06-Jul-16 1 Perform Achieve & Trade Inclusion of Petroleum Refineries into PAT Cycle - II by Milind Deore, Energy Economist, BEE Delhi 5 th July 2016 Perform, Achieve and Trade (PAT) National Action Plan on Climate Change (NAPCC) – Nation Mission for Enhanced Energy Efficiency (NMEEE) Perform, Achieve and Trade (PAT) Market Transformation for Energy Efficiency (MTEE) Energy Efficiency Financing Platform (EEFP) Framework for Energy Efficient Economic Development (FEEED)
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06-Jul-16
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Perform Achieve & Trade
Inclusion of Petroleum Refineries into PAT Cycle - II
byMilind Deore, Energy Economist, BEE
Delhi
5th July 2016
Perform, Achieve and Trade (PAT)
National Action Plan on Climate Change (NAPCC)– Nation Mission for Enhanced Energy Efficiency
(NMEEE) Perform, Achieve and Trade (PAT)Market Transformation for Energy Efficiency (MTEE) Energy Efficiency Financing Platform (EEFP) Framework for Energy Efficient Economic Development
(FEEED)
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Perform Achieve and Trade (PAT): A regulatory instrument to reduce specific energyconsumption in energy intensive industries, with an associated market based mechanism toenhance the cost effectiveness through certification of excess energy saving which can betraded.
Genesis of PAT
20012014-15
Energy Conservation Act enacted
National Action Plan on Climate Change released
Sector studies Commenced toidentify DCs
Baseline datacollection begins
Financial outlay ofover Rs. 235 croresapproved
National Mission for Enhanced Energy Efficiency (NMEEE) Approved by Ministry of Power
Nation wide Consultation Workshops organised;consultation continues through 2012
NMEEE approved by Prime Minister's Councilon Climate Change
Energy Conservation Actamended to make provisions for issue of energy saving certificates, imposition of penaltyfor non compliance and tradingof ESCerts
Perform, Achieve and Trade(PAT) scheme came into effect;first compliance period begins (2012-2015)
2008 2009 2010 2011 2012
Target Year PAT Cycle I
Consultations on Target setting methodology and targets
9 Refinery NA 18 1810 DISCOMS NA 44 4411 Railway NA 22 22Total 621
PAT Cycle IIBaseline Year: 2014-15PAT Cycle 2016-2019Assessment Year: 2018-19
Total Energy Consumption from 11 sectors 227 mtoe
National Target = 8.869 mtoe at the end of 2nd PAT Cycle (by 2018-19)
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• Deepening of PAT (existing sectors): Inclusion of more units from existing sectors – 89 DCs from (I&S, P&P, Cement, TPP, Chlor-Alkali, Fertilizer and Aluminum and
Textiles)• Widening of PAT: Inclusion of more units from new sectors
– New sectors: Refinery, Railways and Electricity DISCOMS– 84 new DCs
PAT- Way forward (PAT Cycle II)
PAT Cycles No. of Units Share of total energy consumption (2009-10 Level)
Sectors covered
Cycle I (2012-13 to 2014-15) 478 DCs 36% 8
Cycle II (2016-17 to 2018-19) 621 DCs 50% 11
PAT- Salient features
• Regulatory instrument linked with market mechanism- Certification of energy saving
• Relative responsibility - Less target for more efficient and more for less efficient
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Institutional Structure
SERCs
Process Flow for Issuance of ESCerts
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PAT Cycle I Experience
• Amendments in the EC Act• Requires changes in the timelines
– Notified timeline for comprehensive monitoring, reporting and verification was extended
• Deadline for submission of Performance Assessment Document extended by 45 days
• Need to link Inspection Rules, 2010 with Check verification under PAT to increase the domain of SDAs in the process of check verification
• Capacity of stakeholders– Need for building of Capacity of AEAs/SDAs/BEE desired
PAT Cycle I Experience
• Removal of rules related to early issuance of ESCerts– No DCs applied for early issuance– Proposal for rolling cycle
• Changes in the target setting methodology– To factorize the historical trend of sectoral efficiency improvement– National Policy objectives– Recognition of Global best sector/DCs
• Changes in the baseline setting methodology– To accommodate the variations in capacity utilization – Single year based baseline fixation
• Normalization factors – Need to provide legal sanctity to normalization factors
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13
31st Dec
M&V Phase
Scrutiny Phase
1st April 31st July
45 Days 2 months 45 Days
M&V-Submission of FORM I, Form A,B, SectoralProform and M&V report
SDA’s Scrutiny BEE’s
Scrutiny BEE’s recommendation to Central Government
Issue of ESCerts andTrading
Compliance Phase
28th Feb
2 months/ Period specified by CERC
1 month
31st March
FORM DSubmission
Key Timelines: Revised
Normalization
“Normalisation” means a process of rationalization of energy and production data of Designated Consumer to take into account changes in quantifiable terms that impact of energy performance under equivalent conditions’.
