Renewable Purchase Obligation Research Articles

Strides for aberrations: The Electricity (Amendment) Bill, 2021 of India

The article evaluates the provisions of the newly introduced Electricity (Amendment) Bill, 2021 by the government of India. As a holistic reform package for the electricity sector is coming after a long time, the bill deserves scrutiny regards its merits and other issues raised by various stakeholders. This article is an attempt to assess the bill with a focus on its implications for India's electricity sector. It examines the major features in the bill including the Renewable Purchase Obligation (RPO), the establishment of ECEA, enhanced payment security mechanism, the distribution Sublicense model, and the reforms in electricity pricing and subsidy system in the country. The repercussions of revamps in electricity pricing and subsidy system on farming communities and free electricity programs in many states incited opposition from stakeholders. It is found that the bill attempts to trespass the limits of the quasi-federal system in India, where it affects certain privileges of the state governments. The paper concludes that persisting crisis in the operations of the current regulatory paradigm in the electricity sector deserves a comprehensive renovation, but the abortive approach of the Bill on certain critical issues of the sector needs to be addressed.

A landscape level analysis of entrepreneurship and sustainable energy transitions: Evidences from Gujarat, India

AbstractIn accordance with India's sustainable energy targets of achieving 175 GW of renewable energy (RE) installed capacity by 2022 and 450 GW by 2030, the role of private sector actors has become increasingly important. As presently, 96 percent of the total installed RE utilities in India are privately owned; this makes sustainability driven entrepreneurship the core of India's energy sector transition. It is vital to explore various individual and firm level, policy and market related factors that enable entrepreneurs to induce innovative RE technologies in the existing conventional energy regime in India. So, this study adopts a multi‐level perspective approach to understand what and how processes at the landscape level (national, sub‐national policy, and international concerns) interplay with niche (sustainability driven entrepreneurs) and regime (existing fossil fuel regime) to create windows of opportunities for sociotechnical transition from conventional to clean energy. This empirical study incorporates structured interviews with 54 RE entrepreneurs operating in Gujarat, to understand the role of policy and international factors in facilitating innovation and firm growth in this sector. As Gujarat contributes around 12 percent to the total RE basket in India and with its culture of innovation and entrepreneurship, ranks among the top 10 states in terms of Ease of Doing Business (2019) the study area has been delimited to this Indian state. The study finds that despite having policy regulations such as tax incentives, Renewable Purchase Obligations, safe‐guard duties, and financial subsidies to promote innovation and entrepreneurship in the RE sector, the profitability of these entrepreneurs is low. Moreover, there are loopholes in implementation of policies which further impede growth of RE entrepreneurship hence leading to hindrance in adoption and diffusion of clean energy technologies in India.

A novel approach to increase the share of renewable purchase obligation for planning of distribution network including grid scale energy storage

Abstract In recent times, producing electricity with lower carbon emissions has resulted in strong clean energy incorporation into the distribution network. The technical development of weather-driven renewable distributed generation units, the global approach to reducing pollution emissions, and the potential for independent power producers to engage in distribution network planning (DNP) based on the participation in the increasing share of renewable purchasing obligation (RPO) are some of the essential reasons for including renewable-based distributed generation (RBDG) as an expansion investment. The Grid-Scale Energy Storage System (GSESS) is proposed as a promising solution in the literature to boost the energy storage accompanied by RBDG and also to increase power generation. In this respect, the technological, economic, and environmental evaluation of the expansion of RBDG concerning the RPO is formulated in the objective function. Therefore, a novel approach to modeling the composite DNP problem in the regulated power system is proposed in this paper. The goal is to increase the allocation of PVDG, WTDG, and GSESS in DNP to improve the quicker retirement of the fossil fuel-based power plant to increase total profits for the distribution network operator (DNO), and improve the voltage deviation, reduce carbon emissions over a defined planning period. The increment in RPO and decrement in the power purchase agreement will help DNO to fulfill round-the-clock supply for all classes of consumers. A recently developed new metaheuristic transient search optimization (TSO) based on electrical storage elements’ stimulation behavior is implemented to find the optimal solution for multi-objective function. The balance between the exploration and exploitation capability makes the TSO suitable for the proposed power flow problem with PVDG, WTDG, and GSESS. For this research, the IEEE-33 and IEEE-69 low and medium bus distribution networks are considered under a defined load growth for planning duration with the distinct load demand models’ aggregation. The findings of the results after comparing with well-known optimization techniques DE and PSO confirm the feasibility of the method suggested.

Assessing the role of financing in sustainable business environment.

