Energy Law and Policy

U NIVERSIT Y OF TOMORROW
Energy Law and

Policy
Contents
Unit 1 Energy Laws.................................................. ................................................................ 1

Unit 2 Renewable Energy Sources.......................................................................................... 10
Unit 3 Other Renewable Energy Sources...............................................................................19
Unit 4 Carbon Emissions........................................................................................................ 27
Unit 5 Law of Energy Consumption...................................................................................... 39
Unit 6 Distributed Energy Resources.................................................................................... 46

Unit 7 Affordable and Clean Energy....................................................................................... 56
Unit 8 The World Energy Trilemma........................................................................................66
Unit 9 A smart electric grid..................................................................................................... 70
Unit 10 Environmental Economics........................................................................................... 78
Unit 11 Environmental Justice................................................................................................ 88

Unit 12 Energy Justice.......... ................................................................................................... 99
Unit 13 Creating an Energy Policy.......................................................................................... 107
Unit 14 Energy Efficiency Policy Objectives, Planning and Dispute Resolution..................121
Unit 15 National Energy Policy............................................................................................... 133
Unit 16 Politics of Green Energy Policy..................................................................................... 144

Unit 1
Energy Laws
Learning Objectives Introduction
By the end of this unit, you will be Laws governing energy consumption and taxes cover
able to understand: both renewable and non-renewable energy sources.
● Main law of energy Laws pertaining to energy include case law, guidelines,
● Need for energy laws directives, legislation, and orders.
● Energy laws in India

Energy law deals with drafting, enforcing, and contesting
● UNEP guide for energy efficiency rules that control how energy is used. It controls the taxes
and renewable energy laws and usage of both renewable and non-renewable energy.
Energy laws are in place to regulate the production and
use of energy.
The taxation of energy use is likewise governed by

these rules. Topics of energy regulation include nuclear
energy, sustainable energy production, and oil and gas
management.
Main Law of Energy
A conservation law is a rule that states, “If a certain

physical quantity in an isolated physical system does not
change over time, then that quantity is conserved.” The
law of conservation of energy is a physical law that states
energy cannot be created or destroyed but can change
from one form to another.
1 Energy Laws
Another way to express this law in chemistry is that A food chain illustrates the movement of energy
the total amount of energy in a system, when kept and nutrients from one living organism to another.
separate, remains the same or is conserved.
Levels in the Food Chain - A food chain consists
One interesting aspect of the law of conservation of of different levels known as “trophic levels,” all of
energy is that it implies machines of the first type, which begin with producers that harness sunlight.
which move indefinitely, cannot function. In other Energy then progresses to organisms that consume
words, a system requires an external power source or decompose these producers. This continues
to continuously provide energy to its surroundings. until it reaches the apex predators, which are
animals typically not preyed upon by others and
Energy Conservation whose remains take longer to decompose.
Energy is divided into different types based on its

mechanisms of operation. Energy conservation is
a method to reduce the amount of energy used.
People are learning how to save energy in order to
minimize society’s impact on the environment. We
recognize the value of energy. The reduced use of
energy contributes to:
● Prolonging the availability of fossil fuels Figure 1.1: Energy transfer between trophic layers in an ecosystem
● Protecting the environment There is a certain amount of biomass at each level,

● Reducing pollution which is transferred from one level to the next.
The second law of thermodynamics explains why
Energy Flow in Ecosystem this transfer is not highly efficient. As it moves
from one level to another, only a small portion of
Energy flow in the ecosystem is a vital factor that the consumed biomass is actually converted into
enables a wide variety of living organisms to sustain usable biomass, typically with efficiencies ranging
their lives. An ecosystem is a complex network from 2% to 40%. This phenomenon is referred to as
of connections between living and nonliving environmental efficiency.
components. The study of how energy moves
through an ecosystem is known as ecological Need for Energy Laws
energetics.
Energy laws encompass taxes on both renewable
The flow of energy through ecosystems is a crucial and non-renewable energy usage. Some of the
aspect of the growth and survival of life on Earth. most significant energy laws include case law,
Nearly all energy utilized by Earth’s ecosystems legislation, guidelines, and edicts. On the other
originates from the Sun. Within an ecosystem, hand, energy policy refers to both energy policy
energy can transfer between all living and nonliving itself and the related policies.
entities.
2 Energy Laws
Power law entails regulations concerning taxes The Indian economy is heavily reliant on LNG
on gasoline, fuel extraction, and exploration. The imports and licenses. Rules and guidelines are
work on energy laws involves aspects such as pre- not issued concurrently with other energy types.
exploration activities, soil capture and arbitration, India also has a fully automated Foreign Direct
mining, permits for oil and gas acquisition, and Investment route for both the traditional power
possession rights. sector and the renewable power sector.
Energy plays a crucial role in the infrastructure of

every country. Therefore, energy security stands at
the core of any modern energy policy system and
is reflected in numerous national energy laws and
regulations. It is essential due to the significant
impact of energy on society as a whole.
Energy Laws in India
India does not have comprehensive laws that Under the central regulatory commission (power
encompass all the various aspects of energy market) regulations of 2010, FDI in power exchanges
production. The Electricity Act of 2003 addresses is further limited to 49% through the automatic
the generation, transmission, distribution, and route. In the natural gas and LNG market, India has
trading of electricity, as well as the collection of shifted from long-term contracts to medium-term
tariffs. and short-term contracts.
The 2003 Act grants the authority to hear disputes The national electricity policy of 2005 was the
to electricity regulatory commissions at both the initial step toward managing energy resources in
central and state levels. The highest authority this loosely regulated sector. The NEP of 2005 laid
under the Act is the Appellate Tribunal for Electricity the foundation for a set of institutions aimed at
(APTEL), with further appeals going to the Supreme achieving the following goals:
Court.
● Ensuring inclusion through equitable distribution
As there is no adequate legislation to regulate the and access to electricity
natural gas sector, it is currently managed by the ● Promoting economic growth through the
executive branch of the central government. The provision of reliable and affordable power
Oilfields (Regulation and Development) Act of
● Encouraging private sector participation in
1948 and the Petroleum Act of 1934 have been in
capacity expansion and efficiency improvement
place for a considerable period, providing a general
framework for these energy sources. Liquefied
In the pursuit of sustainability, the current National
petroleum gas is currently in a legal gray area,
Electricity Policy of 2021 demonstrates how the
lacking regulation and being subject to an open
2005 policy was implemented. The Samadhan
general license regime.
Scheme and the Shakthi Scheme serve as
3 Energy Laws
reminders of the government’s plans to develop the The act introduced the concept of power trading
energy sector. and facilitated open access to transmission and
distribution. Additionally, the 2014 amendments
The Electricity Act emphasized the promotion of renewable energy in
alignment with the Sustainable Development Goals
The Electricity Act of 2003 brought about significant (SDGs).
changes in the energy industry, with one of the most
crucial changes being the allowance for power The Conflict Conundrum
generation without requiring a license.
● The Goods and Services Tax does not apply to
Prior to the implementation of this act, it was the transmission of electricity from one location
necessary to obtain a license from the central to another.
electricity authority in order to generate power
● Electricity is under the jurisdiction of individual
independently. Techno-economic clearance was a
states, and each state government has its
prerequisite for this process.
own regulations regarding power plant
registration.
However, under the new law, the
requirement for Section 9 licenses ● There has been uncertainty
was eliminated and made regarding the taxation of
explicit. This change enabled renewable energy. While
private companies to play a electricity is exempt from the
larger role in power generation, Goods and Services Tax (GST),
distribution, and transmission. lawmakers have had differing
Private individuals, however, still opinions on whether renewable
require a license for the latter two sources should also be excluded
activities. from the GST.
● The Electricity Act grants private

Approximately 40% of the energy generated in entities significant freedom to generate and sell
India now comes from the private sector. Another electricity at the lowest price, which may be in
significant aspect of the Electricity Act of 2003 is conflict with competition laws.
the separation of responsibilities between the state
● Some remote areas of the country lack electricity
and central government in the domains of power
meters.
generation, transmission, and distribution.
● Issues related to land acquisition and
Since the act does not provide specific guidelines environmental are the concerns in constructing
on unbundling, each state has established its own power plants.
set of rules in this regard. Furthermore, following ● India’s challenging financial situation and policy
the implementation of the Electricity Act of 2003, paralyse the country.
the ministry took steps to ensure fairer electricity
● Slow progress in the energy sector is exacerbated
prices.
by competition from private entities.
4 Energy Laws
India faces significant energy challenges. Despite approximately 80GW comprises solar and wind
being the third-largest electricity producer globally, facilities.
some regions still experience electricity shortages,
and reliance on outdated energy sources remains. Legal Framework
It is imperative to establish comprehensive energy
laws, with the government playing a dominant role India operates under a federal and unitary system,
in the energy sector. and the constitution delineates the distribution of
executive and legislative powers between the union
India has prioritized the use of energy from natural and the states.
sources. Implementing smart grids, granting greater
authority to state governments for distribution Electricity plays a significant role within this
and supply divisions, and reducing cross-subsidy framework of separated powers. Both the national
charges will stimulate the sector’s growth. parliament and state legislatures have the authority
to enact laws pertaining to electricity. However, in
Additionally, the government aims to transition cases of conflict, central laws take precedence
to electric vehicles by 2030. The path over state laws.
to sustainability lies in leveraging
renewable resources. However, The primary legislation governing
collaborative efforts are the electricity sector in India is
necessary to address the the Electricity Act of 2003.
existing complexity of laws Presently, India does not have
and regulations. specific laws dedicated to
renewable energy.
Renewable Energy Regulations in
India Renewable energy falls within the
purview of the electricity industry
As the world combats climate change, and is regulated by the Electricity Act.
India has made the decision to gradually transition This legislation establishes guidelines for the
from conventional methods of electricity generation generation, transmission, distribution, trading, and
to clean and renewable alternatives. In 2008, both utilization of electricity.
the federal and state governments launched India’s
National Action Plan on climate change, along The Ministry of Power is responsible for ensuring
with a major initiative known as the National Solar compliance with the Electricity Act and monitoring
Mission. the growth of the country’s electricity sector. On
the other hand, the Ministry of New and Renewable
With the aim of embracing clean and renewable Energy oversees the growth and development
energy, the country has set a target to achieve of renewable energy in India. It serves as the
a capacity of 450GW by 2030. India has already government agency responsible for all matters
established renewable energy plants with a related to renewable energy’s progress and
combined capacity of over 100GW, of which advancement.
5 Energy Laws
Policy Initiatives and development of renewable energy in India. It
serves as the government agency overseeing all
India operates under a federal and unitary system, matters related to renewable energy’s progress and
and the constitution outlines the distribution of advancement.
executive and legislative powers between the union
and the states. India possesses numerous renewable energy
sources, with solar and wind energy being the
Within this separation of powers, electricity is a most extensively used. Since 2015, both the federal
common factor. Both the national parliament and government and most state governments have
state legislatures have the authority to enact laws implemented policies that facilitate private sector
regarding electricity. However, in the event of a investments, including foreign investors, in the
conflict, central laws take precedence over state renewable energy sector.
laws.
According to the Electricity Act, the federal
The main legislation governing the electricity sector government must collaborate with state
in India is the Electricity Act of 2003. Currently, India governments to establish a National Electricity
does not have specific laws pertaining to renewable Policy. This policy outlines strategies to expedite
energy. the development of the electricity sector while
optimizing resources such as coal, natural gas,
Renewable energy is considered part of the nuclear materials, hydro, and renewable energy
electricity industry and is governed by the Electricity sources.
Act. This legislation establishes regulations for the
generation, transmission, distribution, trading, and The government also releases a National Electricity
utilization of electricity. Plan every five years, which provides a short-term
roadmap for the electricity sector.
The Ministry of Power is responsible for ensuring
compliance with the Electricity Act. Its primary The Electricity Act also mandates the publication of
role is to monitor the growth of India’s electricity a National Tariff Policy. The first policy was released
sector. Conversely, the ministry of new and in 2006, and the most recent one was issued in
renewable energy is responsible for the growth 2016. It’s noteworthy that the 2016 national tariff
policy places significant emphasis on:
● Promoting the use of clean energy sources for

electricity generation
● Encouraging private sector participation in the

construction of renewable energy plants
Previously, the government introduced a

generation-based incentive plan to incentivize the
development of wind and solar projects. Under this
6 Energy Laws
plan, electricity generators receive compensation a single-part tariff. Their revenue is generated
for each unit of electricity they contribute to the through electricity generation and transmission
grid during the first 10 years of operation. to other locations. The “must-run” status ensures
that wind and solar plants are not arbitrarily shut
Generators also enjoy an accelerated depreciation down or curtailed when the grid infrastructure is
benefit, enabling businesses and industries utilizing overloaded.
solar power in India to write off their investments
in wind and solar at a faster rate than other fixed The Ministry of Power occasionally exempts solar
assets. and wind power from interstate transmission
system charges when transmitted through the
Regulatory commissions established by the central grid. Such exemptions are communicated
Electricity Act have established rules requiring through notifications issued by the ministry .
distribution licensees to procure a minimum
amount of renewable energy as part of their overall Regulatory Framework
demand. This ensures greater utilization of
electricity from renewable sources. In India, there are numerous
regulations governing electricity.
Most state governments have The Electricity Act outlines
implemented policies to the rules for establishing the
encourage private investment Central Electricity Regulatory
in wind and solar energy. Some Commission and the State
of the benefits provided by Electricity Regulatory
these policies include: Commissions.
● Streamlined access to land for These commissions possess

project setup both legislative and judicial powers.
They can create primary and secondary
● Expedited conversion of land use for
laws, and they also have judicial authority to
renewable energy development
resolve disputes between electricity generators
● Preferential procurement of renewable power by
and distribution licensees, as well as between
state distribution licensees
distribution licensees and consumers.
● Preferential allocation of evacuation capacities
The Appellate Tribunal for Electricity (APTEL),
● Streamlined transmission infrastructure
a specialized body responsible for handling
Assigning “must-run” status to wind and solar electricity disputes, has the jurisdiction to hear
power plants has significantly contributed to the appeals against orders issued by either the central
large-scale growth of solar power in India. Unlike or state commissions. Decisions made by APTEL
traditional power plants, which operate under a can be further reviewed by the Supreme Court of
two-part tariff, wind and solar power plants have India upon request.
7 Energy Laws
The central and state commissions undertake waste, and other sources approved by the Ministry
various tasks, including: of New and Renewable Energy.
● Setting electricity prices for sales at both the Similarly, state commissions establish generic
central and state levels. tariffs through a public hearing process, based
on fixed generic parameters or cost components
● Establishing regulations for purchasing electricity
specified in tariff determination regulations.
generated from different sources, including
renewables.
Generators can voluntarily accept these rates and
● Adjudicating disputes.
sell power to a distribution licensee. For such
● Regulating electricity transmission. projects, the power purchase agreements are
submitted to the state commission for approval.
● Granting licenses.
Once approved, the generator has the right to sell
According to the Electricity Act, there are two electricity to the distribution licensee at the agreed-
methods of determining tariffs: upon rate.
● Tariffs are established by the The act states that if a tariff is
central and state commissions determined through competitive
based on the tariff rules they bidding, it must be adopted by the
have issued. central or state commission,

and the agreement between
● Tariffs are determined
the generator and licensee
through competitive bidding,
must be approved.
following standard bidding
rules and documents provided
To ensure secure payment, these
by the federal government.
power purchase agreements typically
require a letter of credit from the buyer
Currently, the Central Electricity
(the distribution licensee) to the generator.
Regulatory Commission (Terms and Conditions
for Tariff Determination from Renewable Energy
Way Forward
Sources) Regulations of 2017 guide the Central
Commission in setting generic tariffs for renewable
The Electricity (Amendment) Bill, 2020, was
power plants. These regulations define “renewable
introduced by the federal government to propose
energy” as electricity derived from renewable
changes aimed at promoting the growth of the
energy sources that meets grid-quality standards.
renewable energy sector.
The regulation broadens the definition of “renewable

For instance, the bill seeks to establish the
energy sources” to include small hydro, wind, solar
Electricity Contract Enforcement Authority as the
(including its integration with combined cycle),
sole entity responsible for settling disputes related
biomass, biofuel cogeneration, urban or municipal
to power purchase agreements.
8 Energy Laws
This authority will:
● Ensure the implementation of payment security mechanisms for power purchase contracts.
● Impose fines on distribution licensees failing to fulfill their renewable purchase obligations.
● Grant the government the authority to announce a National Renewable Energy Policy.
● Enforce a minimum obligation to purchase renewable energy.
● This bill, along with the draft National Electricity Policy 2021 and other related policies, aims to facilitate
necessary reforms to achieve energy efficiency, keep pace with technological advancements, and meet
climate change goals.
Summary
● Energy law is a branch of law that deals with the utilization and taxation of both renewable and non-
renewable energy sources. It encompasses case law, rules, regulations, statutes, and edicts related to
energy.
● Energy conservation involves reducing energy consumption to allow the energy supply to replenish. Often,
the most effective approach is to switch to an alternative energy source. Conserving energy is essential for
saving money and preserving resources for longer periods.
● The law of conservation of energy states that energy cannot be created or destroyed but can only be
transformed from one form to another. Thus, unless external energy is added, a system will always maintain
the same total energy.
● It is important to note that Energy Law focuses on the creation, enforcement, and questioning of laws
governing energy usage. These laws regulate the generation, collection, and taxation of energy.
● Energy regulation encompasses various aspects such as nuclear power, the development of clean energy,
oil and gas regulation, and more.
9 Energy Laws
Unit 2
Renewable Energy Sources
By the end of this unit, you will be

Renewable energy comes from natural resources that
able to understand:
can be replaced faster than they are used up. Sunlight
● Renewable and Green
and wind are two examples of sources that are constantly
energy
replenishing. Renewable energy sources are abundant
● Solar power, Geothermal and and diverse.
Wind energy
These resources regenerate naturally, but they have a
● Biomass energy
limited energy output per unit of time. They are referred
to as “renewable resources.”
Renewables are increasingly replacing “dirty” fossil fuels

in the power sector. This shift results in reduced carbon
emissions and other forms of pollution being released
into the atmosphere. Furthermore, renewables generate
minimal or no harmful emissions when utilized, making
them crucial in mitigating the worsening effects of global
warming.
However, not all “renewable” energy sources are

environmentally beneficial. Biomass and large
hydroelectric dams entail challenging trade-offs
concerning wildlife, climate change, and other issues.
As the adoption of renewable energy continues to

soar, one of the primary objectives is to modernize the
10 Renewable Energy Resources
electricity grid, making it smarter, safer, and more Here are some reasons why accelerating the
interconnected across regions. transition to clean energy is essential for a
healthy and livable planet, both now and for future
Renewable Energy generations:
Renewable energy, also known as “clean energy,” We can Obtain Energy from Various Sources: Every
is derived from natural sources or processes that country has access to renewable energy sources,
continuously generate more energy. For instance, but not all of their potential has been fully utilized
the sun and wind consistently provide energy, albeit yet. The International Renewable Energy Agency
their availability depends on time and weather (IRENA) predicts that by 2050, renewable energy
conditions. should account for 90 percent of the world’s
electricity.
While many perceive renewable energy as a new
technology, harnessing the power of nature for Renewables offer countries a way to reduce
heating, transportation, lighting, and other purposes their dependence on imports. They contribute to
has been practiced for a long time. economic diversification and shield economies
from fluctuations in fossil fuel prices. Moreover,
The significance of renewable energy sources is they facilitate job creation, foster economic
increasing as we discover new and more affordable development, and help alleviate poverty
methods of capturing and storing energy from the
sun and wind. Renewable energy is expanding on Renewable Energy is Cheaper: It is the most
both large and small scales, with solar panels, for affordable means of power generation. The prices
example, enabling individuals to sell excess power of renewable energy technologies have been
back to the grid. rapidly declining. Between 2010 and 2020, the cost
of solar power led to an 85% reduction in electricity
Renewable energy plays a crucial role in ensuring a costs. Onshore and offshore wind energy costs
sufficient energy supply and reducing greenhouse also decreased by 56% and 48% respectively.
gas emissions. Its utilization can help decrease
dependence on imported energy and the By 2030, renewable sources could potentially
consumption of fossil fuels, which are the leading generate nearly 65 percent of the world’s electricity.
source of carbon dioxide emissions. This transition would not only lower carbon
emissions but also reduce electricity costs.
Renewable Energy is Healthier: The World Health

Organization (WHO) reports that nearly 99 percent
of the world’s population breathes unhealthy air,
leading to severe health issues. Each year, over 13
million people worldwide die due to preventable
environmental problems, such as air pollution.
Adopting clean energy sources like solar and wind

power can prevent pollution hazards and mitigate not all renewable energy sources are necessarily
climate change. considered green.
Renewable Energy Makes Economic Sense: In Water power serves as an example. Hydropower
2020, the fossil fuel industry received subsidies harnesses energy from swiftly moving water, which
amounting to $5.9 trillion, including direct is a renewable resource. However, some argue that
subsidies, tax breaks, and unaccounted health and extensively utilizing water power is not considered
environmental costs. To achieve net-zero emissions green due to associated industrialization and
by 2050, an investment of approximately $4 trillion deforestation for constructing large hydroelectric
per year in renewable energy, including technology dams.
and infrastructure, is required until 2030.
Benefits of Green Energy
Additionally, efficient and reliable renewable
technologies enhance the resilience of the energy Renewable energy sources, such as the sun, wind,
system, reducing vulnerability to market shocks. water, waste, and geothermal heat, are abundantly
They also improve energy security available. They are naturally replenished
and contribute to global warming and have minimal or no pollution or
prevention. greenhouse gas emissions.
Green Energy Here are some of the ways

renewable energy helps:
Green energy is the utilization
of energy sources that can be ● Clean Solution: Green
replenished. Renewable energy energy is clean, meaning it does
refers to energy derived from not emit greenhouse gases into
sources that are inexhaustible and the atmosphere. Greenhouse gases
can be repeatedly used. Some examples contribute to air pollution and are a
of these sources include wind, water, waste leading cause of global warming.
(biomass), and the sun. ● Cost-Effective: Green energy is affordable and
can help reduce electricity expenses. While there
Utilizing green energy offers numerous benefits to
is an upfront cost for installing solar panels, some
individuals, such as improved air quality, mitigation
companies offer solar assistance programs that
of climate change effects, and cost savings on their
allow payment over time.
electricity bills.
● Stability: With numerous renewable energy
options, it is a reliable and sustainable resource
The terms “green energy” and “renewable energy”
that can be harnessed from various locations
are often used interchangeably. However, there
worldwide. By diversifying their energy sources,
is an important and occasionally confusing
countries can maintain a stable energy supply
distinction between the two. Most green energy
and reduce reliance on fossil fuels.
sources are also renewable energy sources, but

Green Energy Corridors In a mere hour and a half, the sunlight that reaches
the Earth’s surface can potentially generate enough
The goal of the Green Energy Corridor Project is power to meet the world’s energy needs for an entire
to integrate electricity generated from renewable year. Solar technologies utilize either photovoltaic
sources, such as solar and wind, with electricity (PV) panels or mirrors that concentrate the sun’s
from conventional power plants within the grid. rays to convert sunlight into electricity. This
electricity can be directly used or stored in batteries
In 2015-16, the Ministry approved the Intra State or thermal storage systems.
Transmission System (InSTS) project, enabling the
transmission of significant amounts of renewable There are two primary types of solar energy
energy to other regions. Eight states abundant technologies: photovoltaics (PV) and concentrating
in renewable energy sources were selected solar-thermal power (CSP).
for the project, namely Tamil Nadu, Rajasthan,
Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Photovoltaics: When the sun shines on a solar
Himachal Pradesh, and Madhya Pradesh. The panel, the PV cells within the panel absorb
State Transmission Utilities (STUs) in the sun’s energy. This energy prompts
these states are responsible for electrical charges to move within
implementing the project. the cells’ electrical field, resulting
in the flow of electricity.
The revised target of the
project includes the installation Concentrating Solar-Thermal
of approximately 9700 km Power: These systems employ
of transmission lines and mirrors to reflect and focus
substations with a total capacity sunlight onto receivers, which
of around 22600 MVA. The capture solar energy and convert
completion deadline for this target is it into heat. This heat can then be
set for December 2020. The project aims utilized to generate electricity or stored
to facilitate the transfer of over 20,000 MW of large- for later use. Concentrating solar-thermal power is
scale renewable power from the implementing predominantly utilized in large-scale power plants.
states and enhance the grid infrastructure in those
states Geothermal Energy
Solar Power Energy Geothermal energy is derived from the heat within
the Earth. Since heat generation is a continuous
Solar radiation refers to the light emitted by the sun, process beneath the Earth’s surface, geothermal
also known as electromagnetic radiation. While energy can be repeatedly utilized. It finds
every location on Earth receives some sunlight applications in activities such as bathing, heating
throughout the year, the amount of solar radiation buildings, and generating electricity.
reaching each specific spot on the Earth’s surface
varies.

