Context: A recent report by the New Delhi-based non-profit Centre for Science and Environment (CSE) revealed that Perform, Achieve, Trade (PAT) is not effective.

• The report attributed the inefficiency of the scheme to non-transparency, loose targets and overlooked deadlines.

About Perform, Achieve, Trade (PAT)

• The Perform, Achieve, Trade (PAT) scheme was established by the National Mission for Enhanced Energy Efficiency.
• NMEEE is one of the eight national missions under the National Action Plan on Climate Change (NAPCC) launched by the Government of India in the year 2008.
• The Union Ministry of Power and Bureau of Energy Efficiency were entrusted with the task of preparing the implementation plan for the NMEEE.

Working of the scheme

• PAT is a market-based compliance mechanism to accelerate improvements in energy efficiency in energy-intensive industries.
• The energy savings achieved by notified industries is converted into tradable instruments called Energy Saving Certificates (ESCerts).
• The ESCerts after issuance by the Bureau of Energy Efficiency are traded at Power Exchanges.

What is PAT cycle?

• The government shortlists industries and restricts the amount of energy they can consume and defines a time limit of three years by when this restriction should be met as part of PAT.

These three years of time are called one PAT cycle.

• The industries are chosen after in-depth, sector-wise analysis by the government.
• Industries that participate in this scheme are called designated consumers (DC).
• Those that overachieve their targets are issued energy savings certificates (ESCerts) that can be traded with industries that have not achieved their targets.
• Non-achievers have to buy the ESCerts after the three years for compliance.

Various PAT cycles

PAT covered about 13 energy-intensive sectors

• Sectors included are thermal power plants (TPP), cement, aluminium, iron and steel, pulp and paper, fertilizer, chlor-alkali, petroleum refineries, petrochemicals, distribution companies, railways, textile and commercial buildings (hotels and airports)
• Announcements for six cycles since 2012 have been made so far.