A market for renewable energy credits in the Indian power sector

Electricity generation from renewable energy sources in India has been promoted through a host of fiscal policies and preferential tariff for electricity produced from the same. The fiscal policies include tax incentives and purchase of electricity generated through renewable energy sources. The enactment of the Electricity Act 2003 (the Act) has lent further support to renewable energy by stipulating purchase of a certain percentage of the power procurement by distribution utilities from renewable energy sources. The renewable portfolio obligation as well as the feed-in tariff for power procurement has been specified by a number of State Electricity Regulatory Commissions (SERCs) for the respective state under their jurisdiction. A feed-in tariff determined through a cost-plus approach under a rate of return framework lacks incentive for cost minimisation and does not encourage optimal utilisation of renewable energy resources in the country. Such regulatory provisions differ across states.The prevalent practice of fixing a renewable portfolio obligation along with cost-based feed-in tariffs disregards economic efficiency. The paper proposes nationally tradable renewable energy credits scheme for achieving the targets set by the respective SERCs as renewable portfolio obligation. This would reduce the cost of compliance to a renewable portfolio obligation, and would encourage efficient resource utilisation and investment in appropriate technologies. The paper highlights its advantages and implementation issues. This paper discusses regulatory developments for promotion of renewable energy in various Indian states. The paper also identifies a number of issues related to regulations concerning renewable portfolio obligation.     

Using renewables to hedge against future electricity industry uncertainties—An Australian case study

A generation portfolio modelling was employed to assess the expected costs, cost risk and emissions of different generation portfolios in the Australian National Electricity Market (NEM) under highly uncertain gas prices, carbon pricing policy and electricity demand. Outcomes were modelled for 396 possible generation portfolios, each with 10,000 simulations of possible fuel and carbon prices and electricity demands. In 2030, the lowest expected cost generation portfolio includes 60% renewable energy. Increasing the renewable proportion to 75% slightly increased expected cost (by $0.2/MWh), but significantly decreased the standard deviation of cost (representing the cost risk). Increasing the renewable proportion from the present 15% to 75% by 2030 is found to decrease expected wholesale electricity costs by $17/MWh. Fossil-fuel intensive portfolios have substantial cost risk associated with high uncertainty in future gas and carbon prices. Renewables can effectively mitigate cost risk associated with gas and carbon price uncertainty. This is found to be robust to a wide range of carbon pricing assumptions. This modelling suggests that policy mechanisms to promote an increase in renewable generation towards a level of 75% by 2030 would minimise costs to consumers, and mitigate the risk of extreme electricity prices due to uncertain gas and carbon prices.     

An assessment of alternative carbon mitigation policies for achieving the emissions reduction of the Clean Power Plan: Case study for the state of Indiana

National carbon mitigation policy included in the Clean Power Plan (CPP) targets electric power generation facilities and may have substantial impacts at the national level. The subnational impacts will vary because the level of dependence on coal for electricity generation varies substantially across states. Indiana represents a state where the CPP impacts may be relatively large due to heavy dependence on coal for electricity generation. Therefore, this paper presents analysis of the efficacy and cost of alternative approaches to carbon mitigation policy, taking Indiana as an example.A state-level energy system model, IN-MARKAL, was developed based on the MARKAL framework to explore alternative policy scenarios. Results show that a renewable portfolio standard (RPS) is relatively cost effective in achieving carbon emissions reduction for Indiana from the perspective of the power system alone, but that the RPS may also lead to a generation mix dominated by coal and wind. Carbon cap and carbon tax outperform the RPS when considering the entire energy system modeled in IN-MARKAL, which also lead to a more diverse generation portfolio for the state.     

A comparative analysis of renewable electricity support mechanisms for Southeast Asia

This study evaluates the applicability of eight renewable electricity policy mechanisms for Southeast Asian electricity markets. It begins by describing the methodology behind 90 research interviews of stakeholders in the electricity industry. It then outlines four justifications given by respondents for government intervention to support renewables in Southeast Asia: unpriced negative externalities, counteracting subsidies for conventional energy sources, the public goods aspect of renewable energy, and the presence of non-technical barriers. The article develops an analytical framework to evaluate renewable portfolio standards, green power programs, public research and development expenditures, systems benefits charges, investment tax credits, production tax credits, tendering, and feed-in tariffs in Southeast Asia. It assesses each of these mechanisms according to the criteria of efficacy, cost effectiveness, dynamic efficiency, equity, and fiscal responsibility. The study concludes that one mechanism, feed-in tariffs, is both the most preferred by respondents and the only one that meets all criteria.     

