Energy Audit By Industries To Be Made Mandatory By Year-End

The Union power ministry is giving a final shape to the long-pending draft energy conservation bill that will make energy audits mandatory, Bhasker Natarajan, director of Energy Management Centre, which functions under the ministry, said yesterday.

The draft bill will be placed before the cabinet soon, he said while addressing a national workshop on energy conservation and environmental protection. The law is likely to be enacted by the end of this year, he added.

The workshop is being organised by the Confederation of Indian Industry (CII).

Under the new law, industries and other large consumers would be required to compulsorily carry out audits of their energy consumption levels.

 

The Centre had earlier attempted to make the state governments voluntarily opt for energy audits by March 31. But, the response had been poor, with only Tamil Nadu, Kerala, West Bengal and Delhi complying so far. Other states, however, will be forced to follow suit once the legislation is passed.

The finance ministry is considering withdrawing the 100 per cent depreciation it had allowed for energy economisers and heat recovery systems, equipment crucial for such audits.

It has been proposed to bring down depreciation benefits to 50 per cent due to misuse of the facility, Natarajan said.

He said the bill in its current form has been watered down considerably, particularly the penalty clauses. For instance, the earlier draft had provided for the arrest of the companys chief executive officer (CEO) for flouting energy consumption norms.

The current version, however, calls for closure of units after the 10th violation.

Another important feature of the legislation is the concept of `energy labelling for power-intensive equipment.

Electrical appliances like refrigerators and geysers will be asked to stick labels indicating its consumption level as against a benchmark standard. Accordingly, they will be given star ratings.

The legislation would not confine itself to electricity, but cover all other energy sources, including non-conventional sources, Natarajan said.

Natarajan said the Centre had proposed to promote 20 `lead agencies in each state through the private sector, to provide cost-efficient energy audit services to the corporate sector.

Dismissing fears in industry about the costs involved in energy audits, Natarajan said they have come down from about Rs 50,000 to Rs 5,000 in the four states where it has been made compulsory.

Regarding Asian Development Banks (ADB) initiatives in energy conservation and environment protection, C S Chung, its representative, said although subsidies will be crucial for the success of the energy audit programme, the government no longer favours the idea. These will have to be promoted by incentives, he said.

He said the ADB had financed nearly $2.4 billion for the energy sector in the country during the last decade.

Venu Srinivasan, chairman, CII southern region, said about 145 audits have been completed in Tamil Nadu, resulting in an annual saving of about Rs 300 crore to industry.