India is on the path to climate action and has taken various steps. On 9th February 2023, Union Minister for Power R.K. Singh informed the Parliament about the Energy Conservation (Amendment) Bill, which was passed on 12th December 2022. The Bill has come into effect from 1st January 2023.
The Bill envisages provisions to empower the central government on various aspects including, specifying a carbon credit trading scheme, designating consumers on a proportion of their energy needs from non-fossil sources, providing norms for energy-efficient green buildings and specify energy consumption standards for vehicles and ships.
India’s own carbon trading market:
In the Energy Conservation (Amendment) Bill 2022, one of the significant provision is to “Specify the carbon credit trading scheme”. Carbon credit refers to a tradeable permit allowing the holder to emit a specified amount of carbon dioxide or other greenhouse gases such as methane and nitrous oxide. A carbon credit can be earned by reducing emissions for a given activity or creating sinks for carbon absorption. Carbon credits may be purchased by an entity that emits above its specified amount.
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The carbon credit trading scheme is aimed at reducing greenhouse gas emissions, and hence addressing climate change. The central government or any authorized agency may issue carbon credit certificates to entities registered and compliant with the scheme. The entities will be entitled to trade the certificate.
Union Minister R.K. Singh laid down the provision of the Bill. He said, “Design of carbon trading scheme is to be prescribed through rules after consideration of all relevant aspects, including the transition of existing schemes of tradable certificates to the single national framework.” Hence, any registered entity, in accordance with the rules, shall be entitled to purchase or sell the carbon credit certificate.
Ministry of Power’s initiatives to deepen the green electricity market:
To further remove barriers in the availability and utilization of renewable energy, the Ministry of Power has taken various other initiatives. Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2022 have been issued by the Ministry. The Rules reduce the Open Access limit from 1 MW to 100 kW, which paves the way for small consumers also to purchase renewable energy.
Union Minister R.K. Singh informed about the Electricity (Promotion of generation of Electricity from Must-Run Power Plant) Rules, 2021. The rules state that in the event of a curtailment of supply from a must-run power plant, the renewable energy generator is also allowed to sell power.
Also, Real Time Market (RTM) was introduced in June 2020 by the Ministry. RTM allows DISCOMs/Buyers to buy power with an advance notice of one hour. This helps them meet the challenges related to grid management.