A qualitative factor analysis of renewable energy and Sustainable Energy for All (SE4ALL) in the Asia-Pacific

This study assesses the factors responsible for the success and failure of renewable energy access programs in Bangladesh, China, Laos, Mongolia, Nepal, Sri Lanka, India, Indonesia, Malaysia, and Papua New Guinea. Based on 441 research interviews over the course of four years, site visits to 90 renewable energy facilities, and focus groups with almost 800 community members in 10 countries, this study develops a series of overarching qualitative factors that correlate with programs that met their targets, sometimes ahead of schedule, and produced measurable benefits exceeding costs. The inverse of these factors is associated with programs that did not meet their targets, were behind schedule, and/or produced measurable costs exceeding benefits. It concludes by offering 10 lessons for energy analysts and development practitioners concerning appropriate technology, income generation, financing, political leadership, capacity building, programmatic flexibility, marketing and awareness, stakeholder engagement, community ownership, and technical standardization.     

Impact of distributed and independent power generation on greenhouse gas emissions: Sri Lanka

Sri Lanka has a hydropower dominated power system with approximately two thirds of its generation capacity based on large hydro plants. The remaining one third are based on oil fired thermal generation with varying technologies, such as oil steam, Diesel, gas turbines and combined cycle plants. A significant portion of this capacity is in operation as independent power plants (IPPs). In addition to these, Sri Lanka presently has about 40 MWs of mini-hydro plants, which are distributed in the highlands and their surrounding districts, mainly connected to the primary distribution system. Further, there are a few attempts to build fuel wood fired power plants of small capacities and connect them to the grid in various parts of the country.

The study presented in this paper investigates the impact of these new developments in the power sector on the overall emissions and the greenhouse gas (GHG) emissions in particular. It examines the resulting changes to the emissions and costs in the event of developing the proposed coal power plant as an IPP under different investment and operational conditions. The paper also examines the impact on emissions with 80 MWs of distributed power in different capacities of wind, mini-hydro and wood fired power plants.

It is concluded that grid connected, distributed power generation (DPG) reduces emissions, with only a marginal increase in overall costs, due to the reduction in transmission and distribution network losses that result from the distributed nature of generation. These reductions can be enhanced by opting for renewable energy based DPGs, as the case presented in the paper, and coupling them with demand side management measures. It is also concluded that there is no impact on overall emissions by the base load IPPs unless they are allowed to change over to different fuel types and technologies.     

Greenhouse gas emission mitigation in the Sri Lanka power sector supply side and demand side options

Sri Lanka has had a hydropower dominated electricity generation sector for many years with a gradually decreasing percentage contribution from hydroresources. At the same time, the thermal generation share has been increasing over the years. Therefore, the expected fuel mix in the future in the large scale thermal generation system would be dominated by petroleum products and coal. This will result in a gradual increase in greenhouse gas (GHG) and other environmental emissions in the power sector and, hence, require special attention to possible mitigation measures.

This paper analyses both the supply side and demand side (DSM) options available in the Sri Lanka power sector in mitigating emissions in the sector considering the technical feasibility and potential of such options. Further, the paper examines the carbon abatement costs associated with such supply side and DSM interventions using an integrated resource planning model, which is not used in Sri Lanka at present. The sensitivities of the final generation costs and emissions to different input parameters, such as discount rates, fuel prices and capital costs, are also presented in the paper. It is concluded that while some DSM measures are economically attractive as mitigation measures, all the supply side options have a relatively high cost of mitigation, particularly in the context of GHG emission mitigation. Further it is observed that when compared with the projected price of carbon under different global carbon trading scenarios, these supply side options cannot provide economically beneficial CO₂ mitigation in countries like Sri Lanka.     