The majority of the Earth’s heat energy does not Geothermal energy with low temperatures
manifest as magma, water, or steam. Instead, it is derived from pockets of heat that reach
remains within the mantle and gradually moves temperatures of approximately 150°C (302°F).
outward, accumulating in areas with high heat These low-temperature geothermal energy sources
concentration. This dry geothermal heat can be are typically located just a few meters below the
accessed through drilling and can be converted Earth’s surface.
into steam by introducing water.
Low-temperature geothermal energy can be
employed for heating purposes in greenhouses,
residential buildings, fisheries, and industrial
processes. While primarily used for heating, it can
also be utilized to generate electricity.
Co-Produced Geothermal Energy: Co-produced

geothermal energy technology relies on other
energy sources to function. This type of geothermal
Numerous countries have successfully harnessed energy is obtained from oil and gas wells, where
geothermal energy. Different regions of the world water is heated as a by-product.
offer varying types of geothermal energy resources
that can be utilized. Geothermal Heat Pumps: Geothermal heat
pumps (GHPs) utilize the Earth’s heat and can be
Iceland stands as an excellent example, where a implemented in nearly any location worldwide.
significant portion of the population benefits from GHPs are typically drilled between 10 and 300 feet
geothermal energy due to the abundant presence (3 to 90 meters) deep, significantly shallower than
of easily accessible underground hot water. most oil and natural gas wells. GHPs do not require
Geothermal energy in Iceland is known for being rock fracturing to access their energy source.
safe, reliable, and cost-effective. In contrast, other
countries like the U.S. may require more costly A continuous loop, known as a “slinky loop,”
drilling processes to tap into geothermal energy consisting of pipes connected to the GHP, is set up
reserves. both underground and above ground, often within a
building. Alternatively, the loop can be completely
Harvesting Geothermal Energy: Heating and buried to provide heating for parking lots or garden
Cooling areas.
Low-Temperature Geothermal Energy: Geothermal In this system, water or other liquids, such as
heat can be readily utilized as a heat source in glycerol, which acts as an antifreeze, circulate
various locations worldwide. This type of heat through the pipes. During winter, the liquid absorbs
energy is known as low-temperature geothermal heat from the Earth’s core, transporting it upward
energy. through the building via a network of ducts. These

heated pipes can also be routed through hot water Binary Cycle Power Plants: Binary cycle power
tanks to save on water heating costs. plants employ a unique process to conserve water
and produce heat. The underground water reaches
During summer, the GHP system operates in temperatures of about 107°C to 182°C (225°F to
reverse. The heat in the building or parking lot 360°F). This hot water is contained in a pipe that
warms the liquid in the pipes, which then transfers runs above the ground. A liquid organic compound
the heat underground for cooling. with a lower boiling point than water is heated by
the hot water. The organic liquid creates steam,
Harvesting Geothermal Energy: Electricity which passes through a turbine, generating power
for electricity production. Only steam is emitted
Geothermal power plants utilize the heat located during this process, while the water in the pipe is
several kilometers below the Earth’s surface to returned to the ground, where it will be reheated
generate sufficient energy for electricity production. by the Earth, providing more heat to the organic
In certain locations, underground steam or hot compound.
water naturally serve as heat sources. However, in
most places, water needs to be injected Enhanced Geothermal Systems: A
to generate steam. significant amount of energy and heat
exists beneath the Earth’s surface.
Dry-Steam Power Plants: However, it cannot be utilized
Dry-steam power plants unless there are “hydrothermal”
utilize naturally occurring areas underground, meaning
underground steam. The places that are not only hot
steam is directly piped to a but also wet and porous. Many
power plant, where it powers locations lack all three conditions.
turbines to generate electricity. Dry- Enhanced geothermal systems
steam power plants are the oldest (EGS) implement drilling, fracturing,
method of using geothermal energy for and injection techniques to introduce
electricity generation. fluid and permeability into hot but dry underground
rock formations.
Flash-Steam Power Plants: Flash-steam power
plants employ naturally hot water and steam from Wind Energy
underground. A low-pressure environment is filled
with water exceeding 182°C (360°F) in temperature. Electricity is generated from wind by converting the
Some of the water rapidly evaporates or “flashes” kinetic energy of moving air into electricity. Modern
into steam, which is then utilized to drive a turbine wind turbines operate by utilizing the wind to turn
and generate electricity. Any remaining water can the rotor blades, thereby converting the wind’s
be heated in a separate tank to extract additional kinetic energy into rotational energy. This rotational
energy. energy is then transmitted to the generator through
a shaft, which in turn produces electricity.

The amount of power that can be harnessed from sized) wind energy sources, multiple wind turbines
the wind depends on the size of the turbine and the are often installed in close proximity to form a wind
length of its blades. The output is determined by the plant, also known as a wind farm.
cube of the wind speed and the square of the rotor
size. Theoretically, when the wind speed doubles, Stand-alone wind turbines are typically
the energy potential increases by a factor of eight. employed for purposes such as water pumping
or communications. Wind turbines can help
Since 2000, wind power has experienced rapid homeowners, farmers, and ranchers in windy
growth due to research and development, supportive regions reduce their electricity expenses.
policies, and declining costs. According to data
from IRENA, the installed capacity of onshore and Distributed Wind Energy: Small wind systems
offshore wind farms has multiplied by a factor of can also serve as a form of distributed energy.
98 over the past 20 years, increasing from 7.5 GW Distributed energy resources comprise a collection
in 1997 to approximately 733 GW in 2018. of small, modular power-generating technologies
that improve the functionality of the electricity
Onshore wind capacity has risen from delivery system.
178 GW in 2010 to 699 GW in 2020,
while offshore wind capacity has Offshore Wind Energy: Offshore
increased from 3.1 GW in 2010 to wind power is a relatively new
34.4 GW in 2020, representing industry. In this case, offshore
a higher percentage growth. wind farms are established in
Between 2009 and 2019, wind coastal areas.
power production grew by a
factor of 5.2, reaching 1412 Benefits
TWh.
● Wind power is clean and can
Wind energy is one of the fastest-growing be used over and over again.
energy sources globally, owing to its numerous ● Wind turbines use mechanical power to spin a
benefits. Researchers are actively addressing generator and generate electricity. This is how
technical and socio-economic challenges to they harness energy from the wind.
facilitate the development of a carbon-free
● Wind is a resource that never runs out and can
electricity future. This will enable wind energy to
be utilized to produce electricity without burning
provide greater assistance to a larger population.
fuel or polluting the air.
Types ● Wind power is a cost-effective option.
● Utility-scale wind turbines on land are among the

Land-Based Wind Energy: Wind turbines most affordable methods of obtaining energy
canfunction independently, connected to a utility today.
power grid, or in combination with a photovoltaic
● Moreover, the cost competitiveness of wind
(solar cell) system. For large-scale (megawatt-

energy continues to improve as advancements India has long relied on biomass as an important
are made in its science and technology energy source due to its various benefits, such as:
● Wind turbines operate effectively in various

● Renewable nature
settings.
● Wide availability
● Wind energy generation is well-suited for working
landscapes that are utilized for farming and other ● Carbon neutrality
purposes. ● Potential for significant rural employment
● Wind energy is easily implemented in farms,
ranches, coastal and island communities, as well Biomass can also be used to produce solid energy.
as other rural or remote areas where favorable Approximately 32% of the country’s total primary
wind resources are often present. energy use still comes from biomass, and over 70%
of the population depends on it.
Biomass Energy
The ministry of new and renewable energy
Biomass is organic, which means it comes from recognizes the potential and role of biomass energy
living things such as plants and animals. Plants, in India. Consequently, it has implemented several
wood, and waste are commonly used as feedstocks programs to promote efficient technologies for
to generate energy from biomass. utilizing biomass energy across different sectors
of the economy to maximize its benefits.
Biomass energy can also be derived from non-
renewable sources. It originates from the sun, as The primary objective of the Biomass Power &
plants utilize photosynthesis to convert carbon Cogeneration Program is to encourage technologies
dioxide and water into nutrients (carbohydrates) by that effectively utilize the country’s biomass
harnessing solar energy. resources for generating grid power. Biomass
materials such as bagasse, rice husk, straw, cotton
There are direct and indirect methods to convert the stalk, coconut shells, soya husk, de-oiled cakes,
energy from these organisms into usable energy, coffee waste, jute waste, groundnut shells, sawdust,
including: etc., are used to generate electricity.
Direct And
The program focuses on bagasse-based
Indirect Methods cogeneration in sugar mills and biomass power
To Convert
The Energy generation to optimize biomass utilization.
Bioenergy Technologies
Burning to
Produce Heat
Processing
into
Biofuels: Biofuels are liquid fuels used for
(direct) Biofuel
Conversion
(indirect)
transportation, such as ethanol and biodiesel,
into Electricity
(direct)
which are produced by converting biomass into
liquid fuels.
Figure 2.1: Direct Indirect Method

Biopower: Biopower technologies employ three methods to convert renewable biomass fuels into heat and
electricity: burning, bacterial breakdown, or conversion to gas or liquid fuel.
Bioproducts: Biomass has applications beyond electricity and fuels. It can also be transformed into chemicals
used in the production of plastics and other petroleum-derived products.
Benefits of Biomass
Biomass offers a range of benefits, including:
● Reduction of Greenhouse Gas Emissions: Biomass energy usage has the potential to significantly reduce
greenhouse gas emissions.
● Reduction of Dependence on Foreign Oil: Biofuels, derived from biomass, are the only renewable liquid
transportation fuels available, thus decreasing reliance on foreign oil.
Summary
● The world is rapidly transforming into a global village because people worldwide require increasing amounts
of energy daily, while the Earth cannot alter its shape.
● People require additional energy and related services to support their social and economic development,
well-being, and health.
● Renewable energy sources are synonymous with sustainability. They are clean and inexhaustible.
● As a local energy source, it also maintains a balance between the energy being consumed and the creation
of new energy sources. This enables local communities to achieve energy independence.

Unit 3
Other Renewable
Energy Sources
By the end of this unit, you will be Up until the mid-1800s, nearly all of the energy required
able to understand: for heating, cooking, and lighting in the country was
● Hydropower and tidal energy derived from wood. Fossil fuels such as coal, oil, and
● Nuclear power energy natural gas have been the primary energy sources since
the late 1800s.
● Biofuel energy
● Green hydrogen energy However, utilizing fossil fuels for energy production
results in significantly more pollution compared to using
renewable energy sources. The most effective approach
to addressing the climate crisis is transitioning from
fossil fuels, which are the main contributors to emissions,
to renewable energy.
Renewable energy sources are considerably more

accessible than fossil fuels, prompting governments
worldwide to strive for their exclusive utilization in
powering their nations. There are numerous reasons why
relying on energy derived from natural sources is crucial
for our future.
Hydropower Energy
Hydropower is a form of renewable energy that utilizes

the movement of water to generate electricity. It is one
of the oldest and most widely used sources of renewable
19 energy. Other Renewable Energy Resources
There are various sizes of hydropower plants. additional electricity.
Some can be quite large, while others can be
small and employ the flow of water in municipal Working
water systems or irrigation ditches. There are even
“damless” plants that divert or run a portion of a To understand hydropower, it is important to grasp
stream through a powerhouse before the water the water cycle, which consists of three steps:
returns to the main river.
● The sun heats the water on the surface of rivers,
Regardless of the method employed, acquiring lakes, and oceans, causing it to evaporate.
hydropower is much easier and more common
than most people realize. ● Condensation occurs, forming clouds, and
precipitation in the form of rain or snow falls
Types of Hydroelectric Energy Plants from the clouds.
● The rain and snow flow into streams and rivers,

There are three primary types of hydroelectric ultimately reaching oceans and lakes. The
energy plants: water then evaporates, and the cycle
begins anew.
● Impoundment Facility: This
facility utilizes a dam to ● Hydropower harnesses the
regulate the water flow in difference in height between
a pool or reservoir. When where water enters a dam
more power is needed, or diversion structure and
the dam releases the where it exits, much lower
water, and gravity propels down, to generate electricity.
it through a turbine, which
powers a generator. Cost
● Diversion Facility: Unlike other
plants, this type does not require a In comparison to other electricity
dam. Instead, it employs a system of canals to sources, hydropower also boasts relatively low
channel water from the river to the turbines that costs for maintenance, operations, and fuel over
power the generators. the project’s entire lifespan. Although it incurs
significant upfront costs like any major energy
● Pumped-Storage Facility: This plant stores
source, its longevity allows for spreading out these
energy from the sun, wind, and nuclear power
expenses over time.
for later use. It accomplishes this by pumping
water from a lower elevation pool uphill to a
Furthermore, the equipment used in hydropower
higher elevation reservoir. When there is a high
facilities generally lasts longer before requiring
demand for electricity, water from the higher
replacement or repair, resulting in long-term cost
pool is released, flowing back down to the lower
savings.
reservoir and turning a turbine to generate
20 Other Renewable Energy Resources

Benefits Types of Tidal Energy Systems
The benefits of hydropower are: Tidal Barrages: A barrage is a structure resembling

a dam that is used in a specific type of tidal energy
● It’s a clean and cheap way to obtain energy. system. The barrage is constructed across an inlet
● Hydropower plants can immediately supply of an ocean bay or lagoon, creating a tidal basin.
power to the grid, making them a flexible and

The water level and flow rate within the barrage are
reliable backup source of power during major
controlled by sluice gates, allowing the tidal basin
outages or disruptions.
to fill with water during high tide and drain through
● Hydropower offers additional advantages beyond
an electricity turbine system during low tide.
electricity generation, such as flood prevention,
support for crop growth, and water provision.
A two-way tidal power system utilizes both
incoming and outgoing tides to generate electricity.
Tidal Turbines: Tidal turbines, similar to wind

turbines, consist of blades that rotate a rotor to
power a generator. They can be installed in locations
with strong tides on the sea floor.
Due to water being approximately 800 times denser

than air, tidal turbines must be much stronger and
heavier compared to wind turbines.
Tidal Energy
While tidal turbines are more expensive to build
As the need for clean electricity, renewable
than wind turbines, they can gather more energy
fuels, and key materials for energy and industrial
with the same size blades.
processes grows around the world, it is important
to find and secure more sustainable energy sources
Tidal Fences: Similar to tidal turbines, a tidal fence
than those currently available.
is a type of tidal power system that employs vertical
axis turbines mounted in a fence or row on the
Tidal energy represents a significant opportunity
seabed. When water flows through these turbines,
to increase the utilization of renewable energy for
electricity is generated.
powering the world.
Importance and Applications

In the future, tidal energy could potentially supply a
significant portion of the world’s electricity needs,
Tidal energy is a type of power that arises from
provided that issues such as device durability,
the rise and fall of tides, which are caused by the
environmental concerns, and the cost-effectiveness
gravitational pull of the sun, moon, and Earth.
of its commercial use can be addressed.
When water passes through a narrow area, where it

moves faster, it creates tidal currents with enough ● Areas where waterways and tidal channels
energy to be harnessed. narrow, resulting in stronger tidal currents
Tidal energy can be used to generate electricity Historically, tidal energy has primarily been used to
by strategically placing generators in suitable generate electricity for terrestrial use through the
locations designed for that purpose. national power grid. However, there is potential
value in employing tidal energy to meet the
The ocean can also be utilized to generate other requirements of other ocean industries that either
forms of energy, such as: already exist or are in the early stages, such as:
Waves 1 Aquaculture
1
Persistent Ocean Currents 2 2 Ocean Mineral Mining
Differences in temperature
3 Oceanographic Research
3
and salinity within seawater
4 Military Missions
Figure 3.1: Forms of Enery
Tidal energy is more potent than wind energy due

Figure 3.2: Other Ocean Industries
to the density of water, as water is denser than
To fully utilize tidal energy as a large and
air. At the same turbine diameter and rotor speed,
dependable source of clean energy, researchers
tidal energy produces exponentially more power
need to find ways to facilitate the development
than wind energy. Additionally, tidal power is more
of technologies and methods that simplify its
consistent and predictable compared to wind or
widespread commercial adoption. The industry
solar power, which fluctuate and are less easily
is still in its nascent stages and must overcome
planned for. This makes tidal energy an intriguing
numerous obstacles to ensure sustainable growth
renewable energy source worth exploring.
and success.
Some areas that are ideal for capturing tidal energy

Benefits of Tidal Energy
are:
● Tidal energy is a clean, renewable, and sustainable

● Locations with significant differences in tidal
resource that is not being fully utilized. This
range, which refers to the variance between high
represents a significant opportunity for the world
tide and low tide
to meet its current and future energy needs.

● Water is denser than air, which is why tidal energy Other test sites and technology deployments are
is stronger than wind energy. in various stages of development in countries
such as Scotland, France, Japan, Korea, China,
● Tidal energy is more efficient than wind or solar
Canada, and the United States. This is because
energy due to its higher density. It also does
developers are introducing new and improved
not produce greenhouse gases or other waste,
tidal current technologies that show promise in
making it an excellent renewable energy source
overcoming key barriers to commercial viability. To
to pursue.
propel the industry forward, it is crucial to test the
● Another advantage of continuous tides is their
performance and environmental impact of these
predictability and reliability, particularly when
new technologies under real sea conditions.
compared to other renewable energy sources
such as wind and solar, which are influenced by Nuclear Power Energy
the randomness and uncertainty of atmospheric
conditions. Nuclear energy is a type of energy derived from the
protons and neutrons in the nucleus, which is the
Recent Advances in Tidal Energy center of an atom. This energy can be
generated in two different ways:
Around the world, people are
constructing or have recently ● Fission: When atomic nuclei
constructed tidal power split into multiple parts
arrays of varying sizes, with a
● Fusion: When atomic nuclei
significant focus on harnessing
merge together
energy from tidal streams or
currents.
Presently, nuclear fission is used
worldwide to generate electricity,
The newest and first-of-its-kind tidal
while the technology to produce
stream array is located in the Pentland
electricity from nuclear fusion is still in the
Firth in Scotland, which is the body of water
research and development phase.
situated between the Scottish mainland and the
northern islands.
Nuclear fission involves the splitting of an atom’s
nucleus into two or more smaller nuclei, releasing
The MeyGen tidal energy project began operating
energy in the process. Each time this reaction
in stages in 2018. By the end of 2020, the first
occurs, heat and radiation are emitted, both of
four turbines had generated and delivered over 35
which are forms of energy. In a nuclear power plant,
gigawatt-hours of power to the grid. At full capacity,
the heat can be converted into electricity, similar to
the high-speed currents in the area will generate up
how heat from fossil fuels like coal, gas, and oil is
to 400 MW of power through 61 turbines buried in
utilized for electricity generation
the seabed.

Nuclear Power Plant Working Biofuel Energy
Inside nuclear power plants, nuclear reactors and Biofuel is fuel derived from living matter called
their equipment contain and control the chain biomass, usually plant matter. Based on the source
reactions that produce heat through fission. These of biomass, there are three different types of
reactions are usually powered by uranium-235. The biofuels. Biofuels are a renewable source of energy
heat warms the cooling agent in the reactor, which because they are made from plants that are still
is usually water, to produce steam. The steam growing.
is then used to turn turbines, which activate an
electric generator to generate electricity with low The most common method of using biofuel is by
carbon emissions. blending it with refined petroleum products such
as gasoline, diesel fuel, heating oil, and kerosene-
Nuclear Power and Climate Change based jet fuel. However, some biofuels, known as
“drop-in biofuels,” do not require mixing with their
Approximately 10 percent of the world’s petroleum counterparts.
electricity and about 20 percent of the
energy in the United States comes Both biofuels and fossil fuels (coal,
from nuclear power. There are oil, and natural gas) originate
440 nuclear reactors used to from deceased organic matter.
generate electricity in 30 However, biofuels are made
countries around the world. from organic matter that
died relatively recently, while
No other source of electricity fossil fuels are derived from
can surpass nuclear power in organic matter that perished
terms of efficiency and reliability. millions of years ago.
Nuclear power plants can generate
large amounts of electricity around When considering climate change,
the clock for many months without biofuels and fossil fuels have similar
interruption. emissions. However, the carbon dioxide released
from biofuels originates from recently absorbed
Nuclear power is a low-carbon energy source air, and it does not contribute to the overall carbon
because, unlike coal, oil, or gas power plants, nuclear content in the carbon cycle, which includes the
power plants almost never release CO2 when in atmosphere, ocean, and biosphere. This is in
operation. Nearly one-third of the world’s carbon- contrast to the finite carbon supply found in fossil
free electricity comes from nuclear reactors, which fuels.
play a crucial role in achieving climate change
goals.

