Promotion of Renewable Energy Sources: The Electricity Act 2003 has specific provisions for development of Renewable Energy Sources. Section 86(1)(e) and Section 61(h) are key sections providing promotional measures for RE. Several Regulators have determined ‘‘Feed-in’’ tariffs form purchase of renewable energy by distribution licensees. More than 20 Regulators have also determined percentage of energy to be procured by distribution licensees from renewable energy sources. These percentages popularly referred to as RPS or Section 86(1)(e) obligation have proved successful for promotion of RE in India.
Section 86(1)(e):(Functions of State Commission): promote co-generation and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee;
Section 61(h) (Tariff regulations): the promotion of co-generation and generation of electricity from renewable sources of energy;
Renewable Energy Certificates (RECs) are a type of environmental commodity intended to provide an economic incentive for electricity generation from renewable energy sources. If Renewable energy such as wind or solar power is to be supported for global, environmental or a country’s energy security objective, it does not matter where the solar or the wind plant is located. In such a case, RECs are ideal because they can come from the location where wind or solar resources make its use practical or cost effective. In addition, even if an area is windy, it may not be suitable for a wind project because of proximity to habitation, bird flyways, or parks or wilderness areas, REC’s are good option as they address the constraints related to the site specific nature of many renewable.
An REC is created when one megawatt hour of electricity is generated from an eligible renewable energy resource.REC represents the entire benefit of renewable energy based electricity over electricity from non-renewable resources. Typically, RECs are unbundled and sold separately, from the underlying electricity generated. When purchased, the owner of REC is considered to have purchased renewable energy. While traditional carbon emissions trading programmes promote low carbon technologies, RECs can create an incentive mechanism to promote renewable energy by providing an additional revenue stream to electricity generated from renewable sources.
Market for Renewable Energy Certificates: The demand for renewable energy certificates can be created through compliance or voluntary markets. Compliance markets are often created by a policy that stipulates a Renewable Portfolio Standard through which the electric utilities are required to supply a certain percentage of their electricity from renewable generators by a specified year. Voluntary markets are created where customers choose to buy renewable power, out of range of concerns such as reducing their climate change footprint or due to a broader attempt to become ‘green’. Renewable Energy Generators that do not have a Renewable Portfolio Standard can sell their RECs to voluntary buyers, usually at a cheaper price that compliance market RECs.
Potential Application in India: In India, with the rising demand for power and the depleting energy resources for power generation, Renewable Energy Certificates (REC) are set to bring about a paradigm shift in the way the renewable based electricity would be promoted in future. It would prove to be a market-based instrument to promote renewable energy and facilitate renewable energy portfolio obligations which can make the renewable electricity market stable and predictable by maximizing the benefits of renewable generation while reducing costs. Besides, introduction of tradable REC could provide one additional source of revenue to the RES based power generators and these could also be used by those states, which do not have substantial RE resources, to meet their RPO.
There is an uneven distribution of renewable energy potential in the country, certain states are generating high percentage of electricity from renewable sources while others are not procuring even a minimum percentage; resulting in uneven tariff burden on consumers across the country. A REC system could help offset, to a certain extent, this anomaly. REC Mechanisms enable market growth and improve the commercial viability of the RE electricity. REC measures can provide a greater push to RE electricity by way of removing the bottlenecks like higher costs, uneven distribution of RE resources across India, and scheduling or despatchability of RE electricity, in procurement of RE electricity by utilities. REC's mechanisms merit considerations, and has been used extensively as a successful market based policy instrument to promote renewables in many countries and which would be relevant in the current legal and regulatory set-up of the Indian Power sector for facilitating compliance with RPO/RPS. The ministry of new and renewable energy is conducting a feasibility study for introducing renewable energy certificates. "One certificate will be equal to 1 MW he of renewable energy generated. The certificates can be traded to meet the mandatory targets of renewable energy purchase.
Day by day the cycle of climate on earth is changing. Rapid economic development and incessant tapping of natural resources have posed severe problems for the life system on our planet. Mankind now confronts by far the biggest environmental challenge in the form of Global Warming: the gradual increase in the Earth’s temperature, which brings about noticable change in the climatic condition. Global Warming has led to season shifting, changing landscapes, rising sea levels, increased risk of drought and floods, stronger storms , increase in heat related illness and diseases all over the world. Across the world, there is growing concern about global warming and its impact on the earth’s ecosystem. Carbon dioxide levels are at their highest since
the industrial revolution and are continuously rising. Today, most scientists agree that global warming in the last few decades has primarily been caused due to human activities which have increased the release of Greenhouse Gases in the atmosphere, deforestation, urbanization etc. Day by day the cycle of climate on earth is changing. Rapid economic development and incessant tapping of natural resources have posed severe problems for the life system on our planet. Mankind now confronts by far the biggest environmental challenge in the form of Global Warming: the gradual increase in the Earth’s temperature, which brings about noticable change in the climatic condition. Global Warming has led to season shifting, changing landscapes, rising sea levels, increased risk of drought and floods, stronger storms , increase in heat related illness and diseases all over the world. Across the world, there is growing concern about global warming and its impact on the earth’s ecosystem. Carbon dioxide levels are at their highest since
the industrial revolution and are continuously rising. Today, most scientists agree that global warming in the last few decades has primarily been caused due to human activities which have increased the release of Greenhouse Gases in the atmosphere, deforestation, urbanization etc.
