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Trading of ESCerts on Power Exchanges

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NAPCC

National Solar Mission

National Mission for Enhanced Energy Efficiency (NMEEE)

Perform, Achieve, Trade (PAT)

Market Transformation for energy efficiency

Energy Efficiency Financing Platform

Framework for Energy Efficient Economic Development

National Mission on Sustainable Habitat

National Water Mission

National mission for sustaining the Himalayan Ecosystem

National Mission for a Green India

National Mission for Sustainable Growth

National Mission for Strategic Knowledge for climate

Genesis of PAT scheme - NAPCCNational Action Plan on Climate Change

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BEE

MoP

State Designated

Agency

Energy Auditor

Power Exchange

Designated Consumer

Stakeholders under the PAT scheme

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PAT Sector wise Energy Consumption and Targets under Cycle – 1 ( 2012 – 2015)

Specific Energy Consumption (SEC) = net energy input into

the designated consumers boundary / Total qty of output

exported from the designated consumers’ boundary

Sr # Sector # of DCs in Cycle 1 Targets under Cycle – 1

(million TOE)

1 Aluminium 10 0.456

2 Cement 85 0.816

3 Chlor-Alkali 22 0.054

4 Fertilizer 29 0.478

5 Iron & Steel 67 1.486

6 Pulp & Paper 31 0.119

7 Textile 90 0.066

8 Thermal Power Plants 144 3.211

Total 478 6.686

Source: BEE

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• Baseline Specific energy consumption (SEC)

• Target SEC

Set Targets

• Under achievement

• Over achievement

Monitoring and Verification • Market based

trading on Power exchanges

Trading of Escerts

Reward over achiever

Penalize under performer

MARKET BASED MECHANISM

PAT is a market based mechanism designed to enhance energy efficiency

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Power Exchanges will provide the trading platform for ESCerts

Saving Target

Baseline SEC

Target SEC

Achieved SEC

Scenario 1

Scenario 2

Compliance

Issued Escerts

Purchase Escerts

Penalty

Energy Saving Certificates (ESCerts) issued by Ministry of Power/BEE

1 ESCert = 1 ton of oil equivalent of (toe) energy saving achieved by

the designated consumer, over and above the target savings.

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ESCert Snapshot

• MandatoryCompliance

• Designated ConsumersTarget Entities

• Industries not achieving targetBuyers

• Industries achieving beyond targetSellers

• 6.6 million toe for 1st CycleTarget

• Cap and TradeMechanism

• 3 yrsPhase Cycle

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ESCert Snapshot

• 1 ESCert = 1 MTOE (Metric Tonne of Oil Equivalent

ESCerts

• Power Exchange only*Trading Platform

• To be finalized (Once a month)*Trading Frequency

• Double Sided Closed Auction*Price Determination

• As per Energy Conservation Act, 2001 (Link with market value of oil equivalent)

Penalty

• Allowed for two consecutive cycles*Banking

• 3 Years for DCsCompliance Period

* proposed

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ESCerts: Proposed Exchange Trading Mechanism

ESCerts will be held in electronic form

Registered with a depository

System Registry would maintain record of all transactions

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ESCerts: Proposed Exchange Trading Mechanism

IEX would be a one stop shop for buying and selling:

1. ESCerts

2. Renewable Energy Certificates

3. Electricity

DCs would have choice of becoming a member on the

exchange or client of the member of the exchange

Financial settlement will be through electronic bank interfaces

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ESCert Proposed Exchange Trading Mechanism

Seller Buyer

IEX

Bank A/c

Deposit fund for trading

Confirm Margin Requirement

Sub

mits B

id fo

r tradin

g

Bids are accumulated

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ESCert Proposed Exchange Trading Mechanism

Seller Buyer

Participants

IEX

Bank A/c

MCV & MCP calculated post bidding session

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ESCert Proposed Exchange Trading Mechanism

Seller Buyer

Participants

IEX

Bank A/c

Invoice/ Credit Note

FinancialSettlement

through Bank A/c ESCerts

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Why Electricity Exchanges for ESCerts

Transparent & efficient platform

Electronically accessible market place

Well established spot market for electricity & RECs

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Thank You !!!www.iexindia.com