Categories of Biofuels manner that does not emit pollution into the air.
This is also referred to as “sustainable hydrogen.”
There are four main types, which are: It is considered a fuel that is increasingly hailed
as the most effective means to reduce carbon
● Ethanol is a fuel made of alcohol that is mixed emissions globally and fulfill the commitments
with gasoline to power cars. made to combat climate change by 2050.
● Biodiesel is a biofuel that is usually blended with
diesel made from petroleum. How is Green Hydrogen Achieved?
● Renewable diesel is a fuel chemically similar to

Green hydrogen is generated through a process
petroleum diesel fuel, used as either a drop-in
called electrolysis, which is powered by renewable
fuel or blended with petroleum diesel.
energy sources such as the sun or the wind. Utilizing
● Other biofuels include renewable heating oil, electrodes and an electric current, electrolysis
renewable jet fuel (also known as sustainable separates the water molecule into oxygen and
aviation fuel, alternative jet fuel, and biojet), hydrogen.
renewable naphtha, renewable gasoline, and
other new biofuels that are in various stages of
development and commercialization.
Green Hydrogen Energy
Green hydrogen is hydrogen that is produced by

using renewable energy to split water into hydrogen
and oxygen. This approach differs significantly
from both the grey and blue pathways.
Green Hydrogen Working
At the COP26 UN Climate Conference, green
hydrogen was highlighted as a means to reduce When energy is required, hydrogen stored in specific
carbon emissions in heavy industry, long-distance tanks is transferred to a fuel cell. In the fuel cell,
freight, shipping, and aviation. Both governments it combines with oxygen from the air, generating
and businesses concur that hydrogen plays a electricity. As a result, the only byproduct of
pivotal role in achieving a net-zero economy. this process is water. This creates a clean and
sustainable system that does not emit any CO2
Hydrogen has long been utilized as a raw material during energy production.
in the chemical industry or metallurgy and as a fuel.
Since it cannot be extracted from nature in its pure Green hydrogen has the potential to be a crucial
form, it needs to be manufactured. component of the world’s transition towards

sustainable energy and economies with net-
When we refer to “green hydrogen,” we are zero emissions. When discussing hydrogen
describing hydrogen that has been produced in a technologies, the terms “grey,” “blue,” and “green”

may be used in conjunction. The distinction lies in the method of production.
Hydrogen only produces water when burned, but its production requires a significant amount of carbon.
Depending on the production method, hydrogen can be classified as grey, blue, green, or even pink, yellow, or
turquoise. However, green hydrogen is the only type that can be produced without impacting the climate. This
highlights its importance in achieving net-zero emissions by 2050.
An increasing number of people acknowledge that green hydrogen can be utilized in nearly every industry
that currently relies on fossil fuels and faces challenges in terms of environmental cleanup.Therefore,
spreading awareness about green hydrogen is crucial if we aim to meet the climate goals outlined in the
Paris Agreement and address the climate emergency’s zero-emissions objectives.
Europe is already engaged in projects along the entire hydrogen value chain, including the development
of cost-effective electrolyzers, the establishment of a transportation network, and the implementation of
hydrogen-based road transportation solutions.
Over time, the installation cost of hydrogen systems is projected to decrease by 40% to 80%, according to a
report by the International Renewable Energy Agency (IRENA). Coupled with the declining prices of renewable
energy, this indicates that green hydrogen could become profitable by 2030.
Summary
● Energy is important in our everyday lives because it facilitates growth and development, benefiting the
economy and enhancing people’s productivity.
● The return-to-renewables plan is an excellent approach to combat climate change, but it must have long-
term viability to assist future generations in meeting their energy requirements.
● Despite these opportunities, there are still challenges that hinder renewable energy from becoming a
lasting solution to climate change.
● Market failures, lack of information, limited access to raw materials for future utilization of renewable
resources, and our daily carbon footprint are among the issues that contribute to this challenge.

Unit 4
Carbon Emissions

We derive numerous benefits from landforms, including
able to understand:
mountains, hills, plateaus, and plains. We obtain oxygen,
● Climate change and
food, and water from these landforms. Additionally, a
sustainability
significant portion of the world’s wildlife inhabits land-
● Hazardous waste based ecosystems.
● Energy efficiency and

Land serves as a crucial carbon sink and plays a pivotal
technologies employed
role in the climate system. Its surfaces, such as forests,
● Carbon credits help maintain the planet’s temperature stability and store
carbon. Over the past decade, land-based ecosystems
have absorbed approximately 30% of the carbon dioxide
emitted by human activities, including the burning of
fossil fuels.
However, landforms are currently facing challenges due

to deforestation, urbanization, industrial development,
agricultural expansion, and unsustainable farming
practices. These factors pose obstacles to land’s ability
to continue producing food, maintaining fresh water and
forest resources, and regulating climate and air quality.
Conversely, a changing climate exacerbates land

degradation by increasing the frequency and intensity
of droughts, desertification, and other extreme weather
events as the planet warms. The rise in greenhouse
27 Carbon Emission
gas emissions caused by human activities is responsible for climate change. Humans burn
responsible for this phenomenon, leading to health, fossil fuels like coal, oil, and gas. Greenhouse gas
environmental, and humanitarian crises. emissions are made when fossil fuels are burned.
These gases act like a blanket wrapped around the
Nevertheless, the fight against climate change Earth, trapping the heat from the sun and causing
presents a genuine opportunity to transition temperatures to rise.
towards a low-carbon society, which will foster job
creation, innovative ideas, and social justice on Climate change is caused by things like the release
both local and global scales. of greenhouse gases, including:
Since the onset of the industrial revolution, carbon

dioxide emissions have significantly increased,
primarily due to increased combustion of fossil
fuels. A small group of countries is responsible Carbon Methane
for the majority of greenhouse gas emissions Dioxide
worldwide. In terms of total emissions, China, the
United States, and the countries comprising the
European Union are the three largest emitters.
Figure 4.1: Green House Gases
These gases are produced by activities such as

The release of CO2 into the atmosphere is a
driving a car using gasoline or heating a building
primary driver of global climate change. Reducing
with coal. Carbon dioxide can also be generated
emissions is crucial for mitigating global warming
when land and forests are cleared. Most of the
and addressing climate change. However,
methane that enters the air comes from garbage
discussions surrounding the responsibility and
dumps. The main sources of pollution are energy,
initiatives for emission reduction remain ongoing.
industry, transportation, buildings, agriculture, and
land use.
Impact of Climate Change
Extreme weather is already worsening worldwide,

endangering lives and livelihoods. Moreover,
emissions continue to rise. As a result, the Earth is
now approximately 1.1°C warmer than it was in the
1800s. The period from 2011 to 2020 marked the
Climate Change warmest decade ever recorded.
Changes in temperatures and weather patterns ● Climate changes have resulted in severe
that last for a long time are called “climate change.” droughts, water scarcity, large-scale fires, rising
These changes could be natural, like when the sea levels, floods, polar ice melting, severe
sun’s cycle changes. The human population is storms, and species loss.
28 Carbon Emission
● Additionally, extreme heat can increase the to heavy rain.
likelihood of wildfires, as observed in Europe
● The Middle East will likely face extreme
this summer. France and Germany experienced
heatwaves and widespread drought.
approximately seven times more land burned
● Island countries in the Pacific could be submerged
than the average between January and the
by rising sea levels.
middle of July 2022.
● Numerous African countries are at risk of
● When temperatures rise, the frozen ground in
droughts and food shortages.
regions like Siberia will thaw, leading to the
release of greenhouse gases that have been ● The western US is likely to experience drought,
trapped for hundreds of years. This further while other regions of the country may witness
exacerbates climate change. stronger storms.
● In other areas such as China, Pakistan, and ● Australia is expected to have prolonged periods
Nigeria, extreme rainfall is causing unprecedented of hot weather, resulting in an increase in wildfire-
flooding. related deaths.
Climate change profoundly affects Climate Change Solutions

various aspects of our lives,
including health, agriculture, There are many ways in which
infrastructure, and livelihoods. we can deal with climate
Individuals in developing change and improve our
countries and small islands lives. This will not only
are particularly vulnerable. The protect the environment but
rise in sea levels and saltwater also contribute to economic
intrusion has reached such development. Several global
severity that entire communities agreements and frameworks, such
have had to relocate, while long-lasting as the Sustainable Development Goals,
droughts put people at risk of starvation. In the the UN Framework Convention on Climate
future, more individuals are likely to be displaced Change, and the Paris Agreement, help guide our
from their homes due to climate change. progress.
How will Climate Change Affect the World? There are three main types of actions:
The effects of climate change will vary across ● Cutting emissions.

different parts of the world. According to the ● Adapting to climate impacts.
IPCC, which is part of the UN, if the rise in global
● Financing necessary adjustments.
temperature cannot be limited to 1.5C, the following
consequences may occur:
By transitioning from fossil fuels to renewable
energy sources like solar and wind, we can slow
● The UK and Europe may experience flooding due
down climate change. However, we need to start
29 Carbon Emission
immediately. While most countries plan to achieve significant changes, but scientists suggest that we
net-zero emissions by 2050, efforts must be made can reduce our impact on the climate by making
to reduce emissions by at least 50% by 2030 if we some small changes in our own lives:
are to limit warming to below 1.5°C. Between 2020
and 2030, the use of fossil fuels needs to decrease ● Reduce air travel.
by approximately 6% annually. ● Avoid owning a car or opt for an electric vehicle.
● Consider consuming less meat and dairy

Preparing for the effects of climate change
products.
will not only protect people but also safeguard
the ecosystem. It addresses both current and ● Conserve electricity.
anticipated impacts. Adaptation will be necessary ● When replacing household appliances, such
worldwide, but priority should be given to the most as a washing machine, choose energy-efficient
vulnerable individuals who have limited resources models.
to cope with climate hazards.
● Enhance home insulation.
What are Governments Doing? ● Transition from a gas heating

system to an electric heat pump.
Countries agree that the only way
to address climate change is Sustainability
by working together. In a
historic agreement in Paris Sustainability is a concept
in 2015, they pledged to that encourages us to
make efforts to limit global consider the bigger picture
warming to 1.5C. of our interactions with the
Earth and the long-term impact of
In November, Egypt will host COP27, our actions on future generations.
a meeting of world leaders where Climate action is just one component
countries will collaborate on more of sustainability.
ambitious plans to reduce emissions, including a
reduction in the use of fossil fuels. In the context of climate change, a sustainable
energy system typically involves making changes
Many countries have committed to achieving “net to our energy, transportation, and other systems
zero” emissions by 2050. This entails significant to prevent further warming of the planet. However,
reductions in greenhouse gas emissions and sustainability encompasses more than just
compensating for the remaining emissions by mitigating climate change.
removing an equal amount from the atmosphere.
“It encompasses people and the environment,
What can Individuals Do? including extraction, disposal, and usage. It
examines how individuals engage with the world
Governments and businesses need to make and the inherent complexity of these interactions.”
30 Carbon Emission
From an environmental standpoint, sustainability Sustainability encourages individuals to consider
revolves around responsibly utilizing Earth’s their choices and actions in the same way that
resources and avoiding their depletion. climate action does. However, it’s important to
recognize that living sustainably is not possible in
One common thread among all sustainable isolation.
practices is considering the consequences of our
actions today on the world tomorrow. This concept To create a system capable of meeting the needs
is also reflected in “sustainable development,” a of its people, governments, communities, and
term employed by the United Nations to establish businesses must collaborate towards the goals of
global goals and allocate international aid. zero waste and zero carbon emissions.
The UN defines “sustainable development” Sustainability involves striking a balance that

as “development that meets the needs of the ensures people have adequate resources to lead
present without compromising the ability of future fulfilling, healthy lives without jeopardizing the
generations to meet their own needs.” future of humanity.
The increasing global temperature poses a An ecological perspective is crucial when

significant challenge to sustainability. Human contemplating sustainability. While striving to
activities that contribute to climate change are combat climate change, it is helpful to bear in mind
unsustainable because they alter the planet, which the essence of sustainability.
we rely on for meeting our diverse needs. Moreover,
climate change complicates long-term solutions to A pertinent question to ask before making decisions
other challenges. regarding climate change could be: Will this action
hinder future generations’ ability to live well?
Hazardous Waste
When you consider the fight against climate change

and reducing your carbon footprint, you likely think
of actions such as driving less and turning off
lights. However, it is important to recognize that
the organic and inorganic waste we generate also
“Changes in biodiversity and climate impact our significantly contributes to global greenhouse gas
food sources, sea levels, urban planning, and more.” emissions.
Many sustainability-related issues are both caused The increase in greenhouse gases in the Earth’s
by and influenced by climate change. For instance, atmosphere is already causing changes in our
a warmer Earth makes it more difficult to ensure weather patterns. Some of these increases can
sufficient food production, and deforestation for be directly attributed to the amount of waste we
agriculture contributes to climate change. dispose of.
31 Carbon Emission
Solid waste is a direct source of greenhouse gas Toxic Wastes: These substances can be hazardous
emissions due to the following reasons: regardless of the quantity. They have the potential
to cause death, severe illness, or significant damage
● Methane is produced when waste in landfills to organs.
decomposes in the absence of oxygen.
● Some are carcinogenic, leading to cancer after
● Nitrous oxide is released from facilities that
prolonged exposure.
incinerate trash.
● Some are mutagenic, causing significant
Both methane and nitrous oxide contribute biological changes in the offspring of humans
significantly to global warming. Methane has 21 and animals exposed to them.
times the warming potential of carbon dioxide,
while nitrous oxide has 310 times the warming Reactive Wastes: These materials are chemically
potential. unstable and react vigorously with air or water. They
can cause explosions or release poisonous gases.
Classification
Ignitable Wastes: These substances have low
Hazardous wastes are categorized into different ignition points and can start fires easily.
groups based on their biological, chemical, and
physical properties. These properties determine Corrosive Wastes: This category includes highly
whether materials are: acidic or alkaline materials that, upon contact with
solid objects or living organisms, cause chemical
reactions that lead to destruction.
1 Toxic
Infectious Wastes: These wastes encompass used
Reactive 2 bandages, hypodermic needles, and other materials
generated in hospitals or laboratories.
3 Ignitable
Radioactive Wastes: These materials emit ionizing
Corrosive 4 energy that can be harmful to living organisms. Due
to the long-term persistence of certain radioactive
5 Infectious
materials in the environment, taking thousands of
years to fully decay, their proper disposal raises
Radioactive 6
concerns.
Figure 4.1: Hazardous Wastes
32 Carbon Emission
The Science Ways
● Carbon dioxide and methane gas are produced When implemented in conjunction with efforts to
when organic waste breaks down. Methane is combat climate change, effective management of
generated in the absence of air, while carbon chemicals and waste, including plastic waste, will
dioxide is produced when organic matter breaks mitigate the rise of greenhouse gases.
down in the presence of air.
It will also enhance environmental quality by
● To produce and incinerate inorganic waste,
restoring nature and ecosystems, among other
natural resources such as water, fuel, metal,
benefits. This will positively impact livelihoods and
and wood are utilized. This process releases
foster a dignified existence for all. Additionally, it
greenhouse gases, particularly carbon dioxide,
will contribute to the development of a greener,
and other pollutants into the air.
more inclusive economy based on circularity and
● At every stage of its lifecycle, plastic waste
resource utilization throughout their entire life
contributes to greenhouse gas emissions. Oil,
cycles.
gas, and coal are extracted and utilized in
the production and transportation The Basel Convention on the Control
of plastic. of Transboundary Movements of
● Furthermore, significant Hazardous Wastes and Their
amounts of carbon Disposal (1989), the Rotterdam
emissions are released Convention on the Prior
during the manufacturing Informed Consent Procedure
and disposal of plastics. for Certain Hazardous
Chemicals and Pesticides in
Challenges International Trade (1998), the
Stockholm Convention on Persistent
Climate change and the loss of Organic Pollutants (2001), and the
biodiversity, resulting from increased pollution Minamata Convention on Mercury (2013) all strive
from chemicals and waste, do not appear to be to safeguard human health and the environment
diminishing. from hazardous chemicals and waste.
Climate change and the management of hazardous The United Nations Framework Convention on
chemicals and waste are two among many Climate Change aims to maintain stable levels of
issues that policymakers and decision-makers greenhouse gases (GHGs) in the atmosphere and
must address in order to achieve the Sustainable prepare for future climate change impacts.
Development Goals, as outlined in the 2030 Agenda
for Sustainable Development. Energy Efficiency
Even though it seems like energy is important for

progress, a lot of the energy we use is made in
33 Carbon Emission
ways that hurt the environment. Coal, oil, and gas Models made as part of Energy Efficiency 2018
produce a lot more CO2 per unit of electricity than show that if the world implemented all of the cost-
other energy sources like nuclear, wind, solar, and effective energy efficiency measures based on
hydro. current technology, it would cause GHG emissions
related to energy to peak before 2020 and by 2040.
Energy efficiency is good for the environment in
many ways. It cuts GHG emissions by a lot, both According to this prediction, which is outlined in our
direct emissions from burning or using fossil fuels Efficient World Scenario (EWS), energy efficiency
and indirect emissions from making electricity. could reduce annual energy-related emissions by
3.5 Gt CO2-eq (12%) compared to 2017 levels. This
The recent Intergovernmental Panel on Climate would be more than 40% of the reductions needed
Change (IPCC) special report on Global Warming to meet the goals of the Paris Agreement.
of 1.5oC shows that energy efficiency can help
fight climate change. The importance of energy Together with renewable energy and other steps,
efficiency can be viewed from the fact energy efficiency is therefore a must if
that the emission of harmful gases we want to meet global climate goals.
into the atmosphere has risen, and
there is limited time to attain the Resource Management and
specified goals in this direction. Efficiency
Energy efficiency is one of One way to lessen the

the most important ways for effect of the growing need
the world to meet its energy for materials on energy
service needs while using consumption is to improve
less energy. This is important in material efficiency. This means
most of the IPCC GHG emissions obtaining the same level of service
pathways for keeping global warming from materials while using fewer
to 1.5oC (IPCC, 2018). overall.
In 2017, energy-related greenhouse gas (GHG) Promoting a higher level of efficiency in the
emissions went up by 1.4% to more than 32.5 production and use phases of the value chain,
gigatonnes of CO2 equivalent (Gt CO2-eq). This was while ensuring the same service is provided to the
the first increase since 2014 when the use of fuels consumer, can be achieved in several ways:
was high due to strong global economic growth.
This produced a lot of emissions. But, with the help ● Making products lighter while still delivering the
of energy efficiency measures, the emissions were same level of service (light-weighting).
prevented. If efficiency hadn’t gotten better since ● Reducing yield losses in the production process.
2000, emissions would have been nearly 4 Gt CO2-
● Exploring alternative uses for scrap metal without
eq, or 12%, higher in 2017.
resorting to melting it down again.
34 Carbon Emission
● Reusing and recycling parts.
● Designing product parts with longer lifespans.
● Increasing the frequency or extent of product

usage.
Energy demand decreases when there is less

demand for materials that require significant energy
consumption, and when products are recycled.
Utilizing recycled scrap to produce metals such
as steel, aluminum, and copper consumes 60-90% Since the writing of the Convention, discussions
less energy compared to manufacturing them from and debates regarding technology and collaborative
metal ores. efforts in this regard have taken place at international
climate change talks. Both the UN Framework
Both energy efficiency and material efficiency Convention on Climate Change (UNFCCC) and the
are interconnected as they contribute to a higher Kyoto Protocol explicitly mention these issues in
level of efficiency throughout the production value their texts.
chain. The distinction between material efficiency
and energy efficiency lies in the amount of effort Technology cooperation can significantly contribute
involved in creating something. to global efforts to reduce greenhouse gas (GHG)
emissions and adapt to the impacts of climate
In most cases, material efficiency aligns well with change.
energy efficiency, and the two concepts mutually
reinforce each other. A significant milestone in technology cooperation
occurred during COP 16 in Cancun, where the
For instance, a car with reduced steel content Technology Mechanism was established with the
conserves energy since less steel needs to be following objectives:
produced. Additionally, the lighter weight of the car
results in lower fuel consumption during operation. ● Facilitate the transfer of technology to support
However, there are trade-offs between energy climate change mitigation and adaptation.
efficiency and material efficiency. For example, if
appliances made of steel have longer lifespans, Among other aspects, the Mechanism aims to:
consumers may delay upgrading to more efficient
devices. ● Facilitate the sharing of technology and know-
how at reasonable prices between developers
Technologies and end users.
● Ensure that publicly available technologies are

Climate change and sustainable development are shared among end users at minimal cost.
global problems that can only be addressed with
the assistance of technology.
35 Carbon Emission
The evolution of the technology issue over time control of the central government?
demonstrates that while progress has been made,
there is still a long way to go to achieve effective In order to transition towards a low-carbon
technology cooperation. The establishment of the and climate-resilient future, it is essential that
Technology Mechanism is a positive and welcome climate technologies are accessible across
step towards addressing these challenges. all countries and sectors, and that they are
effectively utilized. Collaborative actions and
However, it is also crucial to consider the partnerships are necessary to ensure the creation
implications of such a system for developing and accessibility of climate-related technologies
countries like India in this case. at global, regional, and national levels. This can
be achieved by enhancing individuals’ capacities
● Firstly, each country must take a proactive stance and providing additional resources to cover the
in global negotiations by addressing the most costs of integrating climate change considerations
critical climate technology needs, especially for into the development process and independently
developing nations. Examining existing models implementing initiatives.
and institutional arrangements for
technology cooperation can Carbon Credits
provide valuable lessons
and ideas for national and We need to cut carbon emissions
global discussions on the and decarbonize economies
Technology Mechanism. as soon as possible, but time
is running out, and we don’t
● Secondly, the Mechanism
always have the necessary
may have implications for
technology to do so. Carbon
South-South cooperation
credits play a crucial role in
and regional collaboration.
addressing this challenge.
Technology cooperation among
developing countries, particularly in
Companies and individuals can compensate for
the South Asian region, is gaining increased
their unavoidable emissions by purchasing carbon
attention. The question arises as to how the
credits from certified activities that promote
Technology Mechanism might influence the
community development, protect ecosystems,
collaborative efforts of developing countries in
or implement efficient technologies to reduce or
utilizing technology to address climate change.
eliminate emissions from the atmosphere.
● Thirdly, there are potential implications at the
national level. How will the objectives of such Carbon markets can contribute to the effectiveness
a mechanism be met through actions and of climate action in three primary ways:
incentives within each country? For instance, what
could be the effects on technology development ● Accelerating the reduction of emissions at the
institutions and collaborative efforts in India earliest opportunity.
if there are decentralized nodesnot under the
● Preserving and managing carbon sinks in nature.
36 Carbon Emission
● Removing carbon dioxide from the air. in the pursuit of immediate emission reductions to
ensure a habitable Earth for future generations.
By implementing these measures, carbon markets
can play a significant role in advancing climate The latest research indicates the pressing need
action and mitigating the impacts of greenhouse to take prompt action to protect vulnerable
gas emissions. ecosystems and communities across the globe.
Goals Carbon credits represent quantifiable and verifiable

reductions in emissions. These credits originate
Reduce Emissions by 50% by 2030: The primary from certified climate action projects that actively
objective is to rapidly decrease fossil fuel emissions reduce, eliminate, or prevent the release of
worldwide across all sectors of the economy. By greenhouse gases (GHGs). There are three main
2030, a target of reducing these emissions by 50% approaches through which these projects achieve
should be achieved. emission reductions:
Protect Natural Carbon Sinks: The ● The first approach focuses on

