India plans energy trading scheme to boost renewable resources

17 March 2009

India is planning an energy trading scheme to allow businesses that need more energy to be able to buy energy certificates from those using less energy or using renewable energy.

According to the prime minister's special envoy on climate change Shyam Saran this could expand the domains of renewable energy.

Speaking at a seminar on 'Business Response to Climate Change' organised by the Confederation of Indian Industry-ITC Centre of Excellence for Sustainable Development, Saran said, the government was setting up energy benchmarks for each industry sector.

Those companies that do not meet the benchmarks would have to buy these certificates under a reward and penalty system, which could perhaps even be linked with the concept of renewable energy certificates. Saran said if this link could be established, the country could have a very fast growing market for energy efficiency and renewable energy certificates, which would be a major innovation.

"We are looking at trading mechanisms so if you are more efficient you get a certain credit, if you are less efficient you have to buy it," Saran said.

India has identified energy efficiency as one of the major aspects in its national climate change policy last year. It hopes to reduce energy consumption by at least 25 per cent in energy-intensive sectors such as power and cement.