• It is a streamlining process by which any DC is not subjected to undue advantage or disadvantage due to factors beyond the control of the DC
Process– Formation of sectoral/sub-sectoral technical committee– Consultation with stakeholders– Identification of factors– Integration with reporting format - proforma– Validation with real data
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PAT- Way forward (PAT Cycle II +)
478
BY:2007-10AY:2014-15
621
BY:2014-15AY:2018-19
PI PII
230+2
Sectors (1500-2000)
BY:2015-16AY:2019-20
PIII
2012 2016 2017
Left Over in existing sector
+New
Sectors
BY:2016-17AY:2020-21
PIV
2018
Left Over in existing sector
+New
Sectors
BY:2017-18AY:2021-22
PV
2019
621+Left Over in existing sector
+New
Sectors
BY:2018-19AY:2022-23
PVI
2020
230+Left Over in existing sector
+New
Sectors
BY:2019-20AY:2023-24
PVII
2021
Inclusion of Petroleum Refineries into PAT Cycle - II
Power plants to up-grade bottom of the barrel for maximize profitability
Rationale for selecting Refinery sector
• The Energy Conservation (EC) Act, 2001 empowers the CentralGovernment to establish and prescribe energy consumptionnorms for Designated Consumers (DCs)
• Energy Intensive Industries listed into the schedule of the ECAct, 2001.
• High Energy Saving Potential• Prime Minister’s Council on Climate Change directed to
include Petroleum Refineries, DISCOMs and Railways into PATscheme
• Energy cost is major head and directly impacts on margins• Established institutional structure for energy efficiency
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1. Aluminium;
2. Fertilizers;
3. Iron and Steel;
4. Cement;
5. Pulp and paper;
6. Chlor Akali;
7. Sugar;
8. Textile;
9. Chemicals;
10. Railways;
11. Port Trust;
12. Transport Sector (industries and services);
13. Petrochemicals, Gas Crackers, Naphtha Crackers and Petroleum Refineries;
14. Thermal Power Stations, hydel power stations, electricity transmission companies
and distribution companies;
15. Commercial buildings or establishments;
Schedule of the EC Act, 2001
Energy consumed in refining processes :1. Direct Fuel : fired in process heaters, for high temp. heat requirement
in the process. 2. Indirect Fuel: utilities, consumed in the process, are produced thru’ on-
site captive generation, which in turn requires fuel (known as ‘indirect fuel’ for the process)
Steam : - process heating (within steam temp), tracing etc. - steam jet ejectors for maintaining vacuum- as inert for stripping (partial pressure reduction) - turbine drives
Power: - motor drives for pumps / compressors , conveyors etc.- for illumination
Cooling Water: - for condensing vapors- for cooling products before storage
Hydrogen: - as reactant, for hydro-processing reactions -- to get clean fuel products, meeting stipulated quality.
Energy Performance Indicator
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– Specific Energy Consumption written shortly as SEC or MBN (MBTU/Bbl/NRGF)
– It is measure of Energy Efficiency of a Refinery.
– MBN is calculated by Refineries in India as per the methodology advised by CHT using the energy factors developed by CHT for individual units.
– MBN calculation takes care of the complexity of a Refinery. Hence, it can be used for comparing different Refineries having different complexities.
– MBN helps in monitoring the Energy Performance of any Refinery over a period of time.
– MOP&NG awards Refineries having lowest MBN every year.
Relative Responsibility: Less target for more efficient & higher target for in-effficient unit.
Strategies for Energy Conservation in refineries
• Three broad categories • Process specific • Equipment oriented • General
• Monitoring & audit of operations
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Strategic Planning
Process Specific Equipment Related General Preheat
Improvement Power Recovery Flare Gas Recovery Anti-surge
control, etc
Efficiency improvement of Fired Heaters
Heat exchanger performance improvement
Distillation column performance improvement
Air Fan coolers performance efficiency improvement
Optimization of Steam System Proper insulation of Steam Network &
Minimizing Steam venting Efficient use of Steam-traps &
Condensate Recovery System Regular Steam trap audit Optimizing hydrogen management
through pinch approach Fugitive emissions survey for passing of
PSVs and control valves Provision of flare meters in major units
for better management of flare loss Provision of double seal in floating roof
tanks for reducing fugitive emissions
Monitoring & audit of operations
Established robust energy measuring and monitoring system Energy Audit / Energy Performance Survey Performance Bench-marking
Major Obligations for DCs
• DCs to appoint or designate energy managers who shall be incharge of activities for efficient use of energy and itsconservation (clause 14(l)).
• The information with regard to energy consumed (clause14(a)) in Form 1
• Get energy audits conducted by accredited energy auditors• Implement techno-economic viable recommendations• Comply with norms of specific energy consumption• Submit report on steps taken