second climate goal is to safeguard reducing greenhouse gas emissions
natural carbon sinks, promote by transitioning to alternative
biodiversity and wildlife energy sources, thereby
conservation, and support minimizing reliance on fossil
the communities residing fuels.
in and around these
● The second approach
ecosystems.
involves the removal of
emissions from the atmosphere.
Remove CO2 from the
For instance, planting more trees
Atmosphere: The third advantage
allows for the sequestration of
of carbon markets for the climate
carbon from the air, storing it in solid
is their ability to help offset emissions
or liquid form.
that currently lack solutions or are projected to be
difficult to eliminate in the long term. ● The third approach captures and eliminates
emissions, such as through the removal of
Scientists at the IPCC have demonstrated that methane from wastewater, a potent GHG that
the planet is experiencing warming due to surpasses the impact of carbon dioxide.
increased levels of greenhouse gases (GHGs)
in the atmosphere. This global phenomenon Moreover, these projects yield numerous additional
results in significant weather changes worldwide. benefits, including empowering communities,
Recognizing the urgency, the countries of the world, protecting ecosystems, restoring forests, and
under the UN and the Paris Agreement, have united reducing dependency on fossil fuels.
37 Carbon Emission
Summary
● Getting rid of fossil fuels is the primary action to combat climate change. Additionally, utilizing renewable
energies such as solar, wind, biomass, and geothermal sources can contribute significantly to the cause.
● While producing clean energy is crucial, it is equally important and cost-effective to reduce energy and
water consumption by employing efficient devices such as LED light bulbs and advanced shower systems.
● Promoting public transportation, carpooling, electric and hydrogen vehicles, and exploring alternative
modes of transportation can effectively reduce CO2 emissions and combat global warming.
● To decrease CO2 emissions from buildings, which result from heating, cooling, hot water, and lighting
systems, it is essential to construct energy-efficient buildings and retrofit existing structures.
● Priorities should also include promoting responsible use of natural resources, halting extensive
deforestation, and adopting greener and more efficient agricultural practices.
● Responsible consumption of food (especially meat), clothes, cosmetics, and cleaning products is crucial.
Additionally, recycling is indispensable for effective waste management.
● Multiple UN reports, backed by thousands of scientists and government reviewers, have emphasized the
significance of limiting the global temperature rise to 1.5°C to mitigate the severe impacts of climate
change and maintain a habitable climate. However, the current policies indicate that the temperature is
projected to increase by 2.8°C by the end of the century.
● Greenhouse gas emissions contributing to climate change originate from various regions and impact
the entire world. However, some countries are responsible for a disproportionate amount of emissions.
The 100 countries with the least pollution generate only 3% of total emissions, while the top 10 polluting
countries account for 68% of the pollution. Addressing climate change is a collective responsibility, but
greater emphasis should be placed on the actions of high-emitting countries and individuals.
38 Carbon Emission
Unit 5
Law of Energy Consumption
By the end of this unit, you will be Energy consumption is the total amount of energy used
able to understand: for various purposes, including activities, manufacturing,
● Energy conversion act -2001 and residential or commercial use. It is crucial to
● Energy conservation recognize that energy is derived from diverse sources. In
(amendment) bill-2022 fact, assuming that saving electricity is the most effective
way to conserve energy is a common misconception,
as different energy types may have varying impacts on
specific processes.
If you aim to save energy, understanding your energy

usage can provide two valuable insights:
● Determining the potential cost savings over time

by investing in an energy management system and
substantiating its effectiveness.
● Identifying areas within your living or working space

where energy savings can be achieved and determining
the best starting point.
Energy laws encompass regulations pertaining to both

renewable and non-renewable energy sources. These
laws play a critical role in governing energy-related
matters. They encompass case law, statutes, rules,
regulations, and decrees. In the field of energy law,
39 Law of Energy Consumption

specific regulations focus on aspects like oil, gas, The Bureau of Energy Efficiency, along with the
and “extraction taxes.” State Government and the Central Government,
primarily carries out the provisions of the Act. The
Energy law also covers contracts related to primary objective of the BEE is to formulate policies
dredging, oil and gas extraction, licenses for pre- and plans based on self-regulation and market
and post-discovery acquisition of oil and gas, as principles, promoting reduced energy consumption
well as determining ownership rights to oil and gas across the Indian economy. This collective effort
reserves. involves all stakeholders and aims for the swift and
long-term adoption of energy efficiency practices in
India heavily relies on fossil fuel imports to meet its all sectors.
energy demands. It is projected that by 2030, more
than 53% of India’s total energy consumption will Salient Features of the Energy Conservation Act,
be fulfilled through energy imports. 2001 (Amended in 2010)
India’s energy policy seeks to augment As a result of this act, both the Central
domestic energy resources while and State governments have the
combating energy poverty. The authority to:
country aims to prioritize the
development of alternative ● Promote efficient and
energy sources, particularly responsible energy use
nuclear, solar, and wind
● Identify industries,
energy. In 2017, India met
businesses, and commercial
63% of its total energy needs
buildings with high energy
through indigenous resources
consumption as “designated
consumers”
The Energy Conversion Act

●Establish regulations and standards
-2001
for energy usage by specific consumer
India’s government enacted the Energy categories
Conservation Act (EC Act) in 2001 to establish a

In 2010, the law underwent an amendment.
legal framework and institutional arrangements
This amendment introduced stricter energy-
aimed at enhancing energy efficiency. To implement
saving regulations for buildings, appliances, and
the Act’s regulations, the following entities were
equipment. It also established a framework for
established:
trading energy-saving credits between:
● The Bureau of Energy Efficiency (BEE) as the

● Industries that demonstrate reduced energy
central agency
consumption
● State-level State Designated Agencies (SDAs)
● Industries that exceed the government-set
energy usage limits.

Furthermore, an Energy Conservation Appellate of any energy user or group of energy users as
Tribunal was established under this amendment “designated consumers” under section 14(e).
to handle appeals against decisions made by
● Establish regulations for energy-efficient building
the Central/State government or any authority
codes under section 14 clause (p).
operating under the Energy Conservation Act.
● Undertake efforts to raise awareness and
disseminate information on energy-efficient
practices and energy conservation.
● Organize and conduct training sessions for staff

and experts on energy-efficient practices and
energy conservation.
● Enhance the quality of consulting services

related to energy conservation.
● Promote research and development in the field

of energy conservation.
Powers and Functions of Bureau
● Develop a procedure for testing and certifying
equipment and appliances for energy use and
In carrying out the tasks assigned to it by or under
raise awareness about testing facilities.
this Act, the Bureau must effectively coordinate
with designated customers, designated agencies, ● Initiate and support pilot projects and
and other relevant agencies. It is also required to demonstration projects that showcase energy-
recognize and utilize existing infrastructure and efficient practices and energy conservation
resources. methods.
● Encourage the adoption of energy-saving

The Bureau is empowered to fulfill its duties and processes, equipment, devices, and systems.
exercise the powers granted to it by or under this
● Promote innovative approaches to financing
Act. These duties and powers include, for example,
energy-saving projects.
the following:
● Provide financial assistance to organizations for
● Recommend to the Union Government the energy-saving initiatives and improved energy
standards for processes and energy use that utilization.
should be announced under Section 14A. ● Impose fees for services aimed at assisting
● Recommend the issuance of energy savings individuals in using energy more efficiently and
certificates by the Union Government. saving it.
● Provide suggestions to the Central Government ● Maintain a list of certified energy auditors as
regarding the labeling and display of equipment required by regulations.
or appliances as mandated by clause (d) of ● Establish in regulations the qualifications, criteria,
section 14 of the Act. and conditions for certification as an energy
● Propose to the Union Government the designation auditor, as well as the certification process.
● Specify in regulations the guidelines for under clause (b) if they do not meet the prescribed
conducting energy audits and the frequency of energy usage standards.
such audits.
● However, no notice banning the aforementioned
● Define the certification requirements for energy activities shall be issued within six months from
managers and energy auditors employed by the date of the notice.
designated consumers in accordance with
● Additionally, the Union Government, taking into
regulations.
consideration market share and technological
● Develop educational lesson plans on energy- advancements related to the concerned
efficient practices and energy conservation for equipment or appliance, may, for reasons
educational institutions, boards, universities, recorded in writing, extend the initial six-month
or other independent bodies and collaborate period for an additional duration of no more than
with them to integrate these lessons into their six months.
curriculum.
● Mandate the display of relevant information
● Evaluate capacity building and services related on labels attached to appliances or
to energy conservation, as well as the equipment, as determined by
certification of energy managers and regulations.
energy auditors. Conduct overseas
● Designate energy-
cooperation programs related to
intensive industries and
efficient energy utilization and
other establishments as
conservation as directed by the
“designated consumers”
Union Government
based on factors such
as energy consumption,
Power of Central Government to
investment requirements for
Facilitate and Enforce Efficient Use of
transitioning to energy-efficient
Energy and its Conservation
equipment, industry capacity
for investment, and the availability
In consultation with the Bureau, the Union
of energy-efficient machinery and equipment
Government has the authority to issue notifications
required by the industry.
that include the following provisions:
● Modify the list of industries classified as high
● Establish standards for the operation and energy energy consumers as outlined in the Schedule.
usage of equipment and appliances involved ● Establish rules and standards governing the
in the utilization, generation, transmission, or allowable energy usage for specific consumers
supply of energy. as deemed necessary by the Union Government.
● Identify specific appliances, equipment, or ● It is important to note that the Union Government
groups thereof for the purposes of this Act. may establish different rules and standards for
● Prohibit the manufacturing, selling, purchasing, different consumers based on specified factors.
or importing of equipment or appliances listed ● Direct energy-intensive industries listed in the

Schedule to undergo energy audits conducted Bureau is responsible for defining the qualifications
by accredited energy auditors, with regulations required for energy auditors who assess the energy
determining the manner and frequency of such consumption of various industries.
audits.
Energy Trading: The government has the authority
● Instruct designated consumers to obtain energy
to issue energy savings certificates to businesses
audits from certified energy auditors if it is
that consume less energy than their allocated limit.
believed that doing so would enhance energy
These certificates can then be traded to customers
efficiency and conservation.
who exceed their maximum energy threshold,
● Enumerate the elements to be assessed during
thereby establishing an energy trading system.
the energy audit process.
Prohibition until Conforming to Specified Norms:

The Energy Conservation (Amendment) The Act empowers the Union to impose a ban
Bill-2022 on the production, sale, purchase, or import of
specific equipment that fails to meet the
The bill proposes amendments to the
prescribed standards set six months
Energy Conservation Act of 2001,
or a year prior.
which was previously modified in
2010, with the aim of introducing
Penalty: Individuals who
certain changes. One of
exceed their designated
the key modifications
energy consumption limits
involves the introduction
will be subject to a penalty.
of carbon saving certificates
The Electricity Act of 2003
to incentivize the adoption of
already provides for a court
clean energy by individuals.
to handle appeals against such
orders issued by the Central or state
Provisions of the Energy
government.
Conservation Act 2001
Proposed Changes in the Act

Energy Efficiency Norms: The Act empowers
the Union to establish regulations and quality
Share of Renewable Energy: The Act determines
standards for energy efficiency in devices, industrial
the minimum proportion of renewable energy
equipment, and buildings with a connected load
that businesses or industrial units must utilize.
exceeding 100 kilowatts (kW) or a contractual
This energy can be obtained either directly from
demand surpassing 15 kilovolt-amperes (kVA).
renewable sources or indirectly through the grid.
Bureau of Energy Efficiency: The Act established

Incentivizing Clean Energy: By granting carbon-
the Bureau of Energy Efficiency (BEE). The 2010
saving certificates, we can motivate individuals
amendment extended the tenure of the Director
to adopt clean energy practices. Incentives such
General of BEE to five years, up from three. The
as carbon credits for utilizing clean energy could

be employed to compel the private sector to take ● India has also pledged to obtain more than 40%
action against climate change. of its electricity from non-fossil fuel sources by
2030.
Strengthening Related Institutions: Institutions
● India aims to decrease its CO2 emissions to 550
established under the Act, such as the Bureau
metric tonnes (Mt) by 2030. To achieve this, it
of Energy Efficiency, should be reinforced and
has agreed to enhance its tree and forest cover,
empowered.
which will absorb an estimated 2.5–3 billion
tonnes of CO2.
Promoting Green Hydrogen: Encouraging the
widespread adoption of Green Hydrogen as a
India revised its NDCs during the COP26 Summit
substitute for the fossil fuels utilized by businesses.
held in Glasgow in November 2021. India has
established five new environmental goals:
Applicability to Residential Buildings: To foster
sustainable habitats, energy conservation
● To increase its non-fossil energy capacity to 500
standards should also be applicable to larger
GW by 2030.
residential buildings. Currently, the Act only applies
● To fulfill 50% of India’s electricity requirements
to large businesses and their premises.
through renewable energy sources.
Objectives of the Proposed Amendments ● To decrease the carbon intensity of the Indian
economy by 45%.
● To decrease India’s reliance on fossil fuels for
● To reduce India’s carbon emissions by one billion
electricity generation, thereby reducing the
tonnes between 2021 and 2030.
country’s carbon footprint.
● To achieve the objective of net zero carbon
● To promote the expansion of India’s carbon
emissions by the year 2070.
market and encourage broader adoption of clean
technologies.
● To fulfill India’s Nationally Determined

Contributions (NDCs) outlined in the Paris
Climate Agreement before 2030.
India’s climate change commitments
● Under the Paris Climate Agreement, India has

committed to reducing its economy’s carbon
intensity by 33–35% by 2030 compared to the
levels in 2005, as part of its Nationally Determined
Contributions (NDCs).

Summary
● India’s energy policy is based on trade-offs among four main factors:
» The rapidly growing economy requires a consistent supply of electricity, gas, and oil products.
» Limited domestic fossil fuel reserves necessitate significant imports of natural gas, crude oil, and, more
recently, coal.
» The need for cleaner fuels and technologies due to indoor, urban, and regional environmental impacts.
● These challenges have prompted substantial reforms, reorganizations, and a focus on energy conservation
in recent years.
● In general, India’s strategy involves offering financial incentives from both federal and state governments
to promote the development of renewable energy sources.
● India’s abundant solar energy resources and substantial potential for high head pumped hydroelectric
energy storage enable it to meet the energy demands of its peak population solely through renewable
sources.
● In 2021, the government increased India’s target of achieving 500GW of renewable energy by 2030. The
country’s energy production needs to be reevaluated as energy consumption rises, primarily driven by
transportation, mining, and manufacturing sectors.

Unit 6
Distributed Energy Resources
By the end of this unit, you will be Many utility customers are looking for multiple sources
able to understand: of high-quality, reliable electricity because of increased
● Virtual distributed energy demand on the nation’s electrical power systems, power
resources (DERs) shortages, rolling blackouts, price spikes, and power
● Distributed energy resources quality problems.
(DERs)
DERs (Distributed energy resources) are small-scale
● Features of distributed energy
sources or users of electricity that are connected to
resources (DERs)
the electric grid. They are power-making resources that
● Electric vehicles, solar panels, are usually near load centers and can be used alone or
and more as DERS together to make the grid more valuable.
These systems can either be hooked up to the local

electric power grid or used on their own, away from
the grid. A few examples of DER technologies are wind
turbines, cogeneration, fuel cells, photovoltaics (PV),
microturbines, combustion turbines, reciprocating
engines, combustion turbines, and energy storage
systems.
DERs are made up of both real and digital assets. Physical

DERs usually have a capacity of less than 10 MW and
can include generators that operate on fossil fuels, solar
arrays, microturbines, battery energy storage systems,
small wind farms, and more.
46 Distributed Energy Resources
DERs can be owned and operated by the electric where it is consumed rather than at centralized
company, autonomous power producers, or power plants.
corporations in the area. The utility controls how
they work in the same way it controls how big Distributed energy resources (DERs) are small-scale
central power plants work, by asking them to start power plants typically located on the customer’s
and stop as needed. side of the meter. These DERs can be aggregated
to form Virtual Power Plants (VPPs). VPPs can
DER is a faster and cheaper alternative to building then participate in the Demand Response market,
big power plants and high-voltage transmission helping to maintain grid stability and incorporate
lines. They offer customers lower costs, more more renewable energy into the energy mix.
reliable service, high-quality power, more efficient
use of energy, and energy independence. Virtual DERs consist of multiple physical assets
that are combined and made accessible to the
Renewable distributed energy generation utility company. From the utility’s perspective, they
technologies and “green power” like photovoltaic, appear as a single resource, similar to a power
wind, tidal, biomass, geothermal, or hydroelectric station. Virtual DERs can comprise a single type
power can help the environment in a big way. of asset or a combination of different types, such
as diesel generators, solar panels, and batteries,
tailored to function as a cohesive unit.
When the combined capacity of virtual DERs

reaches several megawatts, they are sometimes
referred to as virtual power plants (VPPs). Demand-
response resources are often utilized to create
virtual DERs, with demand-response resources
referring to electric loads that can be modified,
reduced, or shut down when necessary.
Virtual Distributed Energy Resources
(DERs)
The utility’s objective is to ensure that electricity
generation matches electricity consumption at
When energy is generated from renewable sources
all times. In this regard, reducing demand has the
near its intended location, it is referred to as
same effect as increasing production.
distributed generation. Embedded generation and
local generation are alternative terms for the same
What do DERs have to do with Virtual Power Plants?
concept.
The concept of Virtual Power Plants (VPPs) is

Distributed generation, also known as embedded
relatively new. Essentially, they are a group of
generation or local generation, occurs when
Distributed Energy Resources (DERs) that can
electricity is produced from sources, often
be collectively managed while still functioning
renewable energy sources, in close proximity to

independently. In practice, VPPs can be comprised ● Biomass generators fueled by waste gas or
of a single type of asset, such as electric vehicles industrial and agricultural by-products
(EVs), or a combination of various assets, including
● Open and closed cycle gas turbines
batteries, EVs, and CHP (Combined Heat and
● Reciprocating engines (diesel, oil)
Power) facilities.
● Hydro and mini-hydro schemes
The DERs that constitute a Virtual Power Plant
● Fuel cells
(VPP) are all connected to the grid and have the
ability to operate autonomously outside of the VPP. Usage
The operation of VPPs is centrally controlled. An
important aspect of resilience and reliability is the There are various ways to utilize DER systems:
VPPs’ capacity to leverage DERs to enhance grid
flexibility. ● They can assist in managing energy costs
and ensuring a continuous power supply by
Distributed Energy Resources (DERs) complementing existing energy services.
● DER systems enable buildings to

DERs are small, modular
operate independently from the
technologies that can generate,
electric power grid, either by
store, and distribute energy
choice or out of necessity.
where it is needed.
● Certain DER systems have
DER systems typically have a the ability to reduce emissions
power capacity of less than and optimize on-site fuel usage.
10 megawatts (MW) and can ● Utilities can utilize DER
be customized and installed technology to defer, decrease, or
on-site to meet specific energy potentially eliminate the need to invest
requirements. in additional equipment and infrastructure
for electricity generation, transmission, and
Here are some examples of distributed energy
distribution.
resources that can be implemented:
● DER systems can contribute to voltage regulation
and enhance the reliability of a location.
● Rooftop solar photovoltaic units
● Wind generating units

Selecting a DER technology
● Battery storage systems
DER (Distributed Energy Resources) systems can
● Electric vehicle batteries used for exporting
consist of one or multiple primary technologies,
power back to the grid
such as wind turbines, combustion turbines, fuel
● Combined heat and power units (also known as
cells, internal combustion engines, photovoltaics,
tri-generation units) that utilize waste heat for
and batteries. These systems may also incorporate
cooling

additional technologies like power conditioning an electric generator. Due to the limited amount of
equipment, communications, controls, CHP diesel fuel, compression ignition can be used, and
(Combined Heat and Power) systems, fuel handling the significant presence of natural gas in the mix
and storage systems, and emission controls. results in lower emissions (though slightly reduced
power output) compared to a pure diesel engine.
Here are some examples of available DER
technologies: Dual-fuel engines share similarities with diesel
engines in terms of operation and cost. They range
Diesel Engine Generator Sets: Diesel generator from a few kilowatts to approximately 10 MW in
sets utilize a diesel-powered reciprocating engine size and have an installation cost of around $875/
as the primary power source, coupled with an kW.
electric generator for power output. These engines
operate at low RPM and high compression ratios. Natural Gas Engine Gensets: Natural gas engine
gensets employ a natural gas-fueled engine with
They are widely used and cost-effective, a spark-ignition system, combined
ranging in size from 1 kW to 10 MW. with an electric generator. They
Diesel engine gensets can be operate similarly to diesel and dual-
switched on and off frequently fuel engines but exhibit lower
to serve as peak-load or load- emissions.
following power plants.
These systems are
However, they have available in sizes ranging
drawbacks such as high from a few kilowatts to about
emissions, particularly nitrogen 5 MW, and their installation
oxides, and the need for sound cost is approximately $825/kW,
attenuation to reduce engine noise. comparable to diesel and dual-fuel
They can also operate in baseload engines.
mode in off-grid systems.
Combustion Turbines: Combustion turbines, also
Diesel engines may not be suitable for most Federal known as gas turbines, utilize gas or liquid fuel.
buildings and should only be considered when other The combustion process generates hot gases
technologies are not feasible. The installation cost that expand against the blades of a rotating shaft,
is approximately $810/kW, making them one of the creating high-speed rotary motion that drives an
least expensive forms of DER. electric generator. While combustion turbines
may have a longer startup time compared to
Dual-Fuel Engine Gensets: These systems reciprocating engines, they are well-suited for peak,
feature a diesel-cycle engine modified to run on a load-following, and baseload operations in larger
combination of natural gas and diesel fuel, typically sizes. The installation costs for combustion turbines
with a small percentage of diesel (between 5% are slightly higher than those for reciprocating
and 10% by volume). The engine is connected to engines, but the maintenance costs are lower.

Turbines are efficient and have relatively low emerging.
emissions. They can be equipped with pollution
control equipment, further enhancing their Fuel cells are known for their efficiency, quiet
cleanliness. Available in sizes ranging from operation, and modularity. They come in sizes
approximately 300 kW to several hundred ranging from a few watts to 200 kW, which is the
megawatts, they have installed costs ranging from largest commercially available size for stationary
$910/kW to $1,400/kW. power applications. Currently, fuel cells are one of
the more expensive DER technologies, with installed
Microturbines: Microturbines are smaller versions costs starting at approximately $5,500/kW.
of combustion turbines with lower efficiency. They
typically have a power range of 30 to 250 kW and Photovoltaic Cells: These are thin layers of
operate at high speeds using natural gas (typically semiconductor material, typically crystalline
around 90,000 rpm). In most cases, the generator’s silicon, that convert sunlight into direct current (DC)
60 Hz AC power is converted through an inverter, electricity. The DC power is then converted into
also known as a power conditioning unit or PCU, standard alternating current (AC) power, which can
which is an electronic power converter. be connected to utility systems using an inverter.
Microturbines designed for small industrial and

commercial applications prioritize small size,
affordability, reliability, modularity, and ease of
installation. The latest models have very low
emissions. Microturbines are currently available for
purchase at approximately $1,000/kW.
Fuel Cells: Fuel cells employ a thermochemical

process in which hydrogen (H2) passes over an
anode and air flows over a cathode in an electrolyte Photovoltaic panels range in power from a few
bath. This process produces DC electricity, which is watts to about 100 W and are composed of smaller
then converted into AC power for grid use. Fuel cells pieces that can be assembled to create larger
are among the cleanest energy sources, as they arrays to meet different power needs. They do not
only generate heat, water, and carbon dioxide as produce noise or pollution and have no moving
waste. Hydrogen is typically produced by reforming parts, making maintenance simple.
fuels like natural gas or propane, which may cause
environmental pollution unless proper measures Photovoltaic systems have been in use for a long
are taken. time and are manufactured by various companies.
The installation cost can range from $8,000/kW to
Commercially available fuel cells initially used $13,000/kW, depending on the intended use, with
phosphoric acid as the electrolyte, but other grid-connected systems typically costing less than
technologies like solid oxide, molten carbonate, those with battery storage.
and proton exchange membrane (PEM) are now

Wind Turbines: These are another form of issues. Flywheels, on the other hand, convert
renewable energy technology that utilize blades electric or mechanical energy into rotational energy,
resembling propellers to convert the energy of the which can be converted back into electricity when
wind into electricity using a generator. needed.
Most wind turbines are asynchronous, meaning Superconducting magnetic energy storage (SMES)
they rotate at varying speeds. The output of the uses a magnetic coil cooled to extremely low
generator must be converted to 60Hz AC power temperatures to store electricity with minimal loss.
through an inverter. Wind turbines can generate Like other DC devices, it requires an inverter to
anywhere from a few watts to over 1 MW of convert DC into AC that can be sent to a utility grid.
electricity.
All of these storage technologies are commercially
They can be used for remote power systems, small- available and are becoming more affordable as
scale or residential electricity production, and large- their usage increases. Energy storage systems
scale power generation. The installation cost can cost between $1,100/kW and $1,300/kW to
can range from $1,000/kW to $3,000/ purchase and install.
kW, depending on the intended use.
Hybrid Systems: These systems
Storage Devices: These devices are combinations of different
store energy from an electric technologies designed to
grid or other sources, such meet specific or unique
as a renewable DER, to be needs. Renewable energy
used when needed. There are technologies, such as wind and
various storage technologies solar systems, are dependent
available, each suitable for on unpredictable energy sources,
different purposes. making it necessary to combine
them in a hybrid system, like a PV system
The most commonly used method of storing with backup batteries, to store energy for use when
electric energy is batteries. They can be utilized needed.
for low-power applications, such as remote
communications, or high-power applications, such Hybrid DER systems that do not rely on renewable
as supporting the utility grid, which requires an energy sources are also utilized. For instance, a
inverter. battery system paired with a microturbine can
handle short power outages with the batteries and
Another popular storage system is an uninterruptible long outages with the microturbine.
power supply (UPS), which typically consists of
batteries connected to control electronics that Depending on the needs, it may be beneficial to
convert stored energy into AC electricity and direct use multiple technologies and systems to create a
it to where it is needed, such as providing full power customized solution that maximizes efficiency and
during an outage or smoothing out power quality performance.

