Unleashing Market-Based Approaches to Drive Energy Efficiency Interventions in India: An Analysis of the Perform, Achieve, Trade (PAT) Scheme
A lack of clarity at the policy level and operational anomalies could generate dampening effects on future energy efficiency investments.
To sustain the high economic growth trajectory of India, it is imperative that an adequate supply of energy is maintained over a long period of time. One such major initiative is the thrust laid on energy efficiency interventions as a low-hanging option for meeting the overarching energy and climate goals of the country. We analyze market-based approaches for energy efficiency interventions, with a specific focus on the Perform, Achieve and Trade (PAT) scheme. Policies governing energy efficiency interventions reveal that policies have evolved over three different phases characterized by a gradual transition from a regulatory regime to a market-based arrangement. Analysis of the PAT scheme points to the fact that while the scheme is designed in a dynamic manner and has huge energy-saving potential, a lack of clarity at the policy level and operational anomalies could generate dampening effects on future energy efficiency investments. Policy streamlining becomes imperative for successful implementation of this scheme.
WORKING PAPER NO: 1177