美国加州可再生能源配额制及对我国的启示

配额制本质上是一种对可再生能源开发的激励机制,它的实施需要具备一定的前提条件,目前仍处于不断探索和发展阶段。配额制的实质是以最低成本开发可再生能源,它通常需要依托一个绿色证书市场。任何配额制基本上都包含了配额承担主体及合格的发电类型、配额目标的确定及分解、运作机制、成本分摊与惩罚措施等内容。世界上没有任何两个国家或地区的配额制是完全一致的,均是根据本国或本地区的实际情况而制定。加利福尼亚州是美国可再生能源发展较快,也是最早实施配额制的联邦州之一。加州配额制的配额承担主体主要是为终端用户供电的电力企业;运作机制是通过绿色证书来代替物理计量,以证书数量来反映配额承担主体的履约情况;实现配额义务的成本是通过终端销售电价疏导出去的。这些与英国和日本的配额制相同,而差异性体现在配额目标形式不同、指标分解原则不同以及对不同类型可再生能源的激励程度不同。我国在可再生能源配额制设计中需要关注与现行可再生能源政策的衔接、地区配额指标的差异化设计、地方政府的责任、可再生能源电量的计量以及保障措施等问题。     

The role of public policy in optimizing renewable energy development in the greater southern Appalachian mountains

This research presents a third component of a comprehensive decision support system for energy planning that allows for combining existing electricity generating capabilities with increased use of renewable energy sources. It focuses on energy planning at the regional level, and concentrates specifically on the greater southern Appalachian mountains of the eastern United States: a region that was chosen for analysis not only due to its heavy dependence on coal for electricity, but also because of its potential for increased use of wind and solar power. Previous research used a geographic information system (GIS) model for identifying renewable energy potential to provide input data for a multi-objective linear programming (MOLP) model to determine the optimal constrained mix of renewable energy sources and existing fossil fuel facilities by balancing annual generation costs against the corresponding greenhouse gas emissions. This new component of the system analyzes three potential public policies—renewable portfolio standard, carbon tax, and renewable energy production tax credit—that have been used to foster increased renewable energy usage. These policies require minor modifications to the MOLP model for implementation. The results of these policy cases were then analyzed to determine the impact that these policies have on generation cost and pollution emissions within the region.     

Demand response with locational dynamic pricing to support the integration of renewables

Electricity production from centralised and decentralised renewable energy resources in Europe is gaining significance, resulting in operational challenges in the electricity system. Although these challenges add to the locational and time dependency of the underlying cost of operating the system, this variability in time and location is not reflected in residential tariff schemes. Consequently, residential users are not incentivised to react to varying system conditions and to help the integration of renewable energy resources. Therefore, this paper provides a theoretical framework for designing a locational dynamic pricing scheme. This can be used to assess existing tariff structures for consumption and injection, and can serve as a theoretical background for developing new tariff schemes. Starting from the underlying costs, this paper shows that the potential for locational dynamic pricing depends on the locational and time dependency of its cost drivers. When converting costs into tariffs, the tariff design should be determined. This includes the advance notice of sending tariffs to users, and the length of price blocks and price patterns. This tariff design should find a balance between tariff principles related to costs, practicality and social acceptability on the one hand, and the resulting demand response incentive on the other.     

Cost-effectiveness of renewable electricity policies

We analyze policies to promote renewable sources of electricity. A portfolio standard (RPS) raises electricity prices and primarily reduces gas-fired generation. A knee of the cost curve exists between 15% and 20% goals for 2020 in our central case, and higher natural gas prices lower the cost of greater reliance on renewables. A renewable energy production tax credit lowers electricity price at the expense of taxpayers, which limits its effectiveness in reducing carbon emissions, and it is less cost-effective at increasing renewables than a portfolio standard. Neither policy is as cost-effective as a cap-and-trade policy for achieving carbon emission reductions.     

Financial impact of energy efficiency under a federal combined efficiency and renewable electricity standard: Case study of a Kansas “super-utility”

Historically, local, state and federal policies have separately promoted the generation of electricity from renewable technologies and the pursuit of energy efficiency to help mitigate the detrimental effects of global climate change and foster energy independence. Federal policymakers are currently considering and several states have enacted a combined efficiency and renewable electricity standard which proponents argue provides a comprehensive approach with greater flexibility and at lower cost. We examine the financial impacts on various stakeholders from alternative compliance strategies with a Combined Efficiency and Renewable Electricity Standard (CERES) using a case study approach for utilities in Kansas. Our results suggest that an investor-owned utility is likely to pursue the most lucrative compliance strategy for its shareholders—one that under-invests in energy efficiency resources. If a business model for energy efficiency inclusive of both a lost fixed cost recovery mechanism and a shareholder incentive mechanism is implemented, our analysis indicates that an investor-owned utility would be more willing to pursue energy efficiency as a lower-cost CERES compliance strategy. Absent implementing such a regulatory mechanism, separate energy efficiency and renewable portfolio standards would improve the likelihood of reducing reliance on fossil fuels at least-cost through the increased pursuit of energy efficiency.     

