to communicate and inform designated consumers about the PAT implementation process, and to seek their views and experiences.

An online portal PAT-Net for submission of online data related to PAT was launched. Bureau of Energy Efficiency (BEE) has prepared Sector Specific Form-1 (annual energy return form) along with Sector specific Normalization Factors to streamline the monitoring and verification (M&V) process. The sector/ sub-sector specific Normalization Factors were developed to neutralize the effects on specific energy consumption (SEC) in the assessment year as well as baseline year so that undue advantages or disadvantages could not be imposed on any DCs while assessing the targets. For development of such factors, Committees/Sub-committees were formed for each sector/sub-sector with representation from DCs as well. Several rounds of meetings were held to identify and develop normalization factors.

BEE has put in place a process of accreditation of Energy Auditors who will be engaged to execute the M&V process of DCs to assess their performances. Preliminary work on the deepening of PAT towards identification of new DCs to be included in the PAT Cycle II has already been started. Development of EScerts trading infrastructure is in process in collaboration with Central Electricity Regulatory Commission (CERC).

The reporting by DCs for 2013-14 shows that:

  • Net Energy Saving achieved up to Mar-2014 by Designated Consumers: 2.54 Million toe
  • For Thermal Power Stations
    • 71 Nos of Thermal Power Plant DCs saved 3.77 Million toe in the year 2013-14.
    • Low PLF/Poor Coal Quality/Unavailability of gas/coal lead to deterioration of 3.77 million toe of Energy w.r.t. the baseline year from 62 Nos of Thermal Power Plant
  • Indicative achievements of PAT targets by 217 Nos of DCs up to Mar-2014
  • 59 Nos of Designated Consumers have indicated better performance
  • 146 Nos of DCs are operating at a SEC higher than baseline SEC/ Heat Rate

A key issue is that the heat rate of few Thermal Power Plant DCs has increased due to low PLF.This would be “normalized” according to technical protocols for the final year

2nd Cycle: Widening and deepening to be completed by September 2015

2.Market Transformation for Energy Efficiency (MTEE): Under MTEE two programmes have been developed i.e. Bachat Lamp Yojana (BLY) and Super-Efficient Equipment Programme (SEEP).

2.1 Bachat Lamp Yojana (BLY):It is a public-private partnership program comprising of BEE, Distribution Companies (DISCOMs) and private investors to accelerate market transformation in energy efficient lighting. Under this program, over 29 million incandescent bulbs have been replaced by CFLs under this programme leading to an avoided generation capacity of 415 MW.

In the next phase of BLY, BEE will promote use of LED lights using the institutional structure of BLY Programme.BEE will provide support to Rural Electrification Corporation (REC)for framing technical specification and monitoring and verification of the energy savings from theLED bulbs distributed under RGVVY scheme to BPL households. BEE will also undertake outreach activities to promote large scale adoption of LEDs.

2.2 SuperEfficient Equipment Programme (SEEP): The other component under MTEE is a new programme called Super-Efficient Equipment Programme (SEEP). SEEP is a program designed to bring accelerated market transformation for super efficient appliances by providing financial stimulus innovatively at critical point/s of intervention. Under this program, LED lights and Super efficient ceiling fans have been identified as the first appliance to be adopted. Both these technologies aim to leapfrog to an efficiency level which will be about 50% more efficient than market average by providing: (a) A time bound incentive to fan manufacturers to manufacture super efficient (SE) fans and sell the same at a discounted price; and (b) enable price reduction in LED lights through bulk procurement followed by labeling. A table showing comparison of bulbs, CFLs and LEDs is attached.

Till date Energy Efficiency Services Limited (EESL) under DSM based Energy Lighting Program (DELP) program, has distributed 25.77 lacs, 7W LED bulbs in Puducherry and Guntur (Andhra Pradesh) which has resulted in an annual savings of 162.53 MU. Furthermore EESL proposed to an additional distribution of 38.26 Lcks LED bulbs with an estimated annual savings of around 235 MU in Anantpur, Srikakulam and West Godavari districts in Andhra Pradesh. In addition, EESL has initiated replacement of inefficient conventional street lights with LEDs in Nashik (70,000), Vizag (90,000), NDMC (20,000). The business model is that EESL invests in the new LED lights upfront and gets paid over a per-determined period from energy savings. LED street lights reduce power consumption by 55-60% as per several demonstration projects implemented by EESL.

For the XII Plan, BEE has proposed SEEP for Ceiling Fans given the rationale that appliances like ceiling fans which has an average life of over 15 years are being deployed in the economy in huge volumes (of the tune of 30-35 million annually). To avoid inefficiency getting locked in economy for its life, this program aims to stimulate technological up gradation and their accelerated introduction by manufacturers through an incentive mechanism which would motivate manufactures to manufacture such super efficient fans and sell at competitive price in a highly price sensitive fans market.

Consultation with main stakeholders of the program such as fan manufactures technology providers, R&D institutions, academia and civil society organizations have been completed. Technical specifications have been finalized. Assessment of testing capacity and development of testing protocols has been completed. Bidding for MVA is in process ,super efficient fans are expected to be in the market by February 2015.

3. Energy Efficiency Financing Platform (EEFP):Under this programme, MoUshave been signed with financial institutions to work together for the development of energy efficiency market and for the identification of issues related to this market development.
MoUs with M/s, PTC India ltd, M/s. SIDBI, HSBC Bank, Tata Capital and IFCI ltd have been signed by BEE to promote financing for energy efficiency projects. BEE has developed training modules in collaboration with HSBC and also conducted trainingprograms for financial institutions on energy efficiency project financing.

4. Framework for Energy Efficient Economic Development (FEEED):Under this initiative two funds have been created viz. Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE) and Venture Capital Fund for Energy Efficiency (VCFEE).

Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE)

Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE) is risk sharing mechanism to provide commercial banks with a partial coverage of risk involved in extending loans for energy efficiency projects. The amount paid out will be equal to the agreed-upon percentage of the outstanding principal and will not cover the interest or other fees owed to the bank. The Guarantee will not exceed Rs 3 crores per project or 50% of loan amount, whichever is less. Initially the support was provided to only government building and municipalities; however, in the twelfth plan it has been extended to cover SMEs and industries too.
Rules for operationalization of Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE) were approved in April 2012, subsequent to which Supervisory Committee for PRGFEE has been constituted. Bidding for implementing agency was carried out after cabinet approval for NMEEE in August, 2014, but was not successful.Re-bidding for hiring Implementing agency is under process.

Venture Capital Fund for Energy Efficiency (VCFEE)

The Venture Capital Fund for Energy Efficiency (VCFEE) is a fund to provide equity capital for energy efficiency projects. A single investment by the fund shall not exceed INR 2 Crores. The Fund shall provide last mile equity support to specific energy efficiency projects, limited to a maximum of 15% of total equity required, through Special Purpose Vehicle (SPV) or INR 2 Crores, whichever is less. The support under VCFEE is limited to Government buildings and municipalities.
Rules for operationalization of Venture Capital Fund for Energy Efficiency (VCFEE) were approved in April 2012, subsequent to which Board of Trustees has been constituted for VCFEE Trust. Process for hiring Fund Manager has commenced. Expected operationalization by February, 2015.






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