Fuel Options electricity. However, garbage dumps and sewage
treatment plants can also produce fuel that can
The fuel you use to power your DER system should power DER technologies.
be easy to obtain, cost-effective, and simple to
store. PV Systems: They are dependent on the amount
of sunlight in a specific location. To optimize the
Diesel Fuel: It is readily available and relatively performance of your solar installation, attention
affordable, but it requires an on-site storage tank should be paid to the panel manufacturing process,
and regular deliveries, and it can potentially leak or proper placement, and the addition of energy
emit fumes. storage batteries, usually of the deep discharge
type.
Biodiesel Fuel: In places where it is available, it can
be used as an alternative to diesel engine generator Wind Energy: It also relies heavily on the wind speed,
sets. Biodiesel is produced by mixing natural oils particularly the average speed and its variations
and fats with alcohol. Typically, it is throughout the day and season in a given
sold as a 20% mix with diesel fuel. location. Again, adding storage can
Biodiesel can significantly reduce enhance the overall performance of
CO2, SO2, and particulate matter a wind system.
emissions, but in some cases,
it may lead to increased NOx Hybrid systems, such as a
emissions. combination of wind or PV
with storage and a small
Natural Gas: Natural gas is diesel backup generator, can
a cleaner and cost-effective be a cost-efficient solution in
alternative to diesel. If gas utilities scenarios where a high degree of
have existing pipelines in the area, reliability or autonomous operation
an extension may be required at an is required.
additional cost, but there is no need
for a storage tank. However, if installing a gas line Benefits of Distributed Energy Resources
is not feasible or too expensive, gas delivery and
a storage tank may be necessary. In cases where Distributed energy resources (DER) can provide
natural gas is not accessible, propane can be used consumers with several benefits, including:
as an alternative to diesel. The pollution level of
natural gas and propane compared to biodiesel ● Customers who install DER units can save money
may vary depending on the application. on their electricity costs or experience improved
reliability.
Biomass: Some fossil fuels can be replaced with ● DER can help reduce the expense of expanding
plant matter, such as trees, grasses, crops, or other the power grid, resulting in overall lower power
organic materials. Often, waste from the food, fiber, costs for consumers.
and forest products industries is used to generate

● Increased utilization of distributed energy measures may be required to mitigate any potential
resources can contribute to a decrease in visual impacts caused by DER installations.
pollution levels within the National Electricity
Market (NEM) by replacing other sources that Also, the visual and aesthetic effects can be a
produce higher levels of pollution. problem, so landscaping, enclosures, or other steps
may be needed.
While DER offers numerous advantages, it
also encompasses many new or developing Features of Distributed Energy
technologies. The impact of these new technologies Resources (DERs)
must be considered by power systems and
networks. It is crucial to acknowledge and address No matter what the primary asset is—whether
these initial challenges to fully harness the benefits it’s generators, solar panels, batteries, demand-
that DER has to offer. response resources, or something else—most
DERs require the following elements:
Environmental Issues
A Communications and Controls
When choosing a DER technology, it’s Infrastructure: This infrastructure
important to consider its impact enables the grid operator to
on the environment. Some DER remotely control the start and
systems can help reduce air stop times of each resource.
pollution, particularly NOx Since DERs are typically not
and SOx, which are produced monitored on-site 24/7, the
during the combustion of fossil control system needs to be
fuels and contribute to smog fully automated. Control signals
formation. can be transmitted through wired
internet, wireless cellular networks,
CO2 and NOx emissions are the only or even power lines.
ones regulated for DER technologies. Since most
DER technologies use natural gas as fuel, SOx Synchronization and Connection Equipment: This
emissions are typically very low. equipment ensures that the electricity generated
by DERs is synchronized with the grid. For example,
Due to the proximity of DER systems to residential solar inverters convert DC current from solar panels
and commercial areas, noise levels should also be into AC current and generate a smooth, sinusoidal
taken into account when selecting a technology. AC wave that matches the grid’s frequency. Transfer
Many cities and suburbs have regulations switches also ensure that generation resources are
concerning noise, so the use of mufflers or other completely disconnected from the grid when not
noise-reducing measures may be necessary. needed.
Additionally, visual and aesthetic concerns should Metering Equipment: Metering equipment is
be addressed. Landscaping, enclosures, or other essential to accurately measure and compensate

DER owners for the supply and demand of their the right regulations and appropriate features,
resources. Smaller DER assets in homes and assembling a collection of 100 megawatts of
businesses, such as solar panels, typically use the distributed energy resources (DERs) can be a more
main utility meter for metering. efficient, cost-effective, and rapid alternative to
constructing a traditional power plant of the same
However, larger and more complex DERs often size.
require smart meters capable of two-way metering
and time-of-day metering. The field of virtual power plants and virtual DERs is
rapidly evolving. Vehicle-to-Grid (V2G) technology
Smart meters can detect power quality issues and will be a significant step forward for the sector once
enable features like solar net-metering programs, it figures out how to connect electric cars together
where homeowners receive credits for excess to create virtual power plants.
electricity sent back to the grid.
Most EVs spend the majority of their time plugged
Aggregation Software: This software is vital for in, parked, or connected to the power grid. Therefore,
effective management and operation of virtual the idea is to utilize EV batteries to create DERs.
DERs. Controlling thousands of individual resources Since the number of lithium-ion batteries in electric
can be challenging for utilities and grid operators. cars is significantly higher than the number of
batteries used in stationary power applications,
Aggregation software provides an intuitive harnessing EVs could have a tremendous impact.
interface that simplifies working with the unique
constraints and characteristics of each aggregated
asset. For instance, the software can ensure that
participants in a demand-response program do not
experience extended or frequent periods without
air conditioning. It can also select specific homes
or businesses to achieve specific load-reduction
goals.
Electric Vehicles, Solar Panels, and

more as DERS
DERs are abundant and can often be found in Before DERs can be fully utilized, there are still
unexpected places. Electric cars, residential solar many problems to solve. However, they present
panels, commercial backup generators, and more one of the best opportunities to meet the power
can all be “harvested” by an aggregator. With industry’s future needs.

Summary
● Distributed energy resources (DERs) can take many different forms and encompass a wide range of
technologies. However, they are all characterized by their proximity to where they are utilized on the grid.
● In the past, DERs were primarily considered as assets that generate electricity, such as solar, wind, and
combined heat and power (CHP) technologies. With advancements in technology and grid flexibility, DERs
now include assets that aid in balancing and controlling grid demand. These assets include thermostats,
electric vehicles, batteries, and hot water heaters.
● DERs enhance grid reliability and reduce the likelihood of breakdowns. By producing electricity in close
proximity to its consumption, DERs minimize energy wastage that occurs during long transmission lines.
● Solar panels, batteries, electric vehicles, and other renewable energy sources constitute the majority of
DERs. These flexible renewable energy sources can be easily and cost-effectively integrated into the grid.
● DERs offer reliability and resilience due to their close proximity to usage points. Instead of extensive
transmission wires and cables spanning miles, DERs only require a few hundred feet.

Unit 7
Affordable and Clean Energy
By the end of this unit, you will be In 2021, four crucial indicators of climate change -
able to understand: atmospheric levels of greenhouse gases, sea level
● Universal access to modern rise, ocean warming, and ocean acidification - broke
energy new records. This highlights the undeniable fact that
● Increasing global percentage of human activities are driving significant changes to the
renewable energy land, oceans, and air, resulting in severe and long-term
consequences.
● Bringing improvement in energy
efficiency
The best way to deal with this predicament is to stop
● Promoting access to research, using fossil fuels to generate energy, which is the main
technology and investments in cause of climate change.
clean energy
Essential technologies like battery storage systems make
it possible to store and utilize renewable energy from
sources like solar and wind when people, communities,
and businesses need power. The International Renewable
Energy Agency (IREA) states that, due to their unique
ability to quickly intake, store, and release electricity,
battery storage systems help to make the energy system
more flexible.
Battery storage technologies, when combined with

renewable generators, can provide reliable and cost-
effective electricity to areas that are not connected to the
main grid and to communities that do not have access
56 to it. Affordable and Clean Energy
To ensure that renewable energy technology is renewable energy sources in our energy mix.
accessible to everyone and not just the wealthy, However, progress in these areas falls short of what
it is important to remove barriers to the sharing is needed to achieve the goal by 2030. It requires
of knowledge and technology transfer, such as greater financial resources, more ambitious policies,
intellectual property rights. and a willingness from countries to embrace new
technologies on a larger scale.
While global cooperation and coordination are
important, it is also necessary to immediately reform
domestic policy frameworks to make it easier and
faster to implement renewable energy projects and
to encourage private sector investment.
The technology, capacity, and funding needed to

transition to renewable energy already exist, but
policies and procedures are required to reduce
market risk, facilitate investment, and incentivize
it. This can be achieved by simplifying the In the past decade, more people around the world
planning, permitting, and regulatory processes and have gained access to electricity than ever before.
eliminating unnecessary bureaucracy. This could However, the number of people in Sub-Saharan
include providing designated areas specifically for Africa without electricity has increased. Unless
large-scale renewable energy development, known countries with the most significant energy deficits
as Renewable Energy Zones. take significant action, it will not be possible to
ensure universal access to affordable, reliable,
Universal Access to Modern Energy sustainable, and modern energy by 2030.
Every day, renewable energy sources become According to the International Energy Agency’s
cheaper, more reliable, and better at their (IEA) Tracking SDG 7: The Energy Progress Report,
functions. We cannot continue relying on fossil substantial progress has been made in various
fuels indefinitely, as they are detrimental to the aspects of Sustainable Development Goal (SDG)
environment. Therefore, we need to change our 7 since 2010. However, progress has been uneven
approach to energy production and consumption. across regions. Over the past decade, more than
The first crucial step towards addressing climate a billion people worldwide have gained access to
change is to swiftly adopt new energy solutions. electricity. Nevertheless, the financial repercussions
of COVID-19 have made basic electricity services
Ensuring universal access to affordable, reliable, unaffordable for an additional 30 million people,
and sustainable energy services is essential in primarily residing in Africa. Nigeria, the Democratic
the battle against climate change. This involves Republic of the Congo, and Ethiopia had the highest
expanding electricity access, promoting the use of number of people without access to electricity.
clean cooking fuels and technologies, improving
energy efficiency, and increasing the share of
57 Affordable and Clean Energy

To expedite progress across all regions and
indicators, a stronger political commitment,
long-term energy planning, and sufficient policy
incentives and scalability are required to encourage
the faster adoption of sustainable energy solutions.
Key Highlights on SDG7 Targets
Figure 7.1: Number of people without access to electricity in rural

and urban areas in the New Policies Scenario (million) Access to Electricity: Despite recent progress, over
In 2010, the world had 1.2 billion people without 759 million people still lack access to electricity,
access to electricity. By 2019, that number had with many residing in unstable or war-torn regions.
decreased to 759 million. Electricity became The SDG’s goal of achieving universal access by
more prevalent, particularly through decentralized 2030 may not be met, and the electrification efforts
solutions based on renewable energy. However, could face further hindrances due to the COVID-19
based on current and planned policies and the pandemic.
impact of the COVID-19 crisis, an estimated 660
million people, mostly in Sub-Saharan Africa, are Clean Cooking: In 2019, approximately 66% of the
still projected to lack access by 2030. global population, equivalent to nearly 3 billion
people, did not have access to clean cooking fuels
Simultaneously, approximately 2.6 billion people, and technologies.
accounting for one-third of the global population,
still lacked access to clean cooking facilities in Renewables: The COVID-19 crisis has resulted
2019. in a 7% annual increase in renewable electricity
generation. However, the renewable energy sector
The report examines various approaches to bridge requires more ambitious targets and government
the gaps between SDG7 and the current situation. support to sustain its growth.
One of the most crucial aspects is the substantial
expansion of renewable energy, which has exhibited Energy Efficiency: In 2018, the world’s primary
greater stability compared to other segments of the energy intensity increased by 1.1%. This measure
energy sector during the COVID-19 crisis. indicates the amount of energy used by the world’s
economic activities. It marked the slowest average
Improvements in energy intensity, serving as a annual growth rate since 2010. To achieve the SDG
proxy for energy efficiency, are diverging further 7 goal, an average annual improvement rate of 3%
from the SDG7 target for 2030. In 2018, the world’s will now be necessary until 2030.
primary energy intensity improved at a rate of
1.1% compared to 2017, representing the slowest International Financial Flows: In 2018, the
average annual rate of improvement since 2010. To international public sector provided $14 billion to
achieve the goal, an average annual improvement support clean energy in developing countries. This
of 3% will be necessary until 2030. figure represented a 35% decline from the previous
year’s record high of $21.9 billion.

During the ongoing COVID-19 pandemic, investor ● Global CO2 emissions have increased by over
risk perception has significantly shifted, and public 46% since 1990.
funding priorities in developing nations have been
● Hydropower is currently the most significant
altered. In this context, international public financial
renewable source of electricity, supplying 16%
support is crucial to mobilize the necessary
of the world’s electricity at competitive prices.
investment levels and achieve the SDG 7 goal.
It serves as the primary electricity source in
numerous countries, regardless of their level of
UN Environment Programme’s Contributions to
development.
SDG 7
● Bioenergy, the largest renewable energy source
People and economies cannot thrive without today, accounts for 10% of the world’s primary
access to energy resources and means to harness energy.
them. Solar, wind, hydropower, geothermal, biofuels,

Targets Linked to the Environment:
natural gas, coal, petroleum, and uranium are all
examples of energy sources that can be utilized
● Goal 7.1: Ensure universal access
repeatedly.
to affordable, reliable, and modern
energy services for everyone by
To mitigate the consequences
2030.
of climate change, it is vital
to diminish our dependence ● Goal 7.2: Increase the share
on fossil fuels and enhance of renewable energy in the
the adoption of renewable global energy mix by 2030.
energy sources. This can be
● Goal 7.3: Double the global
accomplished through energy
rate of improvement in energy
conservation measures and the
efficiency by 2030.
implementation of sustainable
● Target 7.a: By 2030, enhance
energy practices. Furthermore, the
international cooperation to facilitate access to
preservation and effective management of
clean energy research and technology, including
natural ecosystems offer opportunities for the
renewable energy sources, energy efficiency
advancement of clean energy sources, such as
measures, and advanced and cleaner fossil
hydropower and bioenergy.
fuel technology. Promote investment in energy
infrastructure and clean energy technology.
Facts:
● Target 7.b: By 2030, improve infrastructure and
● Approximately 3 billion people rely on wood, upgrade technology to ensure universal access
coal, charcoal, or animal waste for cooking and to modern and sustainable energy services for
heating their homes. all people in developing countries, particularly
● Energy is the primary contributor to climate the least developed ones.
change, accounting for around 60% of all

greenhouse gas emissions.

Increase Global Percentage of rapid deployment and continuous cost reduction is
Renewable Energy imperative.
Over the past decade, the growth of renewable Governments should establish goals and mandates
energy has consistently exceeded almost everyone’s for the utilization of energy derived from natural
expectations, demonstrating a significant and sources. Currently, these sources are predominantly
remarkable progress. As countries strive to achieve employed in the power sector, but their application
ambitious targets for reducing carbon emissions, should be extended to heating and cooling, industry,
renewable energy, led by wind and solar power, is and transportation. Additionally, governments will
poised to become the world’s primary source of need to enhance the flexibility of the electricity grid
energy. to accommodate renewable energy sources, such
as investing in long-distance transmission lines and
With the increasing demand for renewable energy implementing innovative energy storage solutions.
and the electrification of vehicles, established
energy providers are expanding their Benefits of Renewable Energy
capacity while new players are
entering the market. These new Environmental and economic
participants include major oil advantages of using renewable
and gas companies adapting energy include:
their business models to
capitalize on this growing ● Obtaining energy
trend, as well as private from renewable sources,
equity firms and institutional which do not release
investors who are integrating greenhouse gases and reduce
renewable energy as a key certain types of air pollution.
component of their investment ● Diversifying the energy mix

strategies. and reducing reliance on imported
fuels from other countries.
When we examine the past growth of renewable
● Stimulating economic growth and creating job
energy, it instills hope for its potential to accelerate
opportunities in manufacturing, installation, and
in the future and aid in achieving our climate
related industries.
objectives. However, it is evident that the growth
of renewables needs to accelerate, although the
The utilization of energy resources can have
extent of acceleration remains unclear.
significant environmental impacts, including
emissions from fuel combustion that contribute
To ensure that renewable energy adoption follows
to local, regional, and global pollution, as well as
an S-curve and progresses rapidly enough to meet
the potential for climate change and disruption
the goals of the Paris Agreement, greater policy
to various ecosystems. The specific outcomes
support is necessary. Even for countries that are not
depend on factors such as:
currently leaders in this field, offering incentives for

● The primary energy source being used. materials and components is crucial for the growth
and advancement of renewable energy. This
● The conversion technology employed.
encompasses access to the necessary minerals for
● The size, location, and other relevant factors of
manufacturing wind turbines, electric vehicles, and
the energy system.
power infrastructure.
Five Critical Actions the World needs to Prioritize

To enhance and broaden the world’s manufacturing
capacity, international cooperation and investment
Energy is a major reason why people have health
in skills training, research and innovation, and
problems, mostly because burning fuels pollutes
sustainable supply chain development are crucial.
the air.
Level the Playing Field for Renewable Energy

There are five crucial things the world needs to
Technologies: To achieve a fair and equitable
do right away to change our energy systems and
environment for renewable energy technologies, it
transition faster to renewable energy.
is necessary to implement changes to domestic
policy frameworks that simplify the completion of
Make Renewable Energy Technology a Global
renewable energy projects and foster private sector
Public Good: Remove obstacles to the sharing
investments.
and transfer of knowledge on renewable energy
technology, making it accessible to all, not just
the privileged, by eliminating intellectual property
barriers.
Essential technologies like battery storage systems

enable the storage and utilization of energy from
renewable sources such as the sun and wind when
power is needed by individuals, communities,
and businesses. According to the International
Renewable Energy Agency, their ability to quickly While there is available technology, capacity,
absorb, store, and release electricity enhances the and funding to transition to renewable energy,
flexibility of energy systems. the establishment of appropriate policies and
processes is vital to mitigate market risks, enable
Moreover, when combined with renewable investments, and encourage their implementation.
generators, battery storage technologies can This can be achieved through streamlining the
deliver reliable and more affordable electricity to planning, permitting, and regulatory processes and
off-grid communities and isolated grids in remote eliminating bottlenecks and bureaucratic obstacles.
areas.
Shift Energy Subsidies from Fossil Fuels to
Improve Global Access to Components and Raw Renewable Energy: Subsidies for fossil fuels pose
as one of the significant financial obstacles to the
Materials: Ensuring a consistent supply of raw global transition towards renewable energy. These

subsidies are not only wasteful but also unfair. nuclear, and renewable resources.
According to the IMF, in developing countries,
approximately half of the public funds allocated Improving a business’s energy usage is one of
to supporting the use of fossil fuels are directed the most cost-effective measures it can take.
towards the wealthiest 20% of the population. Energy-efficient technologies require less energy
to perform the same or even better work. Utilizing
By redirecting subsidies from fossil fuels to such technologies can significantly reduce
renewable energy, not only can emissions be greenhouse gas emissions. Energy efficiency also
reduced, but it can also contribute to the growth of offers additional benefits, including improving
the economy, job creation, improvement of public the economy, creating jobs, reducing pollution,
health, and promotion of fairness, particularly for promoting better health, and alleviating poverty.
the world’s poorest and most vulnerable individuals.
In order to achieve these goals, certain actions
Triple Investments in Renewables: In order must be taken:
to achieve net-zero emissions by 2050, it is
necessary to allocate a minimum of $4 ● Accounting for Sustainability
trillion per year towards renewable at Every Step: It is increasingly
energy until 2030. This includes crucial to be able to provide an
investments in technology and explanation of how products are
infrastructure. manufactured and the origins
of the materials used.
Such investments are expected
● Advancing the
to yield significant returns and
Manufacturing of Smaller
will not incur costs nearly as high
Components: As electronic
as annual fossil fuel subsidies. By
parts become smaller and lighter
2030, the world has the potential to
to accommodate new generations of
save up to $4.2 trillion annually simply by
compact, advanced mobile, and wearable
reducing pollution and mitigating climate change.
devices, there is a need for new materials that
perform optimally in smaller configurations.
Double the Improvement in Energy
Efficiency Promote Access to Research,
Technology and Investments in Clean
Energy is the golden thread that connects economic
Energy
growth, fairness among people, and a healthy
environment, making the world a good place to live.
There is no denying the importance of green energy
research for the survival of our planet. Governments
Energy efficiency is measured by the ratio of energy
and private organizations are increasing funding
used to the amount of money generated (GDP).
for research into renewable energy sources as
Typically, gross energy consumption is categorized
concerns over climate change and sustainability
into five main types: solid fuels/biomass, oil, gas,
continue to grow.