Speedy economy-wide transition to less carbon-intensive energy generations sources needs extra sizable financing on ground-breaking, nevertheless, risky and less carbon-intensive generation sources. Maximizing the maximum non-government financing needs using the appropriate policy tools, however, fiscal strategies and directives have been thoroughly studied, systematic quantifiable indications about the impacts of government explicit financing is inadequate. We equally give an initial measurable calculation of the impact of government explicit financing on non-government financing into conventional electricity generation sources for 22 OECD nations in the year 2001-2018. Applying FGLS and non-dynamic and non-static GMM regressors, we discover that government financing unilaterally has an explicit and nevertheless reliably the most impacts on non-government financing movements compared to feed-in tariffs (FiTs), taxes, and renewable purchase obligations (RPS) in all and regarding wind and solar sources differently. Ramifications for policy geared towards fast-tracking the energy transition are deliberated. We highlighted those important dedications to scale-up wind and solar energy demands organized by financiers such as asset funding. Furthermore, to arrive at the energy crossover to a carbon-free power system, government and non-government financiers have to continue financing and expand their activities in financing studies, demonstration, and initial scale-up. We reveal that the delivery of government finance is directly correlated with non-government funding movements. Furthermore, we postulate that government policy incentives for non-government financing, nevertheless, have impacts of unconventional energy sources share on non-government financing more than those of FiTs. Ultimately, the supply of conventional fuels is a significant impediment to solar energy financing, while the existence of other sources of cleaner energies promotes non-government climate finance.

Cost of avoided carbon: Optimizing power supply in southern India

Southern India houses over 49% of the total renewable energy capacity in India. This paper analyses the power supply situation in this region for year 2018 to evaluate the impact of renewable energy policies on energy costs and the resulting cost of avoided carbon. An optimisation model is built using GAMS. Model results show that the cost of absorbing renewable energy due to the “must run” policy for solar and wind energy plants ranges from $1.9/tCO2 to $4.5/tCO2 across states in the region, over and above the carbon tax of $5/tCO2 levied on all electricity consumers in India through the coal cess. ‘Must run’ status implies that the evacuation of power from solar and wind power plants should not be curtailed for factors other than grid or equipment safety. The total additional cost due this policy ranges from $200 to $350 million/year. Inter-regional transfer of renewable energy after meeting the mandated renewable purchase obligations in the region, is suggested as one possible route to reduce the financial burden on distribution utilities. This would reduce the unit cost of energy by about 1–7% across the states. Validating the model results against actual data for the year 2018 suggests that regulatory constraints and policy interventions have reduced the solution space for reasonable cost-based optimisation in Southern India.

Drivers of solar deployment in India: A state-level econometric analysis

India has ambitious solar energy targets of 100 GW by 2022, including 60 GW at large-scale solar and 40 GW at small-scale solar. While India has made considerable progress in meeting these targets, with 22 GW of solar deployment in 2018, it has a long way to go. Given that solar deployment in India is now largely driven by states, this study strives to understand state-level drivers for solar deployment in India, so as to inform future policy making for reaching India's solar targets. Using econometric techniques – a time series cross sectional regression with fixed effects – over a panel dataset over 11 years (2009–2019) of Indian states, it explores policy, economic, and structural drivers of solar deployment. The key results indicate the importance of two policies – the Renewable Purchase Obligations and Solar Parks – in reaching India's solar target. It may be postulated that these learnings would also be useful for other developing countries with significant solar ambitions. Further, while no further evidence of policy effectiveness is found, more results are expected to emerge as access to more and better data becomes available.

Drivers of Solar Deployment in India: A State-Level Econometric Analysis

India has ambitious solar energy targets of 100GW by 2022, including 60GW at large-scale and 40GW at small-scale. While India has made considerable progress in meeting these targets, with 22GW of solar deployment in 2018, it has a long way to go. Given that solar deployment in India is now largely driven by states, this study strives to understand state-level drivers for solar deployment in India, so as to inform future policy making for reaching India’s solar targets. Using econometric techniques – a time series cross sectional regression with fixed effects – over a panel dataset over 11 years (2009-2019) of Indian states, it explores policy, economic, and structural drivers of solar deployment. The key results indicate the importance of two policies – the Renewable Purchase Obligations and Solar Parks – in reaching India’s solar target. We also postulate that these learnings would also be useful for other developing countries with significant solar ambitions. While we do not find further evidence of policy effectiveness, we expect more results to emerge as access to more and better data becomes available.