The regional electricity generation mix in Scotland: A portfolio selection approach incorporating marine technologies

Standalone levelised cost assessments of electricity supply options miss an important contribution that renewable and non-fossil fuel technologies can make to the electricity portfolio: that of reducing the variability of electricity costs, and their potentially damaging impact upon economic activity. Portfolio theory applications to the electricity generation mix have shown that renewable technologies, their costs being largely uncorrelated with non-renewable technologies, can offer such benefits. We look at the existing Scottish generation mix and examine drivers of changes out to 2020. We assess recent scenarios for the Scottish generation mix in 2020 against mean-variance efficient portfolios of electricity-generating technologies. Each of the scenarios studied implies a portfolio cost of electricity that is between 22% and 38% higher than the portfolio cost of electricity in 2007. These scenarios prove to be mean-variance “inefficient” in the sense that, for example, lower variance portfolios can be obtained without increasing portfolio costs, typically by expanding the share of renewables. As part of extensive sensitivity analysis, we find that Wave and Tidal technologies can contribute to lower risk electricity portfolios, while not increasing portfolio cost.     

The future of the Feed-in Tariff (FiT) scheme in Europe: The case of photovoltaics

The key objective of this study is the examination of the regulatory and policy framework of the feed-in-tariff (FiT) scheme, specifically its effect on both the electricity pricing as well as the local and European renewable energy sources (RES) market, and accordingly the definition of its feasibility as a scheme for the further development and promotion of renewable energy technologies (RETs). This work discusses the FiT scheme implementation for photovoltaics (PVs) in four case study countries - Denmark, Germany, Cyprus, and Spain. A model describing the conditions under which a FiT scheme is led to collapse is also introduced and a parametric analysis towards revealing the sensitivity of the different parameters affecting it, is delivered. The study concludes with significant policy implications that should be considered for future implementation of the scheme. For the prevention of the collapse of the scheme, the tariff's value ought to be determined by each country's government based on a set of influencing factors including the operational, capital and investment costs of each RET, the standard cost of renewable energy (RE) generation and the avoidance cost, which would be regularly reviewed depending on the excess of the annual capacity.     

Lighting up a village: Community RE generating systems for the developing world

Village level cooperative generation of power from renewable energy sources like solar, wind and biomass can be a sustainable, alternative means of providing a solution independent of the grid. Lalith Seneviratne and Greg Rossel describe solutions implemented and proposed recently in a village in Sri Lanka that if rolled out on a national scale could reduce burden of debt on utilities, stimulate the national economy and improve the quality of lives of thousands of people in the region.     

Renewable energy resources,policies and gaps in BRICS countries and the global impact

This paper presents comparative yet extensive analysis of existing non-conventional renewable resources, energy policies and gaps in BRICS countries. An intelligent transformation to green economy to maintain natural resources is noted. Brazil has stable energy policies and is the leading producer of biofuels following hydropower until 2014 but supported wind and solar power development by tendering specific tariffs for energy generation from solar and wind. Russia needs improvement in its legal and regulatory framework with more incentives in energy policies. China is improving upon wind and hydropower but it needs strong policy measures to put cap on increased CO₂ emissions. India needs revision in energy policy and requires extra incentives and consumer specific energy policies for research-infrastructure and energy generation technologies. South Africa requires lessons to increase renewable energy and reduce coal mining. Moreover, BRICS countries need to redefine their energy policies based upon their existing geographical, economical, societal and environmental conditions which will help in shaping global energy policies and more financial stability. This paper recognizes the potential of BRICS to reshape the global system paralleled with minimizing CO₂ emissions. The concerted role of BRICS needs to be recognized as the leading contributor of global renewable capacity where the developed world is geared and busy to address the environmental issues.     