The goal is to enhance global collaboration by generating electricity from wind power.
2030, facilitating access to clean energy research,
technology, and innovations. This includes Hydro Research primarily focuses on improving the
advanced fossil fuel technology, renewable energy utilization of hydroelectricity while seeking more
sources, and energy efficiency measures. effective ways to mitigate its negative impacts on
ecosystems and the environment.
The seventh Sustainable Development Goal aims to
achieve the generation of dependable, sustainable, Other Interesting Areas
and reasonably priced renewable energy. To reach
this goal, the green energy sector needs to prioritize Geothermal Energy Potential: Despite the presence
research and innovation. of numerous nations with hot geysers, only a few
have utilized them to generate energy. Researchers
Green Energy Research must discover effective and affordable methods to
harness this power without causing harm to nearby
Green energy research focuses on finding ecosystems.
more effective and environmentally
friendly ways to produce energy, Fossil Fuel-Free Engines:
utilizing existing energy sources Addressing the significant
as well as renewable resources contribution of transportation
such as solar and wind to global greenhouse gas
energy. emissions requires finding
sustainable alternatives
This research is crucial for to traditional fossil fuel
developing renewable energy engines in various vehicles,
options that can meet the growing including automobiles, aircraft,
demand while minimizing negative ships, industrial machinery, and
environmental impacts. others. According to a report by
UNEP, transportation accounts for
Key Areas of Green Energy Research approximately 25% of total emissions worldwide.
There are three main types of green energy research: Exploring research areas such as the development
solar, wind, and hydro. of hydrogen fuel cells, improved automobile
batteries, and new materials for the production and
Solar Energy Research focuses on developing new storage of clean energy are critical. An intriguing
photovoltaic materials and advancing solar thermal topic is the recycling of battery components.
technologies to more effectively harness the power
of the sun. Sustainable Energy Storage: Discovering innovative
methods to store energy is a crucial aspect of green
Wind Energy Research aims to increase the energy research. This is essential because weather
efficiency of turbines and explore new methods of conditions can impact the availability of renewable

energy sources like solar and wind energy. By crash on the shores, and the Earth’s soil contains
developing effective energy storage solutions, we hot geysers. All of these potential energy sources
can utilize energy even when the sun isn’t shining can fuel development and create job opportunities.
or the wind isn’t blowing. To effectively and affordably harness these energy
sources, extensive research is necessary.
Importance of Green Energy Research to Modern
Society
There are several reasons why green energy

research is so important.
Combatting Climate Change: Green energy

research is essential in the fight against climate
change. Conventional energy generation methods
are significantly less environmentally friendly
compared to clean, cost-effective, and sustainable
energy solutions. To meet climate change Challenges and Future of GreenEnergy Research
commitments, there must be a significant increase
in renewable energy production. Green energy research faces a number of obstacles:
Increased Global Energy Demand: Energy demand ● One of the major challenges is the higher cost
rises in tandem with population growth and associated with developing and deploying
technological advancements. The construction renewable energy solutions compared to
of new structures, tools, and machinery amplifies conventional technologies. This is particularly
the need for energy generation. As energy demand true for wind and solar energy, which are still in
continues to escalate, it becomes imperative to their early stages.
explore better and safer energy sources. Active
● Renewable energy sources are often intermittent,
involvement in green energy research will help
meaning they cannot consistently produce
bridge this gap.
electricity. This makes integration into the grid
challenging and raises questions about energy
Worsening Pollution: The continued reliance on
storage during periods of low production.
fossil fuels contributes to increasing environmental
pollution, leading to severe consequences such ● Ensuring accessibility and affordability of these
as global warming, natural disasters, and long- technologies for everyone presents another
term damage to ecosystems. To combat these difficulty.
effects, investing in research and development of ● Additionally, important considerations need to be
sustainable energy alternatives is crucial. made regarding environmental impacts, as well
as social and economic repercussions. There
Abundance of Untapped Energy: The sun shines is still much work to be done to fully exploit the
every day, the wind blows, water flows rapidly, waves potential of green energy technology.

Despite these challenges, the advantages of green energy research are evident. These technologies have the
potential to reduce our dependence on fossil fuels, thereby helping to mitigate climate change.
They can also contribute to improved air quality and create new job opportunities within the renewable energy
industry. Green energy research holds a promising future, and with continued funding and efforts, significant
progress can be made in this important field.
Summary
● Nearly every significant challenge and opportunity that the world faces today revolves around energy.
Access to energy for everyone is crucial for improving incomes, securing jobs, combating climate change,
and increasing food production. Given its interconnections with other Sustainable Development Goals,
achieving this objective is of utmost importance.
● It is essential to prioritize ensuring universal energy access, improving energy efficiency, and increasing the
utilization of renewable energy sources by creating new economic and job opportunities. This approach
aims to build more inclusive, sustainable, and resilient communities that can withstand environmental
challenges like climate change.
● Currently, around 3 billion people lack access to clean cooking methods and are at risk of harmful air
pollution. Furthermore, approximately 50% of the global population, which is nearly 1 billion people, live
without electricity, with the majority residing in Sub-Saharan Africa. Fortunately, the use of renewable
electricity from sources such as water, solar, and wind power has made significant progress in the past
decade, and energy intensity per unit of GDP is also decreasing.
● However, the issue is far from being resolved; there is a need for greater availability of clean fuels and
technologies, and further advancements are required in integrating renewable energy into end-use
applications in buildings, transportation, and industry.
● To transform global energy systems, it is necessary to increase both public and private energy investments,
while also focusing on innovative business models and regulatory frameworks.

Unit 8
The World
Energy Trilemma

Trilemma describes a difficult decision between three
able to understand:
options. This phrase may imply that affordability,
● Issues with current
sustainability, and energy security are fundamentally at
system
odds. Finding a balance between the trilemma’s three
● Current approaches to maintain elements is crucial, but not at the expense of any of them.
peak demand
The need for power, heat, and transportation is rising
● Smart grid compared
along with the world population’s continued rapid growth
to traditional electricity
while becoming more urbanised and wealthy. By 2050, it
grids
is anticipated that the world’s energy demand would likely
● Decentralized energy generation double.
and the smart grid
Between now and 2050, energy infrastructure investment
needs to be close to US$50 trillion to keep up with
global energy demand. The distribution of resources is
extremely important given the size of the investment and
the growing importance of energy.
Many of the Sustainable Development Goals of the UN

centre on energy. To create a strong foundation for
prosperity and competitiveness, nations should strike a
balance among the three key aspects of the global energy
trilemma:
66 The World Energy Trilemma

● Energy affordability and access The best result is to get good marks on all three
axes because none of them is inherently more
● Energy security
significant than the other two. The issue then
● Environmental sustainability
becomes whether or not this is feasible.
The World Energy Council (WEC) specifies the
objectives to be met in the “Energy Trilemma” as: The Energy Trilemma is a useful tool because it
effectively communicates the relative standing
● A reliable energy supply against each of the three. Major energy consumers
● Affordability of energy and organisations can use the Trilemma Index

as a crucial tool and framework for an integrated
● Sustainability in energy production and
perspective and well-informed decision making.
consumption
Providing Energy Security

The Energy Trilemma brings about a platform to
talk about the problems holistically by combining
Energy security is the ability of a country to ensure
three important characteristics of the energy
stable and reliable access to energy sources to
markets. The trilemma approach is more relevant
meet its present and future demands. It involves
than ever with the demand for energy showing no
managing internal and external energy sources,
signs of slowing down and the urgent need for an
maintaining the resilience and reliability of the
international effort to tackle climate change.
energy infrastructure, and being able to quickly
recover from any disruptions to supply with minimal
Energy Trilemma as an Important Tool - Three
impact.
distinct axes, each with its own scoring or weighting,
make up the trilemma. To address the energy
The term “energy dilemma” relates to the challenge
trilemma, each nation adopts a unique method.
of balancing security, affordability, and sustainability
in our daily access to and use of energy. To do this,
A score that is higher on a certain axis will be
we must ensure that we comprehend what energy
considered good.
affordability, security, and sustainability imply for
the current global environment.
Security: When we talk about security, we’re talking

about having access to adequate energy when and
where we need it. This entails being able to access
energy continuously. This might refer to a short-
term energy system that can adapt to unexpected
shifts in supply and demand.
Long-term security is another component of energy

security. There is a finite amount of fossil fuels, such
Figure 8.1: Energy Trilemma as oil, gas, and coal, and ultimately these energy

sources will run out. Long-term energy security can By creating more energy-efficient products, we can
be increased by utilising renewable energy sources likewise increase the affordability of electricity. By
including wind, solar, and hydro power. reducing demand, devices that require less energy
to operate can assist in lowering energy prices.
Energy security is described by the International
Energy Agency (IEA) as “the availability of an By switching completely to LPG, electric, natural
uninterrupted energy supply at a reasonable price.” gas, or biogas stoves by 2030, it can be further
improved.
It may be done by:
Achieving Environmental
● Making good use of the natural resources that Sustainability
are available.
Environmental sustainability in energy systems
● Using all available resource sources to ensure
refers to the transition of a nation’s energy system
the supply of energy
towards reducing and avoiding potential harm
Equitable Access to Energy to the environment and the impacts of climate

change. This includes focusing on air quality,
To heat our houses, power our cars and public decarbonization, as well as improving the efficiency
transportation, and illuminate our daily surroundings, and productivity of transmission and distribution
we require energy. It is critical that everyone can systems.
pay and access the energy we consume.
Energy equity measures a nation’s capacity to

offer unrestricted access to a plentiful supply of
dependable energy for household and commercial
use. The dimension includes:
● Basic access to power, clean cooking fuels, and

technology
● Access to levels of energy consumption that

support prosperity Oil, coal, and natural gas account for the majority
of the energy we use globally. The majority of the
● The cost of electricity, gas, and fuel.
energy used in the globe comes from these fossil
fuels. These energy sources contribute significantly
The cheapest source of electricity in history,
to the climate crisis and have detrimental effects
according to the International Energy Agency’s
on our planet by releasing greenhouse gases into
2020 report, is solar power, with wind power not
the atmosphere.
too far behind. This is partially due to better energy
generation made possible by wind and solar power
plants with higher efficiency.

Focus is placed on finding ways to supply today’s There are still ongoing discussions regarding the
energy needs without harming future generations. sustainability of other low-carbon solutions, such
nuclear power, which may make up a significant
Since they are derived from renewable resources, portion of our energy mix in the future. However,
hydro, solar, and wind power are all regarded as there are concerns about nuclear waste.
more environmentally friendly energy sources.
Summary
● Based on international and domestic data, the World Energy Trilemma Index assesses the energy
performance of 127 nations on the three dimensions and identifies areas for integrated policy innovation
and policy coherence that can be strengthened in order to create well-tuned energy systems.
● The Index aims to provide light on how a nation compares to other nations in terms of energy security,
equity, and environmental sustainability. By doing this, the Index draws attention to a nation’s difficulties in
balancing the Energy Trilemma and its chances to make progress toward achieving its energy goals now
and in the future.
● The Index intends to provide information to decision-makers in the policy, energy, and finance sectors. In
contrast to historical indexed scores, which offer information on each country’s performance trends over
time, index rankings allow comparisons between nations on each of the three aspects.
● The World Energy Trilemma ranking gives nations a good platform to highlight their policy accomplishments,
promising trends, and performance in comparison to their neighbours. National Member Committees can
create unique national and sub-national Trilemma models by cooperating with the Council.

Unit 9
A Smart Electric Grid
By the end of this unit, you will be Electricity was initially delivered from power plants
able to understand: through a wide variety of local grids during the early years
● Issues with current of the electrical age. These power stations were typically
system located near their fuel sources and clients, and power
● Current approaches to maintain was delivered to clients using short distances and low
peak demand voltages.
● Smart grid compared

Although this method initially functioned fairly well,
to traditional electricity
it became unsustainable as demand for electricity
grids
increased. As a result, these smaller grids expanded, and
● Decentralized energy generation a more complex system with voltage steps up and down
and the smart grid to aid transmission was developed.
The transmission and distribution of electricity is referred

to as the electricity grid. It is a complex network of
power lines, substations, and transformers that transport
electricity from the point of generation to end-users,
including households, businesses, and other facilities.
The grid is responsible for maintaining the reliability,
stability, and resilience of the power supply.
It is hailed as one of the greatest engineering feats of the

20th century because it allows customers hundreds of
kilometers from power plants to receive power instantly.
However, the underlying technology is deteriorating
70 A Smart Electric Grid

and may soon be unable to keep up with the fast ● Decentralization (distributed energy)
modernization and growing need for electricity in
● The emergence of involved ‘prosumers’ (those
our society.
who both produce and consume electricity) •
Changing regulations
The implementation of a smart grid system, which
● The rise of micro-generation and isolated micro-
enables two-way communication of electricity
grids
and data, is seen as a step towards the digital
transformation of the power industry. This system,
known as smart metering, has been in development
Issues with Current System
for over a decade and is an essential component in
Any electricity generated must be used immediately
modernizing the electricity network.
because the current electrical infrastructure has
little or no storage capacity. The frequency of the
The integration of advanced technologies, such as
AC voltage may alter if supply and demand are out
big data analytics and IoT, into the infrastructure of
of balance. Electrical apparatus or even a portion
traditional power grids allows for more efficient and
of the grid itself may malfunction if it exceeds a
responsive management of energy distribution and
particular range.
consumption, known as smart grids. This concept,
which has been around for over a decade, is crucial
Demand response (DR) is a set of strategies
for the digital transformation of the power industry
that allows electricity customers to adjust their
and utilizes edge computing to analyze data at the
consumption in response to changes in the price
point of origin.
of electricity over time or in response to signals
from the grid operator indicating the state of supply
and demand on the grid. This can be done through
the use of smart meters, automated controls, or
direct human intervention, and it allows for a more
efficient use of the grid and can help to reduce the
need for expensive peak generation capacity.
Therefore, it is up to the power plants to adjust their

output to precisely match surges in demand and
shortfalls. Utility companies must carefully plan for
Smart grids can be used for various purposes, and this, and they must estimate power use extremely
there are several reasons why traditional electric precisely using past trends and weather reports.
grids are being replaced by smart grids.These
reasons include: It takes more than just forecasting demand to
get the proper amount of electricity from a power
● The deregulation of the energy market plant. Nuclear and fossil fuel power plants are
● Evolutions in metering good at generating a lot of electricity, but starting
one back up after a shutdown can frequently take
● Changes in electricity production

hours. Additionally, they take a while to change Current Approaches to Maintain Peak
their output, and they are frequently built so that Demand
it becomes inefficient if the plant’s output veers
outside of its typical operating margins. Utility providers employ a variety of tactics to keep
up during times of peak demand. Energy providers
Other types of power plants must be able to occasionally transmit extra energy to storage
compensate for demand changes in such a case. facilities so that it can be used later when needed,
Renewable energy sources that depend on weather, despite the grid’s lack of storage capacity.
like wind and solar, are also vulnerable to variations
based on regional conditions, which can further The majority of these are “pumped-hydro” plants,
destabilize the situation. A major barrier to the which run on the potential energy from pumping
widespread use of these renewable energy sources water upward. Other techniques include heat
is their instability. storage, pressurized air, or even batteries.
When the grid is overloaded, alternative clean But none of these approaches is particularly
technologies, like hydropower, are effective or economical. The most
frequently forced to reduce their popular method is to start up so-
output, which is undesirable and called “peaker plants,” which are
increases the carbon footprint. gas-fired facilities that can be
swiftly switched on and off to
Weather is another ongoing only work when demand is at
issue for utilities. A hot day its highest. These are typically
would show an increase in air more expensive to maintain,
cooling, while a snowstorm may older, less effective plants.
see a rise in heating, among other
short-term variations in demand. Utility companies frequently have
However, weather can also harm the the choice of paying huge industrial
electrical system. consumers to temporarily cut their consumption
until demand stabilizes or importing power from
Tree limbs falling on delicate equipment, such as their neighbors if peaker facilities are unable to
electricity wires and transformers, are the primary keep up with demand.
cause of power outages. Although this is typically
a local issue, if power levels are not changed to Utility companies can also impose “rolling
account for it, excess voltages for surrounding blackouts,” in which a portion of the grid completely
systems may develop. This could ultimately lead to loses electricity for a while, to avert a major failure.
their failure, endangering more neighboring units. The electric utilities will make an effort to spread
out these blackouts quite equally for a while.

Smart Grid allow them to interface with supply-side computers
and offer data on the system’s current energy
The term “smart grid” refers to a group of concepts, requirements. A smart device or appliance would
tools, business strategies, operational procedures, be able to temporarily lower its power during supply
and other factors that would enable a more effective shortages until demand and supply stabilize.
and dependable electrical system.
“Smart meterage” technology is another
The implementation of distributed power advancement that would be a part of the smart grid.
generation, particularly with a focus on renewable
and sustainable sources, is a key feature of a smart In the past, traditional metering methods only
grid. Additionally, the incorporation of information recorded basic information about total electricity
technology to monitor both supply and demand usage. To calculate a customer’s bill, utility
is essential to its functioning. The use of low-cost companies had to manually check each meter
energy storage solutions is also an important at the end of each month. Even though some
aspect of a smart grid. utilities have adopted more advanced
telemetric systems, this method is
The integration of local, still considered to be inefficient.
renewable energy sources such
as solar and wind power is a Smart meters might make
crucial aspect of distributed it possible for utility
generation in a smart grid. companies and customers
This not only promotes the to communicate in real-
transition to clean energy time, and they might also let
but also ensures a more customers keep track of their
dependable power supply for electricity usage.
local communities.
Smart meters might also make it
The concept of leveraging two-way possible for businesses to use dynamic
communication as a demand response system pricing models, charging customers more for
between utilities and smart devices/appliances is electricity when demand is at its highest and less
a promising area of focus. during periods of surplus.
In the conventional paradigm, electrical equipment Customers could adjust their usage to take
and appliances are “oblivious” to the electrical advantage of cheaper electricity during periods of
grid’s requirements; they continue to draw the reduced demand with the help of smart meters and
same amount of power whether there is an excess communication between utilities and customers,
or a shortage of electricity. creating economic pressure to balance power
consumption throughout the day. This might
In a smart grid, devices and appliances may be increase dependability and lessen the need to
fitted with cutting-edge technology that would employ peaker plants to meet spikes in demand.

A smart grid, in accordance with the EU, makes Usually, a distinction is made between:
use of cutting-edge goods and services as well as
intelligent monitoring, control, communication, and ● Communication (transmission grid: high and
self-healing technology to: extra-high voltage)
● Distribution (distribution grid: lower voltage),

● Make it easier for generators of all sizes and
which involves a variety of wiring and cabling
technologies to connect to and run
systems
● Enable users to contribute to system operation
optimization An electrical grid is used to ensure that power is
always available when and where it is required,
● Give customers more alternatives and knowledge
uninterrupted. Managing a grid is particularly
about how to use their supply
complex due to the intricacy and the numerous
● Significantly lessen the overall electricity delivery
difficulties that might occur, such as the effects of
system’s environmental effect
extreme weather, damage from animals, human
● Maintain and enhance the current high standards sabotage, and other external and internal causes
of system dependability, quality, and supply (problems with equipment failure and essential
security assets).
● Maintain and enhance the current services
Although smart grid includes renewable energy

sources like wind and solar, developing these
technologies is not regarded as moving the smart
grid forward. Here, the difficulty for grid researchers
is integrating and integrating these technologies
with current infrastructure.
Smart Grid Compared to Traditional

Here, a specific area for professionals to consider
Electricity Grids
is needed:
The traditional electrical grid system is designed to

● The options for regulating energy
meet the demands of consumers, with a hierarchical
structure and limited storage capacity. The voltage ● Governmental sustainability programs
level in the network is gradually decreased, starting
from the transmission level, to the distribution level, The market for electricity, the amount of power
and finally to the service level, in order to cater to consumed, laws, stakeholder expectations, and
the needs of different users. even the process of producing electricity itself are
all evolving. Globally, there are smart grid initiatives,
albeit occasionally with distinct strategies and
objectives.

The basic feature of a smart grid, two-way electricity ● Substations and distribution lines (substation
and data flow, makes it possible to provide data automation and, increasingly, digital substations)
and information to the many participants in the
● Tools and techniques for preventing power
electrical market, which can then be evaluated to:
outages and guaranteeing electricity quality
(availability, reliability, etc.)
● Improve the grid
● The integration of energy from different sources
● Anticipate probable problems
with a stronger emphasis on “green energy”
● React more quickly when difficulties arise
● Smart energy production
● Create new capabilities and services in light of
● Monitoring transmission line sensors
the evolving power situation
● Automation of power systems
The definition of a “smart grid” has evolved ● The addition of micro-generation, which enables
to include a broader range of capabilities and institutions and larger buildings to produce their
applications beyond just two-way data and own electricity and supply it to the network grid
electricity transmission. With the rise
● Improved and expanded power
of prosumers and organizations
storage capacities
producing their own electricity, the
● More effective ways to
use of advanced technologies
enhance security
in smart grid deployments
has opened up many new ● Utilize different
possibilities. transmission techniques to
conserve precious metals
This also includes:
● The creation of more
contemporary and reliable electrical
● IoT innovations
grids in nations and regions where
● Big data and sophisticated analytics outdated grids need to be replaced
with machine learning and artificial intelligence
on top Decentralized Energy Generation and
● Numerous communication protocols and the Smart Grid
technologies are utilized to transfer data between
The emergence of so-called decentralized energy
different locations (such as smart meters and
generation and microgrids/micro-generation is one
utility companies)
of the major trends in the power sector.
A smart grid today includes more than just smart

The shift towards decentralized energy generation
meters. Other components of the “smart grid”
means that more energy is produced and stored
include:

closer to the end-user, reducing the reliance on and consumed represents a significant shift in the
large-scale power plants and traditional energy energy industry.
sources. This shift also results in changes to the
revenue streams for energy providers, as customers One of the difficulties is integrating all of this
may produce more of their own energy. while simultaneously adding any extra capacity
that might be generated decentralize to the grid,
allowing businesses and individuals to sell energy
in addition to purchasing it. Additionally, isolated
microgrids help to lessen the effects of possible
disruption.
Challenges to Address
The transition to a smart grid faces numerous

obstacles. Some of these consist of:
● Consumer concerns (privacy and personal data

protection)
Figure 9.1: Energy Generations
● Cybersecurity
“Closer” does not always refer to proximity in terms
of distance. If a business has access to power We frequently observe consumer opposition in
generation where it is located, there is a good nations where smart meter programs have already
possibility that nothing else is physically closer. begun, which frequently results in the installation
However, one may easily see scenarios in which a of a smart meter ultimately being a choice; in other
power plant could also be located extremely close nations, denial has financial repercussions.
by.
Cybersecurity is a major concern in the digital age,
Integrating different resources is crucial, and particularly in industries where digitization and
decentralized energy is generally defined as energy digital transformation are being adopted. With the
produced closer to the point of use rather than at a increasing importance of data and the integration
huge facility from which it is transferred across the of IT and OT, ensuring the security of these systems
national grid. is crucial to protect against potential cyber threats
and breaches.
A shift away from centralized power generation
towards decentralization is happening as new Additional difficulties with smart grids include:
technology enables more diverse methods of energy
production, storage, and transmission. This change ● Regulatory adjustments
in the way energy is produced, stored, transported,
● The difficulty of incorporating sources

● The systems and alliances between different participants in an unregulated market
● The fact that, in many local markets, a small number of dominant multinational enterprises exist
● Modifications in prosumer attitudes
Summary
● Because they boost the integration of electric vehicles, reduce energy costs, enable hosting of renewable
energy sources, and increase grid resilience, microgrids play a significant role in constructing a low-carbon
future.
● The idea of a “smart grid” is not new. Additionally, it is a journey and a lengthy process, encompassing a wide
range of potential alternative steps and difficulties. However, it is evident that we have made significant
progress from the early stages of advanced metering.
● Smart appliances, smart meters, renewable energy sources, and energy-efficient resources are just a few
of the operational and energy-saving features found in smart grids.
● The advantages of a smart grid include increased efficiency and dependability of the electricity supply,
incorporation of more renewable energy into the current network, support for the mass production of
electric vehicles, new ways for consumers to optimize their electricity consumption, and a decrease in
carbon emissions.
● The use of smart grid technologies, solutions, and approaches in areas with older electricity grids
that experience outages and poor power quality is currently a major focus for improving functionality.
These areas include self-healing grid capacities, microgrids, and distributed energy resources (DER), the
communication architectures and technologies in grids. These technologies and approaches are being
used worldwide.

