Monitoring & Verification Audits

Comprehensive M&V Audits in compliance with Ministry of Power Gazette Notification for Distribution Loss verification by Accredited Energy Auditors

Monitoring & Verification Audits

The Monitoring & Verification (M&V) Audit has been undertaken in compliance with the Gazette Notification of the Ministry of Power, Government of India, which mandates that:

Monitoring & Verification Audits

The Monitoring & Verification (M&V) Audit has been undertaken in compliance with the Gazette Notification of the Ministry of Power, Government of India, which mandates that:

Each Designated Consumer shall provide an arrangement for monitoring and verification for Distribution Loss verification by Accredited Energy Auditors. The Designated Consumer, in consultation with the Empanelled Accredited Energy Auditor (EmAEA), shall establish a transparent, independent and credible monitoring and verification arrangement for determining Transmission & Distribution Losses, in accordance with the Bureau of Energy Efficiency (Manner and Interval of Time for Conduct of Energy Audit) Regulations, 2010, for compliance with energy consumption norms and standards.

Background of Monitoring & Verification Audit

PAT Cycle

The Perform, Achieve and Trade (PAT) Scheme is a key program under India’s National Mission for Enhanced Energy Efficiency (NMEEE), designed to promote energy efficiency improvements through a market-based mechanism. The PAT framework enables large energy consumers to enhance efficiency and, on surpassing prescribed targets, to earn Energy Saving Certificates (ESCerts) that can be traded on the energy exchange.

PAT Cycle Structure

Governments typically implement carbon pricing through three main approaches

Each PAT Cycle lasts three years, during which Designated Consumers (DCs)-industries that exceed a certain energy consumption threshold-must meet SEC reduction targets.

The PAT Scheme is a regulatory and market-based instrument, allowing entities that exceed targets to earn Energy Saving Certificates (ESCerts) which can be traded, while underperformers must buy ESCerts to comply.

New cycles are rolled out on a “rolling basis,” meaning new sectors and DCs may be added each year as notified by BEE.

PAT Cycle I (2012-15): 478 DCs, 8 sectors, Target: 6.68 MTOE, Achievement: 8.67 MTOE.
PAT Cycle II (2016-19): 621 DCs, 11 sectors, Target: 8.869 MTOE.
PAT Cycle III-VII: Continuous expansion; by Cycle VII (2022-25), over 1,300 DCs from diverse sectors (including railways, refineries, commercial buildings, and petrochemicals) had been covered. PAT Cycle VII alone covers 509 DCs, targeting a reduction of 1.388 MTOE.

Upon achieving its notified targets, entities will be eligible to claim Energy Saving Certificates (ESCerts) through its State Designated Agency (SDA). These certificates, each equivalent to 1 Metric Ton of Oil Equivalent (MTOE) saved, can be traded or banked for future use. Conversely, in case of a shortfall against the target, entities would be required to purchase ESCerts to ensure compliance.

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Sector Coverage and Achievements

Sectors covered in various PAT cycles include aluminum, cement, iron & steel, thermal power, textiles, fertilizers, chlor-alkali, pulp & paper, refineries, railways, DISCOMs, petrochemicals, and commercial buildings.
The first cycle (2012-2015) targeted eight high energy-consuming sectors, achieving energy savings 30% above the target.
New cycles have progressively added more sectors and DCs, with recent cycles addressing commercial buildings, refineries, and petrochemicals.

Market Mechanism

Overachievement leads to ESCert issuance; underachievement necessitates ESCert purchase through trading platforms regulated by CERC.
ESCert trading is critical for scheme compliance and for incentivizing energy efficiency investments across industrial sectors.
The PAT mechanism incentivizes entities to continually improve energy efficiency through investments in loss reduction, network modernization, and demand-side management.

Preparation Methodology for (M & V) for DISCOM

For reporting under PAT Cycle, entities adopt a systematic approach for data submission and verification as per the guidelines of the Bureau of Energy Efficiency (BEE). The methodology ensures that consistent, accurate, and verifiable data is captured regarding infrastructure, energy input, and circle-wise distribution losses for both baseline and assessment years.

Filling of Sector-Specific Pro-Forma by DC

The Sector-Specific Pro-Forma is designed to capture all relevant infrastructure and energy data required for the computation of distribution losses at the DISCOM level. It is structured to facilitate uniform reporting and enable the calculation of gateto-gate transmission and distribution (T&D) losses. The following key steps and components are involved:

Regulatory Compliance

As per Energy Conservation Rules (2007), each Designated Consumer (DC) is required to submit annual energy consumption reports (Form-1) to the State Designated Agency (SDA) and BEE in both electronic and hard copy formats.

Structure of the Pro-Forma:

Instruction Sheet for filling Form-1
General Information Sheet
Form-1 (auto-generated post data entry)
Form – Input Energy
Form – SJ (Consumer & Billing Data)

Pro-Forma Features:

Formula cells are locked to ensure data integrity and security
Color-coded cells to guide data entry
Used for annual energy return submission under PAT since FY 2014-15

Data Requirements:

Input energy data (meter-wise) at distribution periphery
Open access sales, EHT sales, and transmission losses
Consumer numbers and connected loads (category-wise, circle-wise)
Circle-wise billed energy and computed distribution losses
Circle-wise and DISCOM-level T&D losses

Reporting:

DCs are required to submit both baseline and assessment year data, supported by primary and secondary documentary evidence. The data entry follows the format and instructions provided by BEE and SDA.