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Moving in to make states comply with an existing rule to have a certain portion of their power grid reserved for green energy, the government is planning to set up a renewable power exchange that would issue certificates to surplus states which can be sold to deficit states looking to fill their mandatory quota.

The Central Electricity Regulatory Commission (CERC), under the ministry of power, will soon set up an independent body to enable registry of renewable power trading between states, which could facilitate issuance of renewable energy certificates to states with surplus green energy. These could then be sold to deficient states to help them meet the mandatory requirement of sourcing a minimum prescribed proportion of the total power supplied by them to the grid from renewable sources.

“We will soon bring out a detailed discussion paper to finalise the proposal,” a CERC official told ET.
For instance, if Tamil Nadu has surplus power generated from wind energy, it can sell the surplus power through such certificates to states like Delhi that do not have enough of renewable energy sources. In this way, Delhi can meet its renewable power portfolio by possessing these certificates and investing in the sector instead of generating green power itself.

The independent body will also set norms and guidelines for trading in green power. The move will ensure that renewable energy initiative of several states will no longer be optional. Even as the Electricity Act, 2003 makes it mandatory for states to promote use of renewable energy and source a certain quantum of green power for their grids, so far only 15 states have set quotas for renewable power.

“While the Electricity Act, 2003, makes it mandatory for all State Electricity Regulatory Commissions (SERC) to promote use of a certain percentage of renewable energy by distribution companies, lack of availability of renewable energy source to meet the requirement is often posed as an excuse by states,” the official said.

While the government is planning to enact a new renewable energy law that would stipulate mandatory use of a certain quantum of renewable energy in each state, issuing renewable energy certificates would facilitate a larger number of states to use green energy as part of their power supply.

“Trading of renewable energy certificates will boost the growth of alternative energy sources in the country. The move is aimed at diversifying the country’s energy mix that is dominated by oil, gas and coal as basic fuel feed,” the official said.

The gross installed capacity of grid interactive renewable power in the country is estimated at 11,273 mw, which accounts for 8% of the country’s installed generation capacity. While the government plans to install additional 78,577 mw of power-generation capacity by the end of 11th Five-Year Plan, it has set a target of 13,500 mw for renewable energy sources.

Source- Economic Times