Unit 10
Environmental Economics
By the end of this unit, you will be The study of cost-effective resource allocation, utilization,
able to understand: and protection is known as environmental economics.
● Origin and scope of The fundamental tenet of environmental economics is
environmental economics that there are costs associated with economic growth that
● Strategies and challenges are not taken into account in more conventional models,
in Environmental and that environmental amenities (or environmental
Economics commodities) have economic worth.
● Environmental Economics Vs
In its broadest sense, economics is the study of how
Ecological Economics
people create, use, and dispose of products and services.
Environmental economics is concerned with how
resources are used and managed to benefit people while
addressing environmental effect concerns. It supports
research on the effects of environmental policies and
develops solutions for issues brought on by them.
Environmental benefits include things like having access

to clean water and air, ensuring wildlife survival, and
maintaining a stable climate. Although it is difficult to
quantify the value of environmental goods, losing them
may incur significant costs. Typically, fully privatizing
environmental goods is challenging, and they are also
vulnerable to the tragedy of the commons.
78 Environmental Economics
Externalities are a key topic in environmental use of natural resources and the implementation of
economics, as it is either prescriptive-based or alternative policies to address environmental issues
incentive-based. The misuse or destruction of such as air and water pollution, toxic compounds,
environmental goods, such as pollution and other and global warming.
forms of environmental degradation, can be viewed
as a type of market failure due to the negative The field of environmental economics emerged in
externalities they impose. the 1960s as the negative effects of industrialization
and pollution became more apparent. Environmental
Environmental economists may conduct theoretical economists view the environment as a form of
studies or experiments to determine the potential natural capital that provides essential resources for
effects of specific economic policies aimed at human survival. The field is based on neoclassical
addressing such issues. They may examine the economics, which addresses issues such as poor
costs and benefits of such programs. resource management, market failures, negative
externalities, and the provision of public goods.
Furthermore, environmental economics
often requires a global perspective As the movement matured over
because some environmental time, other complex aspects
goods are not exclusive to of the connection between
a single nation. This helps the environment and the
governments weigh the economy emerged. Strong
benefits and drawbacks environmental arguments
of alternative actions and and proposals from the
develop sound environmental study gave rise to current
policies. environmental policies and
regulations around the world.
Origins and Scope This resulted in the creation of
new environmental organizations, the
Environmental economics examines the most notable of which was the United Nations
impact of environmental policies on economies Environment Programme (UNEP) in 1972.
worldwide, with a focus on the efficient use of
natural resources and the implementation of Scope of Environmental Economics
alternative policies to address issues such as air
pollution, water pollution, toxic compounds, solid The primary focus of the discipline is how
waste, and global warming. environmental economics can be used to design
and implement environmental policies.
Origins of Environmental Economics
Environmental economics raises three crucial
Environmental economics is a branch of economics issues:
that focuses on the impact of environmental policies
on the economy. It aims to promote the efficient
● What economic and institutional issues give rise satisfies present demands without compromising
to environmental challenges? the capacity of future generations to fulfill their
own requirements.” The idea examines how
The concept of market failure in environmental
economic growth aids in promoting sustainable
economics suggests that either there is a lack of
development. Economic development,
markets for environmental goods, such as clean
environmental conservation, social equity, and
air, a beautiful environment, and scenic views,
institutional capacity are the four pillars of
or that the markets for these goods are not fully
sustainable development.
developed, resulting in an inefficient distribution
of environmental resources. ● Market failure: Market failure occurs when the
market is unable to efficiently allocate resources,
● What is the monetary value of environmental
such as clean water, due to the absence of a
harm prevention and eradication advancements,
market for the specific good or an insufficiently
as well as environmental degradation caused by
developed market. This is exemplified by the
pollution and other agents?
lack of a marketplace for clean oceans, where
A key component of environmental economics is
the value of a clean sea cannot be accurately
the measurement and estimation techniques for
determined. This is a prime example of market
these variables.
failure in the context of environmental goods.
● How can environmental regulations and
● Externalities: Externalities are unintended
economic incentives be effectively created
effects of economic activity that have an impact
to raise environmental quality and prevent
on people other than those who are directly
environmental harm?
involved. Externalities are another instance of
To determine if environmental laws and a failing market. They may be detrimental or
regulations and economic incentives are beneficial.
achieving their intended goals, a critical analysis
of both is necessary.
By addressing these issues, environmental

economics provides insights and tools
to policymakers for developing effective
environmental policies, balancing economic
growth with environmental sustainability, and
promoting the efficient use of resources to address
environmental challenges.
An unintended consequence of a negative

The following concepts are included in
externality harms the environment or the general
environmental economics:
public directly. An illustration would be: An
industrial activity leads to pollution which causes
● Sustainable development: According to UNEP,
health issues. Even when their actions impair the
sustainable development is “development that
environment and have a harmful impact on the
neighborhood, the polluting entities will not incur what buyers are prepared to pay for a good they will
expenses to address the pollution. not use or enjoy.
An advantage that accrues to parties unrelated to its ● Cost-benefit analysis: The goal of cost-benefit
creation is known as a positive externality. People analysis (CBA) is to balance the actual and
who come to visit relatives and friends nearby and perceived benefits of a policy. Therefore, the
would not have helped fund the creation of the park most beneficial policy is the one with the largest
can gain from it. Such people are called ‘free riders,’ excess of benefits over expenses.
meaning they will avail the benefits of an economic
resource without contributing anything. CBA begins with a basic policy that maintains the
current state of affairs. The predicted realization of
● Valuation: Assessing the value of environmental the perceived costs and benefits is chosen as the
and natural resources is a complex task, as temporal horizon. Benefits are situations in which
environmental economics places significant human well-being is increased, whereas costs are
importance on valuation to evaluate various situations in which it is decreased.
options for addressing issues related to
their use. To account for the time value of
money, costs and benefits that will
This is due to the difficulty in be recognized in the future are
assigning monetary value to discounted using a discount
intangible benefits such as clean factor. Costs include
air and a healthy ecosystem. opportunity costs, internal and
It is difficult to assign a value external costs, and externalities.
to a resource that has numerous Benefits include additional money,
benefits. For example, it is challenging an enhanced quality of life, clean water,
to assign a value to a mountain that has and beaches.
many uses like scenic beauty, regulation of
river flows, flood prevention, etc. Examples of Environmental Economics
Values can be attributed to environmental resources ● The cap and trade system, in which businesses
based on techniques of use and non-use. It is buy carbon offsets from developing nations or
simpler to place value on an item that is already in environmental groups to compensate for their
use by assessing the amount that customers and carbon emissions.
users are willing to spend on it. ● Implementing a carbon price to penalize carbon-
emitting sectors.
The “use” concept can be applied to opportunity
● Corporate average fuel economy (CAFE) rules,
cost pricing, replacement cost pricing, and hedonic
which are mandatory and specify the number
pricing techniques. The “non-use” method employs
of gallons of gas needed per mile for vehicles
the contingent valuation technique to determine
manufactured by automakers.
Strategies in Environmental The federal government can:
Economics
● Implement a carbon emissions cap.
The world is burdened with elevated environmental ● Utilize incentive-based strategies, such as
stress and ongoing ecological depletion due to imposing emissions charges based on quantity.
a growing population and rapid urbanization.
● Provide tax benefits to businesses that utilize
Despite scientific advancements transforming
renewable energy sources.
both the agricultural and industrial sectors, global
sustainability and equitable growth have remained
All of these tactics involve government intervention
elusive.
in the market, but the level of intervention can
vary. Environmental economic policy is politically
It is crucial for scientists, economists, and
influenced by the extent of allowable state action.
policymakers to collaborate in an integrated
and interconnected manner to promote
Environmental economics generally leads to
viable approaches to economic and
two different types of policies:
environmental development as
nations strive for self-sustaining
Prescriptive regulations: The
economies.
government prescribes
specific actions to reduce
Today, there is significant
environmental harm in
concern about the state of
a directive manner. For
the global environment. In
example, they may prohibit
affluent countries, where
highly polluting companies or
material output growth is often
mandate the use of emissions-
used as a measure of quality
controlling technology.
of life, pollution is viewed as a
particularly grave threat. Meanwhile,
Market-based regulations: Market-based
environmental degradation has significantly
policies utilize economic incentives to encourage
hindered economic growth.
desirable behaviors. For instance, cap-and-trade
policies impose financial penalties on polluters
When considering the interaction between humans
without explicitly prohibiting businesses from
and the environment, current perspectives have
polluting. These incentives motivate businesses
shifted towards proactive project and policy design
to reduce their emissions without imposing
to predict and minimize environmental damage.
restrictions on how they achieve it.
While environmental economics aims to identify

Since all resources, whether natural, financial, or
specific issues, there are various approaches to
human, are limited, these public policies work
addressing the same environmental problems. For
best when they maximize the benefits of resource
example, a state has several options if it intends to
efficiency. Policymakers must compare the
transition to renewable energy.
opportunity costs of different alternatives with The extent to which environmental economics’
their potential benefits to determine how resources conclusions have an impact on other industries
can be used most effectively to achieve the desired presents another difficulty. Because of the
goals. complexity of the global market, environmental
economists’ conclusions can give rise to dispute,
An important connection between traditional and their policy recommendations may be
decision-making methods and the emerging challenging to put into practice. Some examples
environmentally conscious management style include:
is the application of environmental economics.
It allows us to link ecological issues with the ● The existence of various carbon credit
established structures of human society. marketplaces is an illustration of the
haphazard global application of concepts from
Challenges of Environmental environmental economics.
Economics ● Another illustration of the balancing act needed
by policy ideas relating to environmental
Environmental economics typically necessitates a
economics is the fuel economy criteria issued by
global approach due to the nature and economic
the Environmental Protection Agency (EPA).
worth of environmental goods, which frequently
transcend national boundaries.
Some other Challenges are:
Due to the nature of these environmental concerns,

Addressing distributional issues and their effects:
non-governmental organizations (NGOs) like the
The entire society is impacted by the shift to a green
Intergovernmental Panel on Climate Change (IPCC),
economy, including technological advancements.
which hosts yearly gatherings for heads of state to
Therefore, it’s important to understand and
discuss global environmental policies, have grown
address the significant distributional implications
in prominence.
of technological development, in addition to
maximizing the performance of new technologies
and identifying effective regulations.
All cultural changes have winners and losers, and

unless this is acknowledged and addressed, the
desired green transition may lack legitimacy among
several important socioeconomic groups.
The state’s function is to create the right blend

of policies: Establishing the proper “framework
conditions” for the economy is a crucial
responsibility of government policy. This generally
pertains to the legal framework, such as contract
law, licensing procedures, and intellectual property in efficiency.
rights, which must be foreseeable and transparent.
Managing dispersed, increasingly global
The removal of environmentally detrimental environmental risks: Over time, environmental
subsidies, as well as conventional environmental issues are primarily concerned with various kinds
policy that controls emissions through taxes or of diffuse emissions. These come from several
performance standards, will continue to be crucial industries, including agriculture, shipping, aviation,
(where such exist). The purpose of such regulations and road transportation. Large areas are affected by
is to ensure that enterprises and families internalize diffuse source pollution, which may not be alarming
the external costs of environmental degradation. on its own but can be serious when combined with
other diffuse sources.
Emerging Green Capitalism: Economic and
environmental aims are thought to conflict, at least Addressing these challenges is further
since the 1960s when the current environmental complicated by the increasing importance of global
debate first began. It has been stated that business environmental concerns such as climate change,
decisions are based on maximizing as well as by globalization and the
profits; therefore, attempting to increased global trade of consumer
address environmental issues at goods. Addressing these issues
the same time will result in lower often requires international
earnings and less productivity. agreements and sharing of
responsibilities, which have
As concerns about the proven to be difficult to
environmental impact of achieve.
business practices increase, so
does the focus on sustainability in Difference between
commercial operations. This includes Environmental Economics
the growing popularity of organic and Ecological Economics
products, recycling initiatives for waste reduction,
and programs for offsetting carbon emissions. Ecological and environmental economics are two
subfields of economic theory that investigate
Realizing radical, as opposed to just incremental, how human activity and the environment interact.
technological change: The move to a green Environmental economics examines how the
economy depends on incremental improvements, environment and the economy interact, whereas
such as improved material and energy efficiency ecological economics views the economy as a
in current production processes. But we also need component of a larger ecosystem.
more significant, perhaps even radical, technical
innovation. For instance, replacing fossil fuels in the Environmental Economics
transportation industry and in the manufacturing
of iron and steel involves major technological A modified version of the neoclassical economic
transformations rather than merely small increases model serves as the foundation for the field
of environmental economics. This concept into an economic framework where doing so could
incorporates the environment into the financial be uncomfortable. However, ecological economics
system, borrowing vocabulary and a worldview from sees the flow of resources and income within an
theories of economic growth and development that economy as a component of the greater transfer of
already exist. It fully integrates theories’ notions resources and energy within the biosphere.
of capital and welfare while adapting them for
environmental goals. Although it is the source of its biggest vulnerabilities,
this could be considered ecological economics’
According to environmental economics, greatest strength. Ecological economics puts itself
development is measured as the accumulation at risk of exclusion from decision-making circles by
of social and economic capital minus the loss of choosing to deviate so far from the norm and not
environmental capital. In light of this understanding, using the current economic jargon.
growth is considered sustainable when overall
capital stocks do not decrease. This assumes that ● According to ecological economics, sustainable
these various forms of capital are highly development is a state in which the size
substitutable and complementary. of the economy does not exceed the
However, these assumptions planet’s carrying capacity.
may be contested in certain ● Ecological economics
circumstances upon close strict sustainability criterion
scrutiny. demands that natural capital
not decrease. Societies are
Nonetheless, environmental
permitted to exploit non-
economics has made
renewable resources as long
significant contributions
as other renewable resource
to raising environmental
stocks increase to compensate
awareness. It offers practical,
for this loss.
non-conventional solutions, such
● Ecological economics does not
as market-based approaches for resolving
view human, social, and natural capital as
environmental issues.
interchangeable. Therefore, a decrease in
environmental capital cannot be offset by an
Ecological Economics
increase in capital elsewhere.
The foundation of ecological economics is the idea

As we can see, ecological economics provides a
that the human economy is a component part of the
bold and precise definition of sustainability and a
larger ecological system. It boldly seeks to integrate
method for achieving it.
environmental management with economics, an
area where it has typically been disregarded.
Ecological economics has the advantage of not

attempting to include society and the environment
Commonalities
● The goal of environmental and ecological economics is to demonstrate how the two can work in harmony.
This is evident in areas like the management of natural resources and the application of market-based
methods.
● They can also be used to identify instances where economic activity negatively affects the environment,
such as pollution that imposes no costs on the polluter.
● Ecological economics and environmental economics both provide a framework for understanding the
factors that contribute to environmental and societal problems. Additionally, they offer techniques for
finding solutions to these issues.
● The importance of incentives in developing solutions to environmental challenges is highlighted by both

ecology and environmental economics.
Differences
● When viewed critically, it can be said that ecological economics is more pluralistic than environmental
economics, which is largely influenced by the neoclassical economics’ way of thinking.
● The values that guide these two schools of thought are very different from each other.
● The environmental component of the equation becomes more focused thanks to ecological economics.
According to this perspective, the economy must abide by the natural rules that govern the biosphere in
order to be incorporated into the natural economy.
● Environmental economics has a propensity to prioritize economic well-being when making decisions. It
assumes that the natural economy must be managed by the rules of the market system in order for the
economy to be integrated into it.
● Each has its strengths, and they both provide insightful assessments of the other. Despite having identical
objectives, they are built on different approaches and frameworks.
Summary
● Economics serves as a key instrument for decision-making regarding the use, conservation, and protection
of natural resources as it provides information on people’s choices, the costs and benefits of various
proposed actions, and the expected outcomes of environmental and other policies.
● The field of environmental economics focuses on the efficient utilization of environmental resources and
other resources.
● The economy and the environment are interconnected systems that involve numerous daily interactions,
as the environment provides both direct and indirect value (as raw material) for economic activities.
● Consequently, how the economy is managed can have an impact on the environment, which in turn can
affect both well-being and the efficiency of the economy.
● Environmental economics takes into account concerns such as the preservation and valuation of natural
resources, pollution prevention, waste management and recycling, and the effective establishment of
emission standards.
● The three fundamental pillars of society, environment, and economy form the basis of sustainable
development in the modern world. Successful implementation of environmental programs requires the
interaction of these three systems.
Unit 11
Environmental Justice
By the end of this unit, you will be Everyone has the right to live in a healthy and safe
able to understand: environment. According to the environmental justice (EJ)
● Improving environmental quality theory, all people need to be protected from environmental
● Reducing diesel emissions contamination and should enjoy a clean and healthy
through clean energy technology environment. Environmental justice entails the fair
and efficiency distribution of environmental benefits and the equal

protection and meaningful participation of all individuals
● Greening the urban environment
in the development, implementation, and enforcement of
environmental laws, regulations, and policies.
The environmental justice movement has historically

been a form of grassroots activism that has focused on
advocating for the rights and freedoms of communities
of color and low-income individuals in relation to
the environment. It has particularly addressed the
disproportionate impact of industrial pollution and the
lack of regulatory enforcement in these communities.
In addition to promoting community participation in

planning and environmental decision-making processes
to uphold or improve the environmental quality of
their neighborhoods, environmental justice policies
aim to ensure their protection against environmental
contamination.
88 Environmental Justice
This involves: have created for ourselves, and how it influences
both our comfort and our ability to stay healthy.
● Including a wider range of people in outreach
● Our reliance on natural resources to maintain the
efforts to involve environmental justice
built environment.
populations in environmental decision-making.
● The recreational opportunities that the
● Reducing health risks through judicious
environment’s natural setting offers.
environmental regulation.
● Aesthetics, which is the study of how our
● Enhancing the quality of the environment in all
relationship to the natural world is influenced by
communities through programs that reduce
its aesthetic appeal.
emissions and pollution, clean up and restore
● When we talk about preserving environmental
contaminated properties, and fund urban parks
quality, we take all of these things into account.
and green spaces.
The two main frameworks for environmental
Improving Environmental Quality equity are as follows:
● Preventing environmental “bads,” including an

When we talk about environmental quality, it excessive amount of toxins.
includes the entire surroundings and not simply the
● Promoting environmental “goods,” such as
natural environment. Environmental quality refers to
ensuring access to parks, environmentally
the state of the environment as a whole (including
friendly amenities, and leisure activities.
the plants and animals it supports) as well as the
impact it has on the physical and emotional well-
Need to Protect Environmental Quality
being of those who live there.
There are several justifications for preserving

environmental quality:
● To maintain the health of inhabitants and the

community. All of these environmental variables,
along with others, ensure that people are healthy
and help to create a healthy community. These
include clean air, water, and soil, enough open
space, ample resources, and clean air, water, and
soil.
The planet’s air, water, and land, as well as the ● To protect local resources. Maintaining the
plants and animals that inhabit them, collectively cleanliness of the community’s water supply,
make up our environment. such as lakes, rivers, streams, wetlands, etc., is
not only important for environmental reasons but
Additionally, we need to think about:
also for practical ones.
● The constructed environment, or the space we ● To improve the quality of life and make it more
enjoyable. The community’s physical appeal, it is particularly beneficial or appropriate to work to
as well as its recreational and relaxation safeguard it:
possibilities, improve the quality of life for its
residents. A pleasant setting lowers stress levels ● When a specific threat exists. When the last
and promotes interaction, which eventually remaining green area in a community is up for
improves communal life. development or when a significant wetland is at
risk of contamination from an industrial facility,
● To improve the neighborhood’s aesthetic appeal.
it is crucial to highlight the negative effects of
Living in a beautiful environment, both natural and
putting off environmental issues.
man-made, improves one’s physical conditions
and quality of life while also fostering pride in ● Whenever a community development project is
and a sense of belonging to one’s neighborhood. underway. This is an opportunity to get involved
It offers people optimism and motivates them early and incorporate environmental protection
to maintain the community’s physical and social into the development plan rather than waiting
well-being. until there is a threat to environmental quality.
● To maintain economic health and ● When a brand-new residential,

attract new, environmentally commercial, or industrial
responsible businesses. An development is just getting
e n v i ro n m e n t - c o n s c i o u s started. Through rewards and/
community is desired by or rules, a developer may be
all. Everyone wants to persuaded to use eco-friendly
live and work in a clean practices while selecting the
environment, especially sites, preparing the designs
“green” firms (those for building, choosing the
that care about, or whose materials, etc.
business itself is concerned ● When there is an
with, environmental preservation). environmental crisis. People are more
● To preserve ecosystems. Ecosystem likely to consider environmental quality
disruption typically results in unanticipated issues when the environment signals the same,
(typically detrimental) consequences, such as for instance, when aquifers begin to dry up,
global warming, erosion, and the extinction of when global warming starts affecting, when the
species. Ecosystems comprise landscapes, local air quality becomes hazardous, or when
plants, animals, resources, and climate that excessive rains cause havoc.
interact with each other and sustain the character
of the environment in a particular place. Who is Responsible for Preserving the
Environment?
When should Environmental Quality be Protected?
Local, State, and Federal Officials: In the majority
Although you should always be aware of of nations, state and federal authorities are in
environmental quality, there are some times when charge of protecting environmental quality. Their
effectiveness is based on their financial resources ● People whose line of work is environmental
as well as the level of political backing they receive quality or environmental research: Foresters,
from the ruling party. These organizations and hydrologists (water experts), public health
representatives could be valuable allies because professionals, wildlife biologists, botanists, and
most developed and many developing countries other life scientists typically care deeply about
have significant environmental concerns. environmental quality and are frequently in a
position to provide important information about
Local, National, and International Environmental it.
Organizations: Local groups typically have a good
● Individuals who take advantage of nature
understanding of the situation in their area, as well
for recreation and spiritual uplift: Outdoor
as the real problems and possible strategies. Larger
enthusiasts including hunters, fishermen,
organizations with legal divisions, funding access,
birders, hikers, skiers, and others typically have
and the means to engage in protracted struggles
a strong desire to safeguard the wilderness and
for environmental quality include the Sierra Club,
the integrity of the natural environment.
Greenpeace, Friends of the Earth, or the World
● Architects and developers who
Wildlife Fund.
care about the environment.These
Community Activists: Even though individuals are leaders in promoting
environmental quality may be just green development and the wise
one of many issues they are use of open space because they
interested in, when a problem care about both the natural
arises, they can be effective and built environments.
defenders of environmental
Businesses and corporations:
quality.
Some companies and businesses
Those directly affected by make efforts to support and
environmental quality: This group safeguard environmental quality and
can include individuals with extremely different take measures for the same in their own operations.
perspectives on the environment. These companies and businesses are said to be

environmentally conscious. Others are compelled
● People whose livelihood is based on it: Even though to pay attention to it by regulations or are motivated
commercial fishermen and loggers, for instance, to do so by incentives.
are occasionally viewed by environmentalists
as enemies of the environment, they have just Whatever the reason, if you can find areas of
as much to gain from environmental quality as agreement with the corporate community, they can
everyone else. They can develop the same level be powerful and effective partners.
of care for environmental quality as the most