Environmental Constrained Optimal Hybrid Energy Storage System Planning for an Indian Distribution Network

In recent days, aiming for power generation with less carbon emission, led to the high penetration of renewable energy into the distribution grid. To improve the intermittency caused by renewables and to increase the grid flexibility, grid integrated Energy Storage Units (ESUs) are proposed as the promising solution in the literature. However, considering the investment cost, ESUs are optimally placed by satisfying the network electrical constraints. On the other hand, consideration of environmental impacts and other practical constraints are also equally important. Therefore, in this article, on top of grid performance parameters, realistic parameters that may affect the location and its size such as (1) environmental impact, (2) land requirement & its associated cost for ESU installation and (3) renewable purchase obligation are formulated in the objective function. Decision making on ESU installation is a planning activity, which follows uncertainty. Consequently, it is essential to model the uncertainty parameters into the objective function, for better planning. In this article, optimal planning of hybrid ESUs based on realistic parameters along with uncertainty is addressed. For this study, a practical 156-bus distribution system of Dehradun district, India is considered. From the results obtained, it is evident that, formulating hybrid ESU constrained with the environmental impact has significantly decreased the emission of CO2 with maximum grid stability.

Assessment of Factors Affecting Onshore Wind Power Deployment in India

Abstract The Present study focuses on the impact of various factors on the growth of wind power generation in seven most wind energy prone states of India, that contain 97 % of India’s total wind power potential. The impact of state-wise policy parameters Feed-in Tariff (FIT) rate, Renewable Purchase Obligations (RPO) and Power Purchase Agreement (PPA) are evaluated in terms of aggregate policy indices that indicate the likelihood of wind power deployment in that state, through multivariate statistical analysis. The wind energy technology with reference to wind turbine specific policies, scaling of the project, the impact of hybrid policy, grid-related technological advancements and the improvement of capacity utilization factor (CUF) are discussed. Further, the impact of per capita net domestic product (PCNDP) and power demand-supply scenario are assessed. It was found that these two factors are non-influential on wind power growth. The outcome of the present study is that aggregate policy indices, captive/third party use of feasibility, presence of repowering policy, actual CUF obtained at the location, delay in cash flow and total available power potential are the factors that significantly influence the growth of cumulative installed capacity. This study provides an insight for policymakers for a quantitative assessment of the existing policies along with other factors and assists the project developers to compare and identify suitable locations for wind power projects in the near future. The exchange rate of 1 USD ($) = 69.38 INR (₹) has been taken throughout the manuscript.

Factors influencing grid interactive wind power industry in India

Increasing wind power capacities demand increased private sector participation while states are responsible for the renewable projects as well as for achieving their renewable targets. The paper aims at identifying the influencing factors in scaling up of grid interactive wind power through the lens of entrepreneurs and state policies. Adequate tariff, savings on power expenditure in industries, renewable purchase obligation (RPO) targets, long-term power purchase agreements, liberal energy banking and favourable open access policies are found to be encouraging while insufficient tariff, delayed payments, policy uncertainties, limitations in energy banking and difficult land processes are counted as barriers. Country level analysis reveals that presently the installed capacities are unable to respond to the state wind tariff though it strongly responds to the power tariff for industries. Suggestions to develop a policy scenario wherein the installed capacities respond to the state tariff are proposed. The scope of wind power is to be enhanced through favourable open access policies and high RPO targets.

Factors influencing grid interactive wind power industry in India

Increasing wind power capacities demand increased private sector participation while states are responsible for the renewable projects as well as for achieving their renewable targets. The paper aims at identifying the influencing factors in scaling up of grid interactive wind power through the lens of entrepreneurs and state policies. Adequate tariff, savings on power expenditure in industries, renewable purchase obligation (RPO) targets, long-term power purchase agreements, liberal energy banking and favourable open access policies are found to be encouraging while insufficient tariff, delayed payments, policy uncertainties, limitations in energy banking and difficult land processes are counted as barriers. Country level analysis reveals that presently the installed capacities are unable to respond to the state wind tariff though it strongly responds to the power tariff for industries. Suggestions to develop a policy scenario wherein the installed capacities respond to the state tariff are proposed. The scope of wind power is to be enhanced through favourable open access policies and high RPO targets.

