PAT Scheme stands for Perform, Achieve, and Trade. It is a regulatory tool introduced by the Bureau of Energy Efficiency (BEE) in July 2012. It works to reduce specific energy consumption in energy-intensive industries. It also has a market-based mechanism to raise cost-effectiveness by certifying extra energy savings that can be traded. Perform, Achieve, and Trade (PAT) reduces Specific Energy Consumption (SEC) in energy-intensive businesses, along with a market-based method to improve cost-effectiveness through certification of excess energy savings that can be traded.

This topic of ‘The PAT Scheme’ is important from the perspective of the UPSC IAS Examination, which falls under General Studies Paper 2 and 3 (Mains) and General Studies Paper 1 (Preliminary), particularly in the Governance and Economic Development section of UPSC IAS EXAM. 

This article will discuss ‘PAT Scheme’ and learn about Perform, Achieve, and Trade Scheme, Its background, Objectives, Target, Implementation, & More.

Latest News about the PAT Scheme

A report released in December 2021 by the non-profit Centre for Science and Environment (CSE) in New Delhi revealed that the Perform, Achieve, Trade (PAT) model could be more effective.

The report cited inefficiency in the Perform, Achieve, and Trade scheme due to a lack of transparency, arbitrary goals, and missed deadlines.

What is PAT Scheme?

PAT full form is Perform, Achieve, and Trade and is part of the National Mission on Enhanced Energy Efficiency (NMEEE). Perform, Achieve, and Trade Scheme is a regulatory instrument that aims to reduce Specific Energy Consumption (SEC) in energy-intensive industries. It involves a market-based mechanism to improve price by certifying extra power savings that can be traded.

The Goal of the PAT Scheme

The primary goal of the Perform, Achieve, and Trade scheme is to increase the energy efficiency of India’s industrial sectors while simultaneously reducing greenhouse gas emissions.

Objectives of the PAT Scheme

Objectives of the Perform, Achieve, and Trade Scheme are as follows:

• To reduce specific energy consumption in India’s energy-intensive sectors.
• To increase energy efficiency.
• To increase cost-effectiveness by certifying excess energy savings that can be traded.
• To reduce CO2 emissions from thermal power plants as well as coal-fired power plants.
• As a result, the energy reduction target should be tightened to meet India’s global climate commitments to reduce greenhouse gas emissions.

Controlling Ministry of PAT Scheme

The Bureau of Energy Efficiency (BEE) of the Ministry of Power is the nodal agency for implementing the Perform Achieve Trade (PAT) scheme.

About BEE

Here are some key facts about the Bureau of Energy Efficiency (BEE):

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Implementation of the PAT Scheme

• The Notification designating the Industries is issued at the start of each PAT Cycle, normally on March 31st.
• PAT Cycles are valid for three years from the date of notification.
• The notification provides information about the specific energy consumption (SEC) of DC in the baseline year and the target for SEC reduction by the end of the PAT Cycle.
• Issuance of the notification: Each designated industry, technically known as a Designated Consumer (DC) under the EC Act, must submit an Action Plan and Form -1 within three months of being designated as a DC.
• As a result, DC must complete its Mandatory Energy Audit (MEA) within 18 months of being notified as a designated consumer.

PAT Cycle I

In the first cycle, the Perform, Achieve, and Trade scheme (Cycle 1) targeted energy-intensive industries (2012-13 to 2014-15). Aluminum, fertilizer, thermal power, cement, iron and steel, textiles, Chlor-alkali, and pulp and paper are among the industries.

• 478 Designated Consumers (DCs) from the eight energy-intensive sectors were selected for PAT Cycle 1.
• The total volume of ESCerts traded in “PAT cycle I” was approximately 13 lakhs, resulting in approximately INR 100 crores in business.
• The target for the PAT Cycle 1 was 6.686 million tonnes of oil equivalent (MTOE).
• The first cycle of the PAT scheme achieved 8.67 MTOE in energy savings, which exceeded the target by 30%.
• PAT Cycle 1 energy savings means avoiding approximately 31 million tonnes of CO2 emissions.

