Policy Update
Pragya Raghav
Background
Recognising that efficient energy use and conservation are the most cost-effective ways to meet India’s growing energy demand, the Government of India enacted the Energy Conservation Act, 2001. Under the provisions of this Act, the Bureau of Energy Efficiency (BEE) was established on 1 March 2002 under the Ministry of Power. The Bureau is headquartered in New Delhi and extends across India.
The Energy Conservation Act, 2001 (Act No. 52 of 2001), enacted on 29 September 2001 and amended by Act No. 28 of 2010, provides the legal framework for promoting the efficient use of energy and its conservation. Under the Act, BEE is established as a body corporate with perpetual succession and a common seal. It has the authority to acquire, hold, and dispose of movable and immovable property, enter into contracts, and sue or be sued in its own name.
BEE’s mission is to assist in developing policies and strategies that promote energy efficiency through self-regulation and market-based principles. Its primary objective is to reduce the energy intensity of the Indian economy within the framework of the Energy Conservation Act, 2001. Through the active participation of governments, industries, institutions, and consumers, BEE seeks to accelerate the adoption of energy-efficient practices across all sectors.
BEE collaborates with several international partners, including the Global Environment Facility (GEF), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), USAID, UNDP, UNIDO, and the International Bank for Reconstruction and Development (IBRD). Its national partners include DISCOMs, Energy Efficiency Services Limited (EESL), Energy Service Companies (ESCOs), ECBC experts, and designated consumers.
Organisational Structure
A Governing Council, which is responsible for its overall supervision, direction, and management governs the Bureau. The Council consists of not fewer than 20 and not more than 26 members, appointed by the Central Government. The Chairperson presides over Governing Council meetings. In the Chairperson’s absence, another member elected by those present presides over the meeting.
Decisions of the Governing Council are made through a majority vote. In the event of a tie, the Chairperson or the member presiding over the meeting exercises a casting vote.
The Director General, appointed by the Central Government, serves as the Chief Executive Officer of the Bureau. The appointment is based on expertise and experience in areas such as energy production, energy management, standardisation, energy efficiency, and conservation. The Director General has a tenure of five years.
Functions
- The Bureau of Energy Efficiency coordinates with designated consumers, state agencies, and other organisations to promote energy efficiency across the country. It advises the Central Government on energy consumption norms and standards for various industries and processes. The Bureau also recommends standards for energy labels on appliances and equipment and identifies industries that should be notified as designated consumers under the Energy Conservation Act.
- BEE develops guidelines for the Energy Conservation Building Code (ECBC) and undertakes awareness campaigns to promote efficient energy use among industries, institutions, and the general public.
- The Bureau organises training programmes, strengthens consultancy services, promotes research and development, and supports the development of testing and certification procedures. It also facilitates the implementation of pilot projects aimed at demonstrating innovative energy-efficient technologies.
- Another important function of BEE is to promote innovative financing mechanisms and provide assistance to institutions working towards energy conservation. It maintains a list of accredited energy auditors and supports the development of professional expertise in the field.
- In addition, BEE prepares educational curricula on energy conservation for schools, universities, and other educational institutions. It conducts examinations for capacity building, strengthens technical services, and implements international cooperation programmes related to energy efficiency.
- The Central Government, in consultation with BEE, also prescribes the value per metric tonne of oil equivalent (MTOE) of energy consumed for the purposes of implementing the Energy Conservation Act.
Performance
To fulfil its mandate, BEE implements several flagship programmes that promote energy efficiency across industries, households, commercial buildings, and MSMEs.
1. National Mission for Enhanced Energy Efficiency (NMEEE)
The National Mission for Enhanced Energy Efficiency (NMEEE) is one of the eight missions under India’s National Action Plan on Climate Change (NAPCC). The mission aims to strengthen market-based approaches for improving energy efficiency and consists of four major initiatives:
- Perform, Achieve and Trade (PAT)
- Market Transformation for Energy Efficiency (MTEE)
- Energy Efficiency Financing Platform (EEFP)
- Framework for Energy Efficient Economic Development (FEEED)
- Source: Bureau of Energy Efficiency (BEE) Official Website, Ministry of Power, Government of India.
Under MTEE, two important programmes were introduced:
- Bachat Lamp Yojana (BLY)
- Super-Efficient Equipment Programme (SEEP)
2.Perform, Achieve and Trade (PAT)
The Perform, Achieve and Trade (PAT) Scheme is a market-based regulatory mechanism designed to reduce Specific Energy Consumption (SEC) in energy-intensive industries. It establishes energy-saving targets for designated consumers, and industries exceeding their targets receive Energy Saving Certificates (ESCerts), which can be traded.
A key objective of PAT is to establish methodologies for determining the baseline and target Specific Energy Consumption (SEC) norms for designated consumers.
