Renewable Energy Certificate System to accelerate uptake of renewable energy resources based electricity in India

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New Delhi/ Mumbai, June 18 (ANI/Business Wire 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.

This was amongst the main points deliberated at a workshop organized by The Energy and Resources Institute (TERI) on under the aegis of its ongoing project of designing a Renewable Energy Certificate (REC) system for India.

The exercise, sponsored by Strategic Programme Fund of the Foreign and Commonwealth Office (FCO), British Government, is being carried out in partnership with the Maharashtra Electricity Regulatory Commission (MERC).

The stakeholder workshop on "Tradable Renewable Energy Certificates for Maharashtra" in association with the Renewable Energy and Energy Efficiency Partnership (REEEP) deliberated that RECs, a market-based instrument to promote renewable energy and facilitate renewable energy portfolio obligations, 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.

Apart from this, perhaps these could also be used by those states, which do not have substantial RE resources, to meet their RPO.

Spencer Mahony, First Secretary, Trade and Investment, British Deputy High Commission (Mumbai) during his special address, emphasized the need for increasing the use of renewable energy as a source of power worldwide.

He said, "There are many reasons for focusing on renewable energy; (some of which are) diversified supply, increased energy security and reduction of emissions".

In the UK, the existing scheme of renewable obligations deems electricity suppliers of UK to source a certain percentage of energy from renewable sources.

The suppliers who cannot meet the obligations are allowed to buy renewable certificates of equivalent value to meet their obligation quotas and hence help in increasing the proportion of renewable energy in overall energy mix in the country.

Dr. Pramod Deo, Chairman of MERC pointed out that due to the 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.

In his opinion, a REC system could help offset, to a certain extent, this anomaly.

Regarding public perception of renewable energy, V. Subramanian, Secretary, Ministry of New and Renewable Energy (MNRE),Government of India in his inaugural address, highlighted the fact that majority of consumers are not aware that a certain percentage of their consumption today comes from renewable energy sources.

He also pointed out that India has relatively high percentage of power generation capacity in renewable sources (about 7.8 per cent of total installed capacity), with 95 per cent of investment coming from private sector, compared to the thermal power sector - something that is not well known.

He also felt that the system of RECs would be effectively enforced if penalties imposed were high so as to deter people from defaulting, and thereby giving RE power purchase a boost.

While giving an overview of the Indian Power Sector K. Ramanathan, Distinguished Fellow, TERI lauded the encouraging role played by the government and regulatory commissions to create an enabling scenario for renewables.

However, he added that there still remain many challenges as well as opportunities. "Some of the challenges are providing renewable energy suppliers with suitable measures of connectivity to the grid, determining tariffs that promote renewable energy, and matching the power supply from renewables with grid load profile. Among the opportunities available, there is a need for increasing electricity access, especially in rural areas of India. Renewable energy can play an important role here. Given the uneven distribution of renewable energy potential within India, to ensure good overall development of renewables, RECs stand as a great tool to overcome this disparity."

The workshop had active participation from stakeholders from electricity regulatory commissions - state as well as centre, power producers, state utilities, consulting agencies and experts from the sector.

Dr. Virginia Graham from the Centre for Management under Regulation, University of Warwick, UK, which is a collaborating institute for the TERI project, and Stephen Andrews of Lower Watts Consulting, UK, also presented their experiences with the REC system in the UK giving an international dimension to discussions.

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