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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Environment

Kaveri Cements Ltd has an energy-intensive plant that is a designated consumer under India's Perform, Achieve and Trade (PAT) scheme. In one cycle it saved more energy than its assigned target. What can it ordinarily do under the scheme?

Under the PAT scheme, a designated consumer that beats its energy-saving target is issued tradable Energy Saving Certificates (ESCerts). It can sell them to designated consumers who fell short. Renewable Energy Certificates relate to renewable generation, not efficiency over-achievement, and no automatic exemption arises.

  1. AReceive Energy Saving Certificates (ESCerts) that can be traded with other designated consumersCorrect
  2. BReceive Renewable Energy Certificates that can be sold only to the grid operator
  3. CCarry the over-achievement as a statutory reserve in its balance sheet
  4. DClaim an automatic exemption from all future energy targets

Explanation

PAT is a market-based mechanism to improve energy efficiency in energy-intensive industries, run by the Bureau of Energy Efficiency. Designated consumers exceeding their specific energy consumption targets are issued ESCerts, tradable on power exchanges. Those who miss targets can buy ESCerts or face penalty. RECs relate to renewable generation, not efficiency savings.

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