During PAT Cycle I, the scheme achieved energy savings of 8.67 million tonnes of oil equivalent (MTOE) and prevented approximately 31 million tonnes of CO₂ emissions. PAT Cycle II expanded its coverage to additional sectors, achieving 14.08 MTOE of energy savings and avoiding nearly 68 million tonnes of CO₂ emissions.
Summary of energy saving and emission reduction PAT Cycle I:-
Source: Bureau of Energy Efficiency (BEE) Official Website, Ministry of Power, Government of India.
PAT Cycle II Energy Savings Achieved
Source: Bureau of Energy Efficiency (BEE) Official Website, Ministry of Power, Government of India.
Source: Bureau of Energy Efficiency (BEE) Official Website, Ministry of Power, Government of India.
3.Standards & Labelling (S&L) Programme
The Standards & Labelling (S&L) Programme enables consumers to identify energy-efficient appliances through the familiar star-rating system. Its objectives include:
- Reducing energy consumption without compromising appliance performance.
- Promoting consumer awareness and informed purchasing decisions.
- Monitoring and verifying annual energy savings from energy-efficient appliances.
The programme currently covers 34 categories of appliances and equipment, with 11 categories under mandatory labelling and the remaining under the voluntary labelling scheme.
To facilitate implementation, BEE developed DISHA (Disseminating Star Labelling in Household Appliances), an operational manual supporting the effective implementation of the programme.
Comparative Label
Allow consumers to compare the energy consumption of similar products, and factor lifetime running cost into their purchasing decision
Source: Bureau of Energy Efficiency (BEE) Official Website, Ministry of Power, Government of India.
Endorsement Label
Provide a ‘certification’ to inform prospective purchasers that the product is highly energy efficient for its category.
Source: Bureau of Energy Efficiency (BEE) Official Website, Ministry of Power, Government of India.
4.ADEETIE Scheme
The Assistance in Deploying Energy Efficient Technologies in Industries and Establishments (ADEETIE) Scheme is a flagship initiative of the Ministry of Power implemented by BEE. It aims to accelerate the adoption of energy-efficient technologies across India’s MSME sector by providing technical support and financial incentives.
The scheme operates across 60 industrial clusters covering 14 energy-intensive sectors. It seeks to reduce energy consumption, lower operational costs, improve competitiveness, and promote sustainable industrial growth.
Key Components
- 5% interest subvention for Micro and Small Enterprises.
- 3% interest subvention for Medium Enterprises.
- Assistance in energy audits and preparation of Detailed Project Reports (DPRs).
- Capacity building for MSMEs, financial institutions, and industry associations.
- Helpdesk support for scheme-related queries.
Eligibility
- MSMEs registered on the Udyam Portal.
- Enterprises operating in the identified industrial clusters.
- Loans ranging from ₹10 lakh to ₹15 crore.
- Up to 75% debt funding eligible for interest subvention.
- Projects must achieve and sustain at least 10% energy savings during the scheme period.
Duration
The scheme will operate for three financial years, from 2025–26 to 2027–28, during which eligible MSMEs can avail themselves of the scheme’s benefits.
Impact
India’s Panchamrit commitments and Nationally Determined Contributions (NDCs) have accelerated the country’s transition towards a cleaner energy future, including achieving 50% non-fossil fuel-based installed electricity capacity by 2030 and Net Zero emissions by 2070. The State Energy Efficiency Action Plan (SEEAP) plays a key role in translating these national goals into state-level action through coordinated implementation. The progress reflected in the State Energy Efficiency Index (SEEI) 2025, with ‘Front Runner’ States increasing from five to nine, demonstrates India’s strengthening energy efficiency ecosystem and its commitment to advancing national and global climate goals.
In support of these goals, India has introduced initiatives such as sovereign green bonds and the development of a national climate finance taxonomy.
BEE plays a significant role in advancing energy efficiency across sectors and contributes to national initiatives such as RCO, PAT, CCTS, CAFE, ADEETIE, S&L, and ECSBC, thereby supporting the vision of Viksit Bharat @2047.
The RCO Portal has strengthened monitoring, improved compliance, and enhanced coordination among stakeholders.
Standards & Labelling Programme (2025)
As of 2025, the programme covers 38 categories of appliances, with 3,662 registered brands and approximately 58 crore star-labelled appliances produced. It has resulted in estimated annual electricity savings of 89.8 billion units (kWh).
Perform, Achieve and Trade (PAT) Scheme (2025)
By 2025, PAT covered 1,333 energy-intensive industrial units, representing nearly 55% of India’s industrial energy consumption. The scheme has achieved cumulative energy savings of 25.78 MTOE, significantly improving industrial energy efficiency.
Source: Bureau of Energy Efficiency (BEE). Available at: https://beeindia.gov.in/
Emerging Issues
Despite significant progress, several challenges remain.
