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Key Documents & Presentations

Market Readiness Proposal
Document Language Date
PDF icon India: Final Market Readiness Proposal PPT English March 2017
PDF icon India: Final Market Readiness Proposal English February 2017
Most Recent
Document Language Date
PDF icon Resolution PA16/2017-2: Allocation of Implementation Phase Funding to India English March 2017

Market-based Approach

India has not finalized an MRP. It is expected that PMR support will:

  • Build and integrated GHG data management system and develop an off-grid Renewable Energy Certificate (REC) program; and
  • Expand  sectoral coverage of the Perform Achieve and Trade (PAT) system.

Emissions Trading

  • The Perform Achieve Trade (PAT) System is a market-based mechanism under NMEEE to enhance energy efficiency in energy intensive industries, known as Designated Consumers (DCs)
  • DCs will be given Specific Energy Consumption (SEC) targets to meet over a period of three years
  • If they surpass energy savings above the target benchmark, they qualify for earning Energy Saving Certificates (ESCerts), which could be traded with DCs who fall short of their given targets
  • All entities who do not meet their targets will need to buy ESCerts or pay penalty
  • PAT is targeted at saving 6.6 mMTOE which amounts to an avoided capacity of 5623MW over a period of three years

Carbon Tax

  • On July 1, 2010 India introduced a nationwide carbon tax of 50 rupees per metric tonne ($1.07/t) of coal both produced and imported into India
  • The carbon tax revenue will help finance a National Clean Energy Fund (NCEF)

Offset and/or Other Emission Reduction Crediting Programs

Renewable Energy Trading Certificates

  • Under Indian Electricity Act 2003, the State Electricity Regulatory Commission (SERC)s set targets for utility companies to purchase some percentage of their total power from renewable energy sources. These targets, called Renewable Purchase Obligations (RPOs), vary from state to state due to the potential of renewable energy.
  • If the utility company is unable to buy its share of renewable energy, it can compensate that by buying the Renewable Energy Certificate (REC) from the market to make up the shortfall
  • Under the REC Mechanism, when Renewable Energy is generated (solar, wind, biomass, etc), the energy is divided into two components – the physical commodity electricity and a tradable certificate, which is the REC.
  • The commodity electricity is sold to the distribution company/utility or user at a mutually agreed tariff while the REC can be traded in the exchange. The utility companies can make up for their shortfall in meeting the RPO targets by buying the RECs from the exchange
  • The denomination of each REC is 1 MWh (1 REC = 1000 units (kWh) of electricity generated). In other words, the electricity producer can sell 1 REC for every 1000 units of electricity generated.

National Context

Mitigation Target

In December 2009, India announced a voluntary target to reduce the emissions intensity of its GDP by 20 to 25 percent over the 2005 levels by 2020. The focus is on both introduction of renewable sources of energy and reduction of the demand. The National Action Plan on Climate Change (NAPCC) was announced in June 2008, and consists of 8 national missions outlining existing and future policies addressing climate mitigation and adaptation

The 8 missions are:

  1. National Solar Mission
  2. National Mission for Enhanced Energy Efficiency
  3. National Mission on Sustainable Habitat
  4. National Water Mission
  5. National Mission for Sustaining the Himalayan Ecosystem
  6. National Mission for a Green India
  7. National Mission for Sustainable Agriculture
  8. National Mission on Strategic Knowledge for Climate Change

The National Mission for Enhanced Energy Efficiency (NMEEE) will implement market-based approaches to unlock energy efficiency opportunities, estimated to be USD 35 billion. The Indian Solar Cities Programme (ISCP) will support Urban Local Bodies to prepare a plan for a minimum 10% reduction in projected demand for conventional energy in 5 years. The 2 key missions – NMEEE and ISCP – are being proposed for PMR support.

Focal Point

The Ministry of Environment and Forests (MoEF) is responsible for coordination of external support to India’s Climate Change activities and will lead the work of the PMR. The MoEF will work with the Ministry of Power on the implementation of the National Mission on Enhanced Energy Efficiency (NMEEE). The MoEF will work with the Ministry of New and Renewable Energy on the development and implementation of the Indian Solar Cities Programme (ISCP).

MoEF also serves as the nodal agency in the country for the United Nations Environment Programme (UNEP), South Asia Co-operative Environment Programme (SACEP), International Centre for Integrated Mountain Development (ICIMOD) and for the follow-up of the United Nations Conference on Environment and Development (UNCED). The Ministry is also entrusted with issues relating to multilateral bodies such as the Commission on Sustainable Development (CSD), Global Environment Facility (GEF) and of regional bodies like Economic and Social Council for Asia and Pacific (ESCAP) and South Asian Association for Regional Co-operation (SAARC) on matters pertaining to the environment.

The broad objectives of the Ministry are:

  • Conservation and survey of flora, fauna, forests and wildlife
  • Prevention and control of pollution
  • Afforestation and regeneration of degraded areas
  • Protection of the environment and
  • Ensuring the welfare of animals

These objectives are well supported by a set of legislative and regulatory measures, aimed at the preservation, conservation and protection of the environment. Besides the legislative measures, the National Conservation Strategy and Policy Statement on Environment and Development, 1992; National Forest Policy, 1988; Policy Statement on Abatement of Pollution, 1992; and the National Environment Policy, 2006 also guide the Ministry's work.

Source: Ministry of Environment and Forests of India

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