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January 12, 2012India Engineering Conglomerates GMR and L&T Raise their Solar Ambitions
January 14, 2012The Indian government is going to set targets for large power users so that their energy usage is capped. The Bureau of Energy Efficiency (BEE) is going to supervise this program in which Energy Saving Certificates will be awarded . This certificates can be traded on the energy exchanges providing an incentive for large energy users to improve energy efficiency . Note Renewable Energy Certificates (REC) are already trading successfully on IEX since the last year . REC have promoted the usage of Renewable Energy by providing a market linked mechanism to find prices for green energy in India.
The energy consumption reported by plants will be based on audit by any of the BEE accredited agencies.The program will cover eight sectors – steel, fertilizer, oil refineries, paper mills, thermal power plants etc. The process will start in 2012 and make it the world’s largest Energy Saving Certificate platform much bigger than what is followed in Germany and Netherlands. The scheme is known as The Perform, Achieve and Trade scheme
What is REC
The REC Scheme is a Policy whereby Renewable Energy Generators are granted a REC per MwH of Green Energy that they contribule to the Grid.These RECs can be traded on Exchanges whereby Green Energy Producers can sell them to Buyers.Energy Deficient Entities have to buy these RECs in order to meet their Renewable Energy Targets.Note each state in India has a Renewable Purchase Obligation(RPO) which is decided by the State Electricity Regulator (SERC).RPO means that the State has to compulsorily consume a fixed percentage of electricity from Renewable Energy Sources.Some states in India like Tamil Nadu,Gujarat are rich in Green Energy while others like Bihar,Delhi and Maharashtra are deficient.Power Exchanges in India have already set the ball rolling in terms of trading in RECs.