According to the BEE Line Newspaper, one of the biggest challenges is funding energy transition. India is estimated to require approximately USD 1.5 trillion by 2030 and USD 19 trillion by 2070, whereas current annual clean energy financing remains substantially below the required level.
According to the State Energy Efficiency Index (SEEI) 2025 , the implementation of energy efficiency policies remains uneven across Indian states. While several states have effectively integrated energy efficiency into their development strategies, others continue to face challenges such as limited technical expertise, inadequate institutional capacity, and shortages of skilled personnel.
Weak enforcement of measures like the Energy Conservation Building Code (ECBC) and inconsistent compliance monitoring further hinder effective implementation. As a result, these disparities reduce the overall effectiveness of national energy efficiency initiatives and highlight the need to strengthen the capacity of State Designated Agencies (SDAs). Another challenge is the implementation of broad, “one-size-fits-all” energy efficiency initiatives. Such approaches often spread limited financial and institutional resources across multiple sectors, reducing their overall effectiveness and limiting measurable outcomes.
The slow adoption of energy-efficient practices among consumers and MSMEs is one of the emerging issues. Although the BEE Standards and Labelling (Star Rating) Programme has improved awareness, many purchasing decisions are still influenced by lower upfront costs rather than long-term energy savings, while MSMEs often face limited awareness and technical capacity to adopt efficient technologies. At the same time, rising electricity demand from AI, data centres, electric vehicles (EVs), and cooling technologies is creating new pressures on India’s power system. Addressing these challenges will require stronger awareness campaigns, enhanced technical support, updated efficiency standards, and improved collaboration between BEE, state governments, and industry to ensure that energy demand remains aligned with India’s climate and energy transition goals.
Way Forward
Going forward, BEE aims to establish energy efficiency as India’s “first fuel”, balancing affordability, sustainability, and energy security. Strengthening financing mechanisms, expanding technological adoption, enhancing state-level implementation, increasing public awareness, and promoting innovation will be essential to achieving India’s long-term climate and energy goals.
References
- Bureau of Energy Efficiency. (2026). About the Bureau of Energy Efficiency (BEE). Ministry of Power, Government of India.
https://beeindia.gov.in/
- Bureau of Energy Efficiency. (2025). Standards & Labelling (S&L) Programme. Ministry of Power, Government of India.
https://beeindia.gov.in/
- Bureau of Energy Efficiency. (2025). Perform, Achieve and Trade (PAT) Scheme. Ministry of Power, Government of India.
https://beeindia.gov.in/
- Bureau of Energy Efficiency. (2025). ADEETIE: Assistance in Deploying Energy Efficient Technologies in Industries and Establishments. Ministry of Power, Government of India.
https://beeindia.gov.in/
- Bureau of Energy Efficiency. (2026). National Mission for Enhanced Energy Efficiency (NMEEE). Ministry of Power, Government of India.
https://beeindia.gov.in/
- Government of India. (2001). The Energy Conservation Act, 2001 (Act No. 52 of 2001), as amended by the Energy Conservation (Amendment) Act, 2010 (Act No. 28 of 2010). Ministry of Law and Justice, Legislative Department.
https://legislative.gov.in/
- Ministry of Environment, Forest and Climate Change. (2021). National Action Plan on Climate Change (NAPCC). Government of India.
https://moef.gov.in/
- Ministry of Power. (2025). Panchamrit Commitments and India’s Net Zero Pathway. Government of India.
https://powermin.gov.in/
- Ministry of Power. (2025). Energy Efficiency and Conservation Initiatives. Government of India.
https://powermin.gov.in/
- United Nations Framework Convention on Climate Change. (2015). The Paris Agreement.
https://unfccc.int/process-and-meetings/the-paris-agreement
- United Nations Framework Convention on Climate Change. (2021). India’s Updated Nationally Determined Contribution (NDC).
https://unfccc.int/
About the Contributor
Pragya Raghav is pursuing a B.A. (Hons.) in History at Mata Sundri College for Women, University of Delhi, with a minor in Political Science. She is passionate about public policy, international relations, governance, climate policy, and sustainable development. Through research and policy analysis, she aims to contribute to evidence-based policymaking and create meaningful social impact.
Acknowledgment
I would like to express my sincere gratitude to IMPRI (Impact and Policy Research Institute) for providing me with the opportunity to prepare this policy update article and for fostering a learning environment that encourages critical thinking, policy research, and evidence-based analysis. I am also grateful to the Bureau of Energy Efficiency (BEE), Ministry of Power, Government of India, and other official government sources whose publications and data served as valuable references in the preparation of this article.I would also like to extend my heartfelt gratitude to Asmatwali and Shruti for generously reviewing my article and providing valuable feedback and constructive suggestions.
Disclaimer-The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views, policies, or positions of IMPRI (Impact and Policy Research Institute) or any other affiliated organisation.
Name of the reviewer: Asmatwali and Shruti
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