PAT Advisory and ESCerts TradingEnergy service offering for DCs under Perform, Achieve and Trade Mechanism

About PAT• PAT – Perform Achieve and Trade – a Regulation of Government of India

• Seeks to regulate energy usage in your organization – mandates by statute improvement in energy efficiency

• Immediately impacts 8 sectors of the Indian Economy

• Notified on 30th March,2012

PAT – what is at stake?• The units under PAT have been identified as a Designated Consumer as per Energy

Conservation Act 2001

• As per PAT rules such units will have to reduce their SEC (specific energy consumption) by 2014-2015.

• Govt. of India has already notified a SEC target for the unit.

• The organization has to plan energy reduction measures, finance the implementation of measures to reach the target.

• Shortfalls will attract penalty. Surplus can lead to financial upside.

Elements in PATThere are 5 important elements in PAT which we need to understand……….

Principle and

Motivation

Liabilities/Penalties/Upsides

Baseline/Targets Audits and

checks

Documentation and Reporting

reqmts

PAT Approach for DCs•Needs

understanding of financial exposure and opportunity

•Strategy, Plan and capital provisioning

CxOs - Financial and Strategy

Officers

•Collecting and Providing energy data points

•Providing energy insights into processes

•Preparing CapEx plan

Internal Energy/ Environment

Officers

•Own Apportioned Departmental SEC improvement plans

•Deployment of SEC improvement measures

Operational in charges

Strategic advisory support

for integrated pursuit of climate/energy opportunities

Managing engagement

with verifier, scheme administrator

Compliance support filing, preparation of

forms, design document etc.

Market support

Sourcing climate & PAT finance, Trading ESCerts

Internal Organizational Functions External Assistance and Support

Our PAT Advisory and ESCerts trading service provide the external assistance and support to help a DC achieve optimal PAT performance

Steps Required• Goal setting: To be undertaken by DC based on PAT targets

• Reduction phase: cycle wide leading to the target year

• Trading phase: at the end of financial year (s)

• Linked benefits assessment for collateral advantage– Is there any significant collateral energy/environment commodity generation which

can be obtained from the measures which are to be deployed?

– Can the collateral energy/environment commodities be leveraged for raising the required capital for the interventions?

PAT – requires optimal performance planning

To comply - is the overarching goal

Business Considerations – May make DC settle for shortfall or aim for excess. Minimizing the impact of shortfall and maximizing the impact of excess is desirable.

For optimal performance – weighing various options from financial, technical and regulatory perspective is essential

Comply

Manage Shortfall

Pay Penalty

EScert Procurement

Exceed Target Transact (trade) and realize Value

Advantage RSM GC• RSM GC’s knowledge of PAT rules, climate and energy finance, energy and

environment commodity domain, how energy & environment commodity markets have evolved – will aid you in optimal performance planning under PAT.

• Valuable insights gained by RSM GC through servicing PAT DCs – can assist other DCs in jumpstarting and guiding their PAT process

• ESCert is an energy commodity and RSM GC specializes in climate, energy and environmental commodities

• RSM GC is a leading player in CDM, REC and understands well the interplay of PAT with these mechanisms. By identifying REC, CER opportunity General Carbon can help you increase the returns out of the capital that you deploy for PAT.

Experience in RSM GC for PAT• Advising clients on PAT since inception – presently advising DCs in 4 industry sectors

• Identified and developed more than 50 energy/energy efficiency projects under UN

mechanism.

• More than 80 Men Years experience in:

Energy Monitoring – Electrical, Thermal Energy Audit Identification of Clean and EE technology

• Executed more than 60 major projects (Energy/EE)

• Contributed to EE improvement from 12GCal/ton to less than 6.5GCal/ton of crude steel

• Contributed to achievement of over 300Million GCal saving

Domain Competence (Process, Technology etc.) RSM GC is well placed to quickly grasp DC’s domain specifics – as it has competent

personnel who have extensively engaged in the following:

• Worked with technology aspects of : Power Generators, Iron & Steel, Other Metal Industries, Paper & Pulp, Cement, Fertilizers, Infrastructure, Distillery, Municipal projects, Textiles etc.

• Analyzed technically and financially issues related to clean technology, energy saving/energy efficiency, sustainable development initiatives of clients

• Have experts, trained and certified energy auditor, engineers – who understand electrical and thermal energy aspects

Experience . Expertise .Value

Clients of Energy and Sustainability Service Offerings

Some more clients…..

12

PAT Current Client Engagements

Thermal Power plants

Iron and Steel

Textile

Paper

Service items include• Review of baseline assessment• Measurement and Verification plan• Review of energy systems• Review of energy saving measures• Preparing Energy Road Map• Risk assessment and mitigation plan• Proposed normalization strategy• Sub unit level analysis of energy performance• Audit and Audit Review• Management Insight to assist CxO • Market insight and ESCert trading

Cycle of Action under PAT and RSM GC’s Services

Service Insight Advisory Services - highlights

• Assessment of target and recommended action plan – for gap

analysis

• Assessment of expected SEC through planned interventions

• Preparation of scheme document

• Preparation of 1st year and 2nd year PAD (form A) for issuance

• Preparation of end of cycle PAD (form A)

• Assistance during verification

– End of cycle verification/all 3 verification

• Assistance in obtaining issuance of ESCert

• Strategic AssistanceAdvisory

Services

Transaction Services

Service Insight Transaction Services - highlights• Assistance in trading ESCerts through

– Trading platform– Bilateral trade

• Assistance in mid cycle sale of ESCert as allowed under PAT rules

• Assistance in availing finance through funds that are likely to come up to support PAT type initiatives

• Help develop the right strategy for leveraging ESCert, REC etc. fungibility when that is introduced.

Advisory Services

• ESCert tradingTransaction Services

Case Study – RSM GC’s Success StoriesCase Study 1 –Sector : Power•RSM GC studied the DC’s processes and unearthed verification risks which could have extinguished the potential ESCerts.

•The practice of monitoring important PAT parameters was not adequate for PAT requirements. RSM GC advised the DC on the impending risks. Corrections have been initiated by the DC.

•Issues related to PAT procedural requirements were identified by General Carbon which otherwise would have resulted in non-compliance.

Case Sector 2 -Sector: Iron and Steel

•RSM GC’s assessment has resulted in re-estimation of the baseline. Corrections have been initiated.

•Risks and opportunities have been re-calibrated.

•The DC, based on RSM GC’s input, has initiated communication with BEE.

Contact us

Mr. Anupam Das PurkayasthaDirectorPhone :+91 22 2266 3201/3301Mobile :+91 9029002980Email : anupam.das@general-carbon.com

Mr. R.P.SharmaDirectorPhone :+91 22 2266 3201/3301Mobile :+91 98180 49505Email : rajendra.sharma@general-carbon.com

Thank you