Planning of rewa ultra mega solar power project (750 MW) at Rewa, Madhya Pradesh

MNRE has set up an ambitious national target for solar power, hence it is important that the States take initiative and relocate liabilities like RPO, etc behind the development of large scale solar projects. Rewa Ultra Mega Solar Limited (RUMSL) has been incorporated as a joint venture company with equal shareholding between MPUVNL (Madhya Pradesh Urja Vikas Nigam Limited), Bhopal Govt. of MP undertaking and SECI (Solar Energy Corporation of India), Delhi, Govt of India undertaking. The 750 MW Rewa Ultra Mega Solar (RUMS) project in the Gurh Tehsil, Rewa District is one such example of a State taking a proactive and leadership role in structuring the solar power project working in collaboration with the Government of India (Govt. India) and multilateral institutions such as World Bank and IFC. Planning of such Mega Project/Solar Park play a vital role in enhancing the renewable power. (MNRE, Akshay Urja Magazine(s) February 2011 (Vol 4), August 2016 (Vol 10), June 2014 (Vol 7)). The power produced from 750 MW Rewa project would be inject into the national grid at its onsite periphery which would be utilized by Delhi Metro Rail Cooperation for meeting its day load and MP Power Management Company Ltd for complying to its Renewable Purchase Obligation. (IREDA, Energy Next Magazine(s), May 2017, April 2017, June 2017); (MNRE Scheme/Documents).

Model-based approach for planning renewable energy transition in a resource-constrained electricity system-A case study from India

Summary Globally, electricity systems are going through transitions. The contributions from renewable energy-based power generation, both in installed capacity and electricity generation, are moving from marginal to the mainstream. India is not an exception; it is aggressively pursuing this transition by fixing steep targets for renewable capacity additions. While the cost of renewable energy sources is expected to fast reach grid parity, the policy interventions play a critical role in ramping up the efforts to support the proposed investments in renewable capacity and renewable electricity generation. In this respect, this research attempts to analyze the effectiveness of renewable energy policies such as Renewable Purchase Obligation (RPO) and Renewable Energy Certificate mechanisms in tapping the renewable energy potential in India. We propose a mixed-integer linear programming model-based approach to evaluate the effectiveness of the above interventions in the Indian context. The model is developed and validated as a low carbon electricity planning tool to optimally meet the dynamic electricity demand and RPO targets as well as to manage the unmet total electricity demand and RPO targets. The Karnataka state electricity system (a state in south India) is chosen as a case study. The results suggest that Karnataka Electricity System is moving toward a sustainable renewable energy future even without any support from nonsolar Renewable Energy Certificate policy. However, policy interventions are critical for optimally utilizing the solar generation capacity.

Role of targeted policies in mainstreaming renewable energy in a resource constrained electricity system: A case study of Karnataka electricity system in India

India is aggressively pursuing its renewable energy capacity expansion goals. Targeted policies such as Feed-in Tariff (FIT), Renewable Purchase Obligation (RPO) and Renewable Energy Certificate (REC) are introduced to stimulate renewable energy capacity expansion as well as generation. Currently, Indian power utilities treat RPO targets as a cost-burden, and therefore there is prevalence of non-compliance. Even other policies, such as FIT and RECs, in their present form, have failed to influence increase in renewable electricity supply. This has lead us to raise an important question whether these policies are adequate for building a cost-effective renewable energy-based low carbon electricity system for India. In this paper, we discuss the impact of above targeted policies in increasing the share of renewable electricity generation in the case of Karnataka State Electricity System. Various scenarios are developed and analysed using mixed-integer programming model to study the impacts. The results suggest that optimally managed FIT and REC schemes can provide opportunities for utilities to benefit from reduced costs. Overall, the above policies are inadequate, and introduction of market-based incentives, which expand the scope of trading in renewable energy certificates, are essential to achieve the desired objectives.

An Exploratory Study of Renewable Power Sector in India

Indian power generation sector has increased by 40% from 199 GW in FY12 to over 327 GW in FY17 to become the fifth largest power generation sector globally. India‘s power transmission network has also grown in sync with the generation sector to enable the evacuation of additional power produced. Renewable power has played a pivoted role in this expansion with its increased contribution in the overall generation mix from 24.5 GW in FY12 to over 57.3 GW in FY17. This paper discusses several drivers such as government’s renewable power targets, Central and state-level incentives, declining technology costs and facilitating sale of renewable power along with others that continue to outpace the barriers prevalent around poor financial condition of State Electricity Boards, challenges in renewable integration, concerns regarding sustainability of low renewable power tariffs and non-enforcement of renewable purchase obligations. The paper also an outlook of the overall renewable as well as solar and wind technology space.