Achievement of PAT Cycle 1

Source: Ministry of Power

PAT Cycle II

PAT cycle 2 added three new industries: railways, refineries, and electric distribution companies (DISCOMs).

• PAT Cycle 2 began on April 1, 2016, and concluded on March 31, 2019.
• The PAT Cycle 2 target was 13.38 million tonnes of oil equivalent (MTOE).
• The second cycle of the PAT scheme saved 13.28 MTOE in energy, falling 0.7% short of the target.

Achievements of PAT Cycle 2

Source: Ministry of Power

PAT Cycle III

PAT cycle 3, 116 DCs were chosen from six industries: thermal power, aluminium, cement, pulp and paper, iron and steel, and textiles.

• The third PAT cycle began on April 1st, 2017.
• PAT cycle -3 aimed to reduce overall energy consumption by 1.06 MTOE, with targets communicated to 116 Designated Consumers from six sectors.
• PAT Cycle -3 was completed on March 31, 2020, and its implementation resulted in energy savings of 1.745 MTOE.

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PAT Cycle IV

106 DCs were notified, with a target energy consumption reduction of 0.6998 million tonnes of oil equivalent.

• The fourth PAT cycle began on April 1, 2018.
• DCs came from eight industries, including six from the PAT cycle -I and two new ones, namely petrochemicals and commercial buildings (Hotels).
• The assessment period for these DCs was from April to July 2021, but it was extended to April to July 2022 due to the COVID-19-related pandemic.

PAT Cycle V

PAT cycle 5 notified 110 DCs from the existing PAT sectors of Aluminum, Cement, Chlor-Alkali, Commercial Buildings (Hotels), Iron & Steel, Pulp & Paper, Textile, and Thermal Power Plants.

The fifth PAT cycle began on April 1st, 2019.

The expected energy consumption of these DCs is 15.244 MTOE, with a total energy savings of 0.5130 MTOE.

PAT Cycle VI

PAT Cycle 6 notified 135 DCs from six industries: cement, commercial buildings (hotels), iron and steel, petroleum refinery, pulp and paper, and textiles.

• The sixth PAT cycle began on April 1st, 2020.
• A total energy saving of 1.277 MTOE is expected to be attained with PAT cycle 6.
• To meet their notified targets, 135 DCs implement various energy efficiency measures.

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PAT Cycle VII

PAT cycle 7 was notified in October 2021 for 2022-23 to 2024-25, involving 509 DCs and an overall energy-saving target of 6.627 MTOE.

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Sectors Covered under PAT Scheme

Currently, the Perform, Achieve, and Trade Scheme covers 846 designated consumers (DCs) in 13 sectors, including.

• Thermal Power Sector
• Aluminum Sector
• Cement Sector
• Fertilizers Sector
• Iron and Steel Sector
• Pulp and Paper Sector
• Textiles Sector
• Railways Sector
• Chlor-alkali Sector
• Distribution Companies
• Refineries Sector
• Commercial Buildings (Hotels) Sector
• Petrochemicals Sector

PAT Scheme: Energy Savings Certificates (ESCerts)

Energy Savings Certificates (ESCerts) are tradable certificates. These are issued to energy-efficient industrial units that exceed their energy savings targets. 

• Energy Savings Certificates (ESCerts) can be traded between energy-efficient units and energy-intensive units. 
• The price of Energy Savings Certificates (ESCerts) is determined by the market.
• Energy-intensive units have to achieve a certain energy savings target each year. If an energy-intensive unit exceeds its target, it can earn Energy Savings Certificates (ESCerts).
• Energy-efficient units can buy Energy Savings Certificates (ESCerts) from energy-intensive units that have exceeded their targets.
• ESCerts can be traded through two power exchanges: 
  • the Indian Energy Exchange (IEX) and 
  • the Power Exchange India Limited (PXIL).
• Industries that take part in the PAT Scheme are referred to as designated shoppers (DC).

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