As the country is facing energy deficiency, the ministry of power has planned cost-effectiveness mechanism focusing on the eight designated industrial sectors, with an investment requirement of Rs. 30,000 crore over three years under an energy efficiency programme.

“The main aim is to save energy by five percent,” power secretary P Uma Shankar told reporters on Thursday in New Delhi.

“It is something similar on the lines of the carbon trading. The think is that both carbon trading and perform, achieve & trade (PAT) seek to achieve cost efficiency,” Shankar said.

“PAT will start in April 2011 and is likely to result in savings of 10 million metric ton of oil equivalent energy. It is a continuous process and not one – off process,” he added.

Government has also planned large number of interactions with the industries to achieve energy efficiency objectives. “We will have six consultations at the metro level and subsequently intensive 53 consultations across the country,” Shankar said. 

The power secretary also added that payback on the investment would be very fast. “Companies can save about Rs 20,000-30,000 crore every year after three years.”

The power ministry has also planned to penalise companies if they fail to implement such programmes. “It is mandatory for these eight industrial sectors to be a part of this scheme, which may have to pay Rs 10 lakh for non-compliance and shortage of energy target that was not achieved,” Ajay Mathur director general of the bureau of energy efficiency (BEE) said. 

The eight industrial sectors which will have to implement energy saving mechanism are – thermal power plants, fertilizer, cement, pulp and paper, textiles, chlor-alkali, iron and steel and aluminium.

“We plan to include more industries after three years,” Mathur pointed out.

The power ministry will also issue energy-saving certificates to designated consumers (DC) that achieve target reduction during the stipulated time of three years. One certificate will be valued at one tonne oil equivalent and will be traded on the energy exchange.

The industrial energy efficiency scheme comes under the national mission for enhanced energy efficiency (NMEEE), one of the missions set by the Prime Minister’s national action plan on climate change (NAPCC) set in June 2008.