Energy Efficiency Initiatives in India under National Mission for Enhanced Energy Efficiency: An Analysis of the Perform, Achieve, and Trade Scheme

Energy efficiency is a need of the hour for mitigating climate change and promoting sustainable development. Being one of the largest energy consumers in the world, India has the dual challenge of satisfying its increasing energy requirements while also fulfilling its climate commitments under the Paris Agreement. To address these challenges, the Government of India launched the National Mission for Enhanced Energy Efficiency (NMEEE) in 2010 with the objective of promoting market-based mechanisms for improving energy efficiency. It focuses on unlocking energy efficiency potential through innovative business models, regulatory, and institutional frameworks. Among the four components of NMEEE, the Perform, Achieve, and Trade (PAT) scheme is one of the major green initiatives that focus on energy-intensive industries. It is based on a market-based approach to enhance energy efficiency by targeting energy-intensive industrial sectors. The program aligns industrial growth with environmental stewardship by addressing the energy efficiency gap and promoting technological innovation. An attempt has been made in this paper to critically evaluate the PAT scheme’s implementation across its first five cycles, focusing on its contributions to reducing energy intensity and enhancing industrial competitiveness. It has been found that the PAT scheme has been successful in saving 25.77 Mtoe of energy till its fifth cycle. Furthermore, the DISCOM sector has failed to achieve the total energy-saving target for the first five cycles, with an achievement rate of 65 percent. Despite the significant achievements of the scheme, it has also been found that there are several institutional and market challenges, such as inadequate and uneven target-setting across sectors, oversupply of Energy Saving Certificates (ESCerts), and weak compliance and data validation mechanisms.