Renewable Energy and Policy Mechanisms: A Case Study of Renewable Energy Certificates in India

Renewable energy and environmental sustainability has emerged as a policy objective in the developing world with varying degrees of action, policy effectiveness and efficiency, and sustainable growth in the infant renewable energy industry. The policy mechanisms discussed include renewable energy certificates (REC) and price limitations in the form of a price ceiling and floor, respectively. Renewable energy certificates are contractual agreements on behalf of solar energy generators and participants in the Indian Energy Exchange. In 2008, India’s National Action Policy on Climate Change set a target of Renewable Purchase Obligations (RPO’s) to produce 15% of the country’s electricity with renewable energy sources by 2020. RPO’s are obligations put forth by the national government that state that electricity generators must contract a percentage of their electricity volume from renewable energy sources rather than conventional sources such as hydropower or nuclear facilities. For example, a electricity generator or distributor may have an RPO of 5%; thus, they need to enter the Indian Energy Exchange to purchase on a given day 5% of their estimated retail load responsibility (volume) in REC’s as to contractually bind the agreement between electricity generators and distributors and renewable energy generators to guarantee production and meet the RPO. For the purposes of this paper, REC’s for solar energy will only be considered for analysis as non-solar REC’s are aggregated regardless of type into a non-solar REC category.

In Search of Structured Business Model for Renewable Energy Expansion in India

While overall power generation in India has been increasing over the years, the coverage of households in the energy access net (with 38% of total households or over 500 million people having no energy access) and availability of supply (at only 5-6 hours/day) are still prime concerns for the Government. In such a scenario, is renewable energy an alternative given the shortage of supply from conventional sources, with over 30,000 MW stranded power plants, commitment of the Government to set up 100 Smart Cities, High-speed/Semi-speed Rails, Industrial Corridors and more beyond that ‘power to all’ by 2022’ Through this study, an attempt has been made to understand the socio-economic-environmental impact of renewable energy expansion and examined the factors that govern the feasibility and/or viability in meeting the ambitious clean energy target of 175 GW set out by the Government. The key determinants of renewable energy are found to be functionality variation, pattern of household’s energy consumption, willingness-to-pay, behavioral change in tariff and cost, grid integration, energy efficiency and access to cheap green finance. Selective implementation of a combination of On-Grid, Off-Grid and localized Mini-Grids application and flexible revenue modality such as ‘Pay as-you-go’ in off-grid areas and ‘Net-metering’ or ‘Feed-in-tariff’ concept in grid-connected areas are best suited. Further, enforceable renewable purchase obligation, renewable generation obligation, faster and efficient implementation of renewable energy certificates as tradable commodity, carbon trading as a source of revenue, green marketing, mobilization of funds under corporate social responsibility and single procurement of all renewable energy by a centralized unit would go a long way in achieving the renewable targets.

Effectiveness of state incentives for promoting wind energy: A panel data examination

Over the last decade, India has started to concentrate earnestly on renewable energy. The Indian government, as well as different state governments, are adopting policy instruments such as feed in tariff, captive consumption, renewable purchase obligation and generation based incentive etc. aimed at renewable energy development. This paper evaluates the effectiveness of state level incentives for the development of wind energy in India. Fixed effect panel data modelling technique of econometric analysis is used to analyse the data of 26 Indian states in 11 years. The results show that feed in tariff and captive consumption are the significant predictors of wind energy development. However, renewable purchase obligation does not affect wind energy significantly.

A unified REC market and composite RPO scheme for promotion of renewable energy in India

In India, uniform price was assigned to renewable energy certificate (REC) irrespective of renewable energy (RE) type, technology, and location. Moreover REC price bands are higher than existing preferential tariff. There are distinct renewable purchase obligations (RPOs) specified for various RE types, whereas there is lack of efficient tools to check RPO compliance. Because of these reasons, REC market stabilisation is getting delayed. This paper proposes a method using plant performance multiplier to convert non-solar and solar REC to single equivalent REC with competitive REC pricing, which can be traded on unified REC market. The method combines solar and non-solar RPOs into a single composite RPO, to make RPO compliance and its checking simple and efficient. A sample illustration of the proposed method is given. The benefits offered by the proposed method in REC pricing, REC trading and RPO compliance are discussed. A comparative economic analysis of present and proposed method is reported.

Evaluating the Role of State Incentives in the Deployment of Wind Energy in India

Since 1991, demand for energy in India has grown considerably. Both governments, i.e. central and state place an array of incentives like Feed in Tariff (FIT), Captive Consumption (CG) and Renewable Purchase Obligation (RPO) at the state level, And Generation Based Incentive (GBI) and other tax incentives at central level to boost incentive in the renewable energy sector. This study empirically examines the role of above mentioned state level incentives in the development of the wind energy sector across different states. This paper use technique of Fixed Effect Panel Data Modelling of econometeric analysis on the state level data of Twently six Indian states from 2001 to 2011. The study reveals that on an average RPO is not a significant predictor for the wind energy deployment and over the period negatively affects installation. However other incentives, FIT and CG are significantly affecting wind energy development.