Why Energy Conservation Act, 2001 enacted?
The magnitude of energy consumption has always been taken as an
indicator of development status of any economy. However, what actually
a country requires is not energy per se but the services that energy
provides. A nation can increase the service by keeping the same
inefficient device and pump in more energy. More energy will positively
not accelerate the economic growth as long as economy has high-energy
intensity. India's energy intensity per unit of GDP is higher by
3.7 times of Japan, 1.4 times of Asia and 1.5 times of USA, indicating
to very high energy wastage. In the globalized economy, countries
with high energy intensity may become uncompetitive due to high
energy input cost. Therefore, energy cost reduction must become
one of the important benchmarks for economic success. Efficiency
in consumption of energy and its conservation would be one of the
most important means of energy cost reduction and also for meeting
future energy demand.
There is a huge scope of energy saving in the country. Various studies
undertaken suggest substantial energy saving potential in industrial,
commercial and domestic sector. Efficient use of energy provides
the least cost and environmentally friendly option for capacity
creation in the shortest time frame. Energy efficiency also assumes
further importance as "one unit of energy saved at consumer
end, avoids 3 units of fresh capacity addition".
With the background of high energy saving potential and its benefits,
bridging the gap between demand and supply, reducing environmental
emissions through energy saving, and to effectively overcome the
barrier, the Government of India has enacted the Energy Conservation
Act 2001. The Act provides the much-needed legal framework and institutional
arrangement for embarking on an energy efficiency drive.
Under the provisions of the Act, Bureau of Energy Efficiency has
been established with effect from 1st March, 2002. The Bureau would
be responsible for implementation of policy, programmes and coordination
of energy conservation activities in the country.
Definitions:
"energy" means any form of energy derived
from fossil fuels, nuclear substances or materials, hydro-electricity
and includes electrical energy or electricity generated from renewable
sources of energy or bio-mass connected to the grid;
"energy manager" means any individual
possessing the qualifications prescribed under clause (m) of section
14
"energy audit" means the verification,
monitoring and analysis of use of energy including submission of
technical report containing recommendations for improving energy
efficiency with cost benefit analysis and an action plan to reduce
energy consumption;
"Energy Management Centre" means the
Energy Management Centre set up under the Resolution of the Government
of India in the erstwhile Ministry of Energy, Department of Power
No. 7(2)/87-EP (Vol. IV), dated the 5th July, 1989 and registered
under the Societies Registration Act, 1860;
"designated consumer" means any consumer
specified under clause (e) of section 14;
"Bureau" means the Bureau of Energy Efficiency
established under subsection (l) of section 3
List of Energy Intensive Industries and other establishments
specified as designated consumers
- Aluminium
- Fertilizers
- Iron and Steel
- Cement
- Pulp and paper
- Chlor Akali
- Sugar
- Textile
- Chemicals
- Railways
- Port Trust
- Transport Sector (industries and services)
- Petrochemicals, Gas Crackers, Naphtha Crackers and Petroleum
Refineries
- Thermal Power Stations, hydel power stations, electricity transmission
companies and distribution companies
- Commercial buildings or establishments
The Energy Conservation
Act, 2001
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