The BEPE – Break-Even Price of Energy: A financial figure of merit for renewable energy projects

Renewable energy is a fact, with more than 1580 GW installed worldwide growing up to 2350 GW expected for 2018 [1]. Driven by increasing conventional fuels prices and limited reserves, the energy mix for covering the world's demand is rapidly including renewable energy sources, providing carbon free energy as well as energy independence. Some studies claim the costs of renewable energy as one of the most important barriers to accelerate their deployment and reach a complete change in the energy model [2]. In this scenario, the cost of energy becomes one of the most important figures of merit for analyzing renewable energy projects. However, defining the cost of energy as figure of merit is not a trivial issue and most times is being done with different criteria, thus leading to different results difficult to compare. In this paper, a new figure of merit for renewable energy projects is presented alongside the methodology for its calculation. This figure of merit is not based on the cost of energy itself, but on the price at which this energy has to be sold in an energy market to result into a profitable project. The Break-Even Price of Energy, BEPE, is proposed as a financial indicator focused on renewable energy projects developers, and takes into account all the specific aspects of each legal and financial framework. This is of major importance when considering the present renewable energy scenario, with vast influence of local conditioning factors in the cost of energy depending on the project location and technology [3]. Thus, this indicator makes it possible to compare different specific renewable energy projects, and can really help developers to decide amongst different technologies, designs, locations, legal frameworks, etc.     

Energy,environmental and economic effects of Renewable Portfolio Standards (RPS) in a Developing Country

This paper analyses the potential of renewable energy for power generation and its energy, environmental and economic implications in Pakistan, using a bottom up type of long term energy system based on the MARKAL framework. The results show that under a highly optimistic renewable portfolio standard (RPS) of 80%, fossil fuel consumption in 2050 would be reduced from 4660 PJ to 306 PJ, and the GHG emissions would decrease from 489 million tons to 27 million tons. Nevertheless, price of the electricity generation will increase significantly from US$ 47/MWh under current circumstances (in the base case) to US$ 86/MWh under RPS80. However the effects on import dependency, energy-mix diversity, per unit price of electricity generation and cost of imported fuels indicate that, it may not be desirable to go beyond RPS50. Under RPS50 in 2050, fuel consumption of the power sector would reduce from 21% under the base case to 9% of total fossil fuels supplied to the country. It will decrease not only GHG emission to 170 million tons but also will reduce import dependency from 73% under the base case to 21% and improve energy diversity mix with small increase in price of electricity generation (from US$ 47/MWh under the base case to US$ 59/MWh under RPS 50).     

新能源发展的基本动因与主要方向

本文分析了现阶段新能源发展的基本动因不是能源危机与低碳经济,而主要是传统化石能源外部成本不断显露、交易成本日益攀升等经济性因素。围绕风能、太阳能等新能源发展,指出其技术成本、系统成本、替代成本以及成本约束制度、成本竞争态势等方面的问题与风险。最终提出提高技术、降低成本是现阶段新能源发展的主要方向。     

Renewable energy policy in Turkey with the new legal regulations

Since the energy crises in the 1970’s, public and private decision makers are considering how to achieve a sustainable transition from fossil fuel based energy to sustainable and clean energies - namely renewable energies. Combined with the improvement of energy efficiency and the rational use of energy, renewable energy can provide everything fossil fuels currently offer in terms of heating and cooling, electricity generation and transportation. Renewable energy technologies posses many long term benefits including energy security, job creation, business opportunities, sustainable development and prevention of global warming.Turkey’s population is growing at an annual rate of 1.04%. If Turkey uses only traditional energy sources, it simply will not have enough energy capacity for its population. Renewable energy sources have the potential to make a large contribution to Turkey’s sustainable and independent energy future.Turkey aims to utilize its energy potential, including from renewable sources in a cost-effective manner. Turkey targets the share of renewable resources in electricity generation to be at least 30% by 2023 has in its 2009 Electricity Market and Security of Supply Strategy. Positive achievements have been obtained in renewable energy development and manufacturing in Turkey over the past decade. The renewable energy related legislation has been intensified. To meet its 30% target, the current promotion mechanism for renewable sources of electricity relies on feed-in tariffs for different renewable energy sources. Large hydropower is already competitive to conventional fossil-based electricity, so feed-in tariffs in the new RE Law are set to facilitate expanding the deployment of other, less mature renewable energy technologies.