Industry can now trade Energy Savings Certificate on Power Exchanges

Energy-efficient units can sell these certificates to those that couldn't meet energy saving targets

Energy Savings Certificates, introduced in 2013 by the Bureau of Energy Efficiency (BEE), have received the regulator’s nod for being traded on a separate market platform. BEE in 2013 launched tradable certificates for industries which achieved energy efficiency standards. Titled ‘Perform, achieve and trade’, the scheme aimed at major sectors such as thermal power generation, cement, fertiliser, aluminium, iron and steel, pulp and paper. These cover 65 per cent of the electricity consumed by industries.

These industries were given targets for reducing energy consumption. Over-achievement by a certain commercial unit is converted into tradable 'Energy Savings Certificate' at the end of the targeted year, which it can sell to the ones that couldn't achieve the targets.

Taking a suo-moto stand on the matter, Central Electricity Regulatory Commission (CERC) issued a Gazette notification allowing trade of Energy Trading Certificates at the power exchange platforms.

The pricing of the certificates would be as per the Energy Conservation Rules. The rules prescribe that one certificate shall be equal to the energy consumed in terms of one metric tonne of oil equivalent (mtoe). "The market price of the certificates shall be as discovered through the process of bidding at the respective power exchange," said CERC in the notification.

The power exchanges would aggregate all the buy bids and the confirmed sell bids and determine the market clearing price and the market clearing volume and the transaction results shall be published on the website of the concerned Power Exchange.