Everyone in a community is impacted by the
ardent environmentalist if they fully understand
environment’s quality in terms of their health
how maintaining healthy fish stocks safeguards
and well-being. In addition to directly affecting
their way of life.
human health, environmental quality also has a Reducing exposure to diesel pollutants is particularly
significant impact on resource availability and crucial for the benefit of the environment and
quality, the security of the food and water supply, human health.
and the psychological and social well-being of the
community as a whole. Impacts of Diesel Emissions
In many cases, protecting environmental quality Diesel emissions have a negative impact on human
entails preserving open space and preventing health, the environment, the global climate, and
pollution, but it also entails addressing: environmental justice.
● Loss of habitat for plants and animals Human Health: Exposure to diesel pollution can
cause significant health disorders, particularly
● Conserving resources (including food stocks,
in young children and the elderly. It can lead to
such as fish populations)
conditions such as asthma, respiratory infections,
● Exploring alternate energy sources
and worsen existing heart and lung conditions.
● Engaging in sustainable development and These ailments can result in increased visits to the
agriculture emergency room, hospital admissions, work and
school absences, and even premature death.
● Building in accordance with environmentally
responsible principles
Environment: Diesel engine emissions contribute
to the formation of ground-level ozone, which
Reducing Diesel Emissions
harms plants, including trees and crops. Acid rain,
The planet is steadily warming. This is due to the another byproduct, damages lakes, streams, and
growth in greenhouse gases brought on by human soil, and enters the human food chain through
activity, which has caused problems in the areas water, produce, meat, and fish. Additionally, these
of health, the environment, and humanitarian aid. pollutants contribute to property damage and
Despite this, the fight against climate change decreased visibility.
offers a genuine chance to transition towards a

Global Climate: Climate change impacts various
low-carbon civilization while fostering innovation,
aspects such as air and water quality, weather
creating local and global jobs, and promoting social
patterns, sea levels, ecosystems, and agriculture.
justice.
Reducing greenhouse gas (GHG) emissions from
diesel engines through fuel economy improvements
and idle reduction techniques can help mitigate
climate change, enhance energy security, and boost
the economy.
Environmental Justice: The Environmental

Protection Agency (EPA) aims to protect all
individuals from environmental and health threats,
ensuring a safe environment to live, learn, and work. ● To promote the utilization of byproducts,
recyclable waste, and locally sourced resources
The planet relies on heat and electricity. Our as primary inputs for conversion processes.
transportation systems, heating and powering of
● To generate employment opportunities in the
homes, infrastructure development, and support
sector.
for all sectors require energy.
● To enhance the overall quality of life.
Currently, our primary reliance is on fossil fuels

What Makes Clean Technology Crucial?
such as oil, coal, and gas, which release CO2
stored in the ground for millions of years. Swiftly
Climate Change refers to a change in an area’s
transitioning to renewable and sustainable energy
average temperature or weather patterns and
sources is imperative if we hope to mitigate climate
is possibly the most well-known environmental
change.
problem. Average global temperatures are rising
alarmingly, and if we don’t take action to reduce
Technology that is “clean,” also referred
our carbon footprint, they will continue
to as “cleaner technology,” prevents
to rise.
environmental harm at its source.
On the other hand, clean-
Pollution occurs when
up technology is defined
hazardous elements enter
as the act of minimizing
the environment. There are
environmental harm through
three types of pollution—air
the retrofitting, modification,
pollution, water pollution,
or addition of end-of-pipe
and land contamination—
pollution abatement systems
all of which can be extremely
to an already-operational facility
dangerous for living things.
or process.
Biodiversity loss refers to the loss of

Clean technology involves the practical
diversity of life on Earth. The well-being of the
application of knowledge, methods, and means to
Earth is greatly impacted by biodiversity loss, as
meet human requirements for the most efficient
discussed in our blog post on extinction prevention.
use of energy, natural resources, and environmental
Living things depend on the existence of other
protection.
species to survive, and the loss of biodiversity can
have disastrous cascade effects.
It aims to achieve the following goals:
Among many other options, using sustainable

● To reduce waste production and levels of
technology is one way to bring about change. With
polluting emissions, thereby protecting or
the widespread use of electricity, advancements
improving environmental quality.
like wind turbines, solar panels, and geothermal
● To enhance the efficient use of energy and raw
energy can significantly reduce emissions.
materials.
Case for Clean Technology: manufacturing of cleaner goods. The private sector
should be encouraged to be economically efficient,
Imported or locally developed clean production competitive, and responsive to customer demands
technology can enhance output and prolong while also protecting the environment and long-
the lifespan of natural resources. Traditionally, term resource base.
environmental policy and practice have prioritized
pollution control over pollution avoidance. Products have proven to be the most cost-effective
means of reducing consumption of raw materials,
Waste is typically treated using outdated energy, and pollution when pricing signals reflect
environmental technologies, transforming it into a appropriate social and environmental costs for
form of pollution that is relatively less damaging. cleaner production.
However, a new shift is underway, favoring cleaner
production methods that minimize environmental UNEP Report
damage at its source.
It is argued that all economic sectors require
Clean technology assists in analyzing adequate technological advancements
options for pollution avoidance before to achieve more efficient use of
pollutants are even produced. natural resources, reduced waste,
These options include product and fewer polluting byproducts.
and manufacturing process Additionally, sharing and
improvements, on-site distributing knowledge,
recycling, and resource skills, and technology,
recovery. Industrialists are now as well as implementing
realizing that modifying process appropriate financing structures,
technologies to reduce pollution is are necessary for genuine global
less expensive and more profitable industrialization and the adoption
than seeking cheaper waste disposal of the best available and relevant
methods. technologies and production processes.
To minimize risks to people and the environment, The history of industrialization demonstrates that
clean production technology continuously applies initially, wastes and toxins were simply released
an integrated preventive environmental strategy to into the air or waterways, surpassing nature’s
processes and products. This strategy includes: capacity for assimilation.
● Eliminating harmful raw materials while However, numerous clean production technologies
conserving energy and raw materials. have been developed and are currently in use,
particularly in industrialized nations. These
● Reducing emissions, waste volume, and toxicity
technologies support waste reduction and the
before they are released from a process.
control of harmful emissions, resulting in more
Industrial policies should support the efficient energy utilization.
What Prospects does Clean Technology have the transition toward a more sustainable way of life
going forward? that the world is experiencing.
Clean technology is clearly more relevant than ever, Given the rapid expansion of the clean technology
given the surge in sustainable living and awareness sector, it is only logical that investors are moving in
of climate change. this direction. Impact investment grows alongside
cleaner technology. In 2020, it was projected that
It is essential to intensify sustainability efforts the market for impact investments would be worth
globally, as environmental challenges and 715 billion USD.
population growth coexist. We must take action
now before the situation worsens, as our natural Smart Agriculture: When it comes to reducing
environment is undergoing dramatic changes. carbon emissions, smart agriculture is a game-
changer. The agricultural sector greatly affects
The Earth’s average temperature is rising, water our world, with the cattle industry alone being
resources are becoming increasingly limited, and responsible for 44% of human-caused methane
numerous animal species are facing extinction. emissions.
Unfortunately, human activity is a major contributor
to these destructive changes. Therefore, we must
utilize sustainable technology to put an end to
these detrimental behaviors.
Reports indicate that the market for green

technology was valued at 11.2 billion USD in 2020
and is projected to reach 36.6 billion USD by 2025.
The number of individuals eager to take action is
growing, along with knowledge of sustainability. Only a small portion of the field of smart agriculture
In the future, we can expect clean technology to involves hydroponics. With topics like precision
become even more widespread than it is now. farming and artificial intelligence being used in the
agricultural sector, there is much to learn in terms
Impact Investing: Impact investing is the practice of technology.
of making financial investments in businesses that
also have a positive impact on the environment. Artificial Intelligence: Machine learning is utilized
These impact investments target businesses in this sophisticated computer program to mimic
whose fundamental business strategy includes human intelligence. Artificial intelligence is not
making advancements. limited to the agricultural sector; it can be applied to
various industries. AI has the capability to perform
Companies that are considering adopting a clean tasks with a high degree of precision, significantly
tech strategy have even more incentive as impact reducing waste, whether it be resources or time.
investing gains popularity. Cleaner technology aids
Due to its ability to automate numerous steps in the power generation, and storage.
production process, AI has proven to be especially
helpful in manufacturing operations. It can also When it comes to developing these next-generation
save costs, which can then be allocated to fund power solutions, expertise can be beneficial for
future clean technology initiatives. those who possess it, providing jobs and contracts
to others who may be hesitant to adopt sustainable
COP26 Impacts: Even though it has not yet energy.
concluded, COP26 is already influencing
international agreements and strategies related Of course, the financial benefits of clean energy
to climate change. At the event, world leaders are are just part of the story, as the primary motivation
addressing a variety of topics, including gender, for using clean energy is to improve the future
finance, fashion, and education. Here are just a of the planet. However, as the use of fossil fuels
few of the outcomes of COP26 so far. Further decreases, it will also impact the financial benefits.
advancements that will be implemented after the Therefore, clean energy is not only beneficial for
event are anticipated, such as: the environment but also a step in the right
direction for business.
● More than 20 nations and
financial organizations have Greening the Urban
pledged to cease funding Environment
any overseas fossil fuel
development projects. 70% of the world’s population
is projected to reside in cities
● Joe Biden, the President
by 2050. Cities in developing
of the United States, has
nations face numerous
committed to reducing
challenges. It is crucial to
worldwide methane emissions
consider how the expansion of our
by 30% by 2030.
cities impacts the environment. How
● Africa is prepared to invest USD 6 billion does the environment of an area get affected
in climate change adaptation. when what was once grassland or forest is now
● India aims to achieve zero emissions by 2030. covered in concrete?
What Economic Benefits Will Clean Energy Bring? We now understand that our actions can harm
the planet, altering its climate and impacting the
Clean energy has financial advantages, including creatures, plants, and inhabitants that call it home.
the creation of jobs to upgrade infrastructure, As the world learns more about climate change
produce clean energy solutions, and install and every day, the importance of green spaces in urban
maintain them. As the world begins to shift away development is being recognized and prioritized.
from fossil fuels, renewable and clean energy
sectors are growing, which means that there will be The objectives of urban greening are multifaceted
additional opportunities in areas such as eMobility, yet effective. They improve the quality of life for
local residents and wildlife, while also making our rainwater gardens, and depaving can help mitigate
cities more visually appealing and environmentally the effects of urban heating caused by the climate
friendly. crisis and urban development.
The effects of excessive pollution in metropolitan The report states that cities warm by an average
areas are observable, with Beijing’s haze serving of 0.56C during the day and 0.43C at night. Urban
as an extreme example. Climate change is not areas warm, on average, 29% faster than rural areas,
solely about rising sea levels. Cities worldwide are which warm by 0.4C during the day and 0.37C at
utilizing urban greening to protect and enhance night.
their skylines and overall health.
The size of a city was found to be linked to its rate
Benefits of Urban Greening of urban warming, with megacities warming by an
average of 0.69C per decade during the daytime
● Fight noise and air pollution. compared to 0.41C per decade in smaller cities,
● Capture rainwater that may otherwise according to the researchers.
cause flooding.
There were also variations in the
● Provide a habitat for wildlife in the
rates of urban heating between
area.
continents, with Asia’s megacities
● Reduce carbon emissions in warming the fastest both during
the neighborhood. the day and at night. Cities
in Oceania experienced the
Architects and city planners least warming at night, while
alike have been searching for those in Europe experienced the
ways to promote sustainable urban least warming during the day.
living as climate change becomes an
increasingly significant issue. Scientists discovered that the climate
crisis is the primary cause of urban warming
When constructing something, its future usage is in around 90% of the cities they studied, with
taken into account alongside its immediate use. approximately 0.3C of heating per decade on
By incorporating urban greening, these structures average attributable to human-induced climate
benefit both the environment and the people who change. Rapid urbanization in certain areas of
utilize them, resulting in a more sustainable and China and India accounts for around 0.23C of urban
enjoyable living environment. The presence of a warming every ten years, according to scientists,
living wall or a tree-lined corridor greatly enhances who also emphasized that urban expansion can
the positive environmental impact of a location. contribute to urban heating.
According to a study that revealed cities have been However, the paper highlights that urban greening
warming by 0.5C per decade on average, urban programs, such as tree planting that covers
greening projects such as planting street trees, exposed land surfaces with natural vegetation, can
mitigate the rate of urban warming by generating a cooling effect, especially at night, and by retaining some
of the ambient surface heat.
Urban greening has been shown to reduce urban warming by an average of 0.13C per decade in Europe.
Similarly, in Chicago, a plan to increase tree canopy after a heatwave in 1995 has helped reduce the rate of
urban warming by approximately 0.084C per decade.
Decision-makers are urged to consider urban greening programs as a viable option for reducing urban
warming. They argue that these programs can alleviate the effects of the “urban heat island” phenomenon
and reduce the risk of exposure to future heatwaves, which are more likely to impact cities.
Summary
● Environmental justice must be considered in the context of global social inequalities that impact people’s
health, well-being, and the environment both within and between nations.
● The underlying power inequalities are the primary factor in the unequal distribution of benefits and
drawbacks of production systems and the environmental damage they cause, with the poorest and most
marginalized groups bearing a disproportionate burden.
● Environmental justice upholds the integrity of Mother Earth, recognizes the interdependence and ecological
interconnectedness of all species, and ensures the right to be free from ecological harm.
● Public policy must be founded on respect for all individuals and the pursuit of justice, free from any form of
bias or discrimination, to achieve environmental justice. This necessitates the right to ethical, egalitarian,
and responsible use of land and renewable resources for the betterment of a sustainable planet for humans
and other living beings.
● Environmental justice calls for universal protection from environmental injustices, such as nuclear testing,
the extraction, manufacturing, and disposal of toxic/hazardous wastes and pollutants that compromise the
right to clean air, land, water, and food. It also upholds the fundamental right of all individuals to political,
economic, cultural, and environmental self-determination.
● Environmental justice demands the cessation of all production of toxins, hazardous waste, and radioactive
materials, and holds all past and present producers accountable to the public for site detoxification and
containment.
● Environmental justice supports the need for urban and rural ecological policies that clean up and restore
our cities and rural areas in harmony with nature, while respecting the cultural integrity of all communities
and ensuring equitable access to resources for all.
● Environmental justice requires individuals to make deliberate choices and prioritize changes in their
lifestyles to ensure a healthy natural world for present and future generations. This includes committing to
using fewer resources from Mother Earth and generating less waste.
Unit 12
Energy Justice
By the end of this unit, you will be Energy justice aims to include the values of justice,
able to understand: fairness, and social equity in the development of new
● Energy justice energy systems. Energy justice promotes more inclusive
● Three-Tenet Framework of decision-making processes and the equal distribution of
Energy Justice the costs and benefits of energy system services. It can
also be used as a framework to pinpoint when and how
● Distributional Justice
injustices arise in energy systems and offer solutions for
● Recognition Justice their eradication.
● Procedural Justice
Energy justice can be local, regional, national, or worldwide
● Energy injustice in India
in its strategy and implementation due to the different
sizes at which energy systems and changes occur.
It also draws on “top-down” and “bottom-up” viewpoints

and is supported by two frameworks: one for decision-
making and the other for three core principles of energy
justice.
First off, the framework for making decisions is based on

eight fundamental principles: responsibility, sustainability,
due process, transparency and accountability, equity
across generations, affordability, and availability. The
framework suggests that in order to create energy policies
that are more just and equitable, decision-makers should
apply these principles.
99 Energy Justice
Second, the three fundamental principles of energy A fourth tenet of the energy justice paradigm,
justice are relevant across a range of energy cosmopolitan justice, has been proposed in
systems and at different scales. addition to the three fundamental tenets. This
concept asserts that injustice is a worldwide issue
By putting these principles into practice, we can that affects all people in all countries and that it
determine where and how injustice manifests itself is not just a national problem. All agents who are
in energy systems: capable of comprehending, facilitating, and acting
on them are subject to the ethical obligations
● Procedural Justice is the capacity of individuals represented by this.
to be a part of the decision-making processes
about the technologies and infrastructures of the These principles are meant to be used at every
energy system. It emphasizes the significance of decision-making stage throughout the development
“justice as public involvement” and investigates of the entire energy system, from resource extraction
how to produce “just” outcomes through to infrastructure siting through production,
the mobilization of local knowledge, operation, pricing, use/consumption, and
more information transparency, waste management.
and improved institutional
representation. Energy justice has an inherent
multi-scalar (energy,
● Distributional Justice
economic, environmental, and
questions regarding the
cultural) character because
placement of energy
of the three core principles
infrastructure as well as
and cosmopolitan justice.
advantages and burdens
(‘who gets what’) throughout
the economy. Focusing on the
Defining Energy
distribution of energy as a “social
Justice
good,” distributional justice looks at
Energy justice is the pursuit of equity in the
the areas where energy provision damages
social and economic aspects of energy system
people as a “social evil” and, as a result, where
participation, as well as the alleviation of social,
inequities in the functioning of the energy system
economic, and health burdens on those who have
arise.
historically been harmed by the energy system.
● Recognition Justice comprehends the causes Energy justice attempts to improve access to,
of social injustices and how marginalized and affordability of, cleanliness of, and democratic
poor groups are treated in connection to energy management of energy for all communities, while
systems. In order to lessen social inequality, explicitly focusing on the problems faced by
recognition justice takes into account groups in underprivileged people.
society that are neglected or misrepresented and
demands increased acknowledgment of these Energy justice addresses fairness and equity
groups. issues within the current extractive energy system
100 Energy Justice

and incorporates elements of “deep democracy,” Fair burden sharing throughout development
cooperation, and regeneration that feature in the and participation in all facets of “the formulation,
just transition framework. Energy justice, also implementation, and enforcement of environmental
referred to as “energy equity,” is essential to the just laws, regulations, and policies” are two guiding
transition. principles of the environmental justice movement.
The dimensions of energy justice include: From this extensive history, energy justice is born.
The consensus among academics is that an energy
● The term “energy burden” describes the cost of just society involves an equitable distribution of the
energy expenses in relation to total household advantages and disadvantages associated with the
income. production and consumption of energy services.
● Energy insecurity, which refers to the challenges Additionally, it is one that treats people and
that families encounter in order to meet their communities fairly when making energy-related
basic needs. decisions.
● Energy poverty, which is the lack of actual access

Furthermore, key concerns of the field include:
to energy.
● Energy democracy, the idea that local ● Issues of access

communities should have a say in determining
● Distribution of harms
their future use of energy.
● Fairness in energy decision-making to prevent
decisions from violating civil liberties and human
Environmental justice and climate justice are
rights
concepts that both practitioners and academics
in the field are familiar with, and energy justice ● Informed participation
is no different. The principles of procedural and
substantive (or distributive) justice are intertwined The demands for distributive and procedural justice
in environmental and climate justice. made by the movements for environmental justice
and climate justice are mirrored in energy justice.
Among its objectives are the following:
● Allowing the community to control and gain

authority over the methods of energy generation.
● Ensuring that the benefits and drawbacks of

energy production operations are distributed
fairly and equally.
● Emphasizing the issues faced by underprivileged

communities.
101 Energy Justice

Usage of Energy Justice in Social Science and Law Social scientists tend to prefer the terms energy
justice, energy democracy, and energy insecurity.
Practitioners and advocates for energy justice Legal scholars approach energy justice in a
explicitly mention the importance of elevating the less clearly-defined manner and use a variety of
voices of low-income individuals, as well as the concepts, including all those mentioned above, as
critical role that equity plays in undoing past harms well as clean energy equity, energy poverty, and
that communities have suffered as a result of the energy burden.
current energy system.
According to research, the three analytical frames
Researchers who study energy justice typically of advocacy, social science, and law share
adopt a more measured approach. Until recently, many similarities. While there is some overlap
most debates on energy justice did not include an in vocabulary, the more challenging question is
examination of the historical damages experienced how each group uses these terms differently and
by specific groups. Instead, academics in the field of whether these different uses are in conflict with
energy justice have generally focused more closely one another.
on procedural and distributive justice concerns.
The Three-Tenet Framework of Energy
A variety of terminologies have emerged under Justice
the broader concept of energy justice in both
social scientific and legal literature, similar to the As environmental justice work has become more
approaches taken by practitioners. These include: conceptually sophisticated over the past 40
years, efforts have been made to apply lessons
to a broader range of issues. This evolution can
Energy Justice 1
be seen in the rise of “energy justice.” Since its
Clean Energy Justice 2 inception, academic research on energy justice
has significantly increased, raising crucial issues
Energy Equity 3 about the role of energy institutions in addressing
expanding poverty inequalities and the challenges
Energy Democracy 4
related to rising unaffordability.
Energy Insecurity 5
Despite the growing interest in energy justice
Energy Burden 6 research, the conceptual and analytical frameworks
have tended to emphasize social conditions and
Energy Poverty 7
processes, rather than the underlying institutions,
structures, and systems of the economy and
Figure 12.1: Energy Justice politics. For instance, numerous studies have used
the three-tenet justice framework to describe and
examine ethical problems related to energy.
102 Energy Justice

The concept is based on three principles underexamining the structural and ideological
distributional, procedural, and recognition justice foundations of the issue.
that encourage assessments of discriminatory
energy policies and projects. It was originally As a result, discussions of energy justice typically
adopted from environmental justice research. draw their analytical line at energy poverty.
Here’s a quick rundown of the three principles that Although there is a valid connection between the
apply to energy: problems of energy justice and energy poverty,
the language can restrict how problems are
● Unfairness in how society is expected to split identified, how far investigations can go, and
the costs and rewards of energy production is a what kind of analysis can be conducted. More
matter of distributional justice. When there are extensive discussions regarding the overall justice
disparities in income, energy costs, and living implications of contemporary energy systems are
conditions, one form of distributional unfairness needed.
that arises is fuel poverty.
● Procedural justice calls for equal

Distributional Justice
and just participation of all
Distributional justice acknowledges
stakeholders in energy decision-
the physically unequal
making. Achieving procedural
distribution of environmental
fairness requires full
benefits and harms, as well
availability of information
as the unequal distribution
and appropriate policy
of the responsibilities that
instruments to promote public
accompany them. It evaluates the
engagement.
points at which “questions about
● The importance of understanding the desirability of technologies in
various forms of vulnerability principle become entangled with issues
and specific requirements related to energy that relate to specific localities” and calls for an
services among social groups is emphasized by equitable distribution of society’s advantages and
recognition justice, especially for marginalized disadvantages among all its members, regardless
communities. of wealth, race, or other factors.
The three-tenet paradigm, without directly Such demands for justice require the combination
addressing the complicated political and economic of evidence of inequality and an argument for fair
reasons that frequently result in energy injustice, treatment because they acknowledge the uneven
provides a conceptual foundation for recognizing distribution of certain resources. The location of
and assessing issues related to shared energy, wind resources serves as an example.
including fuel poverty. The framework often
focuses more on ‘tailpipe’ issues and solutions, In terms of distributional justice, access to energy
such as increased accessibility and cost, while services is just as important as the placement
103 Energy Justice

of infrastructure. The fuel poverty agenda has manner and has been associated with politically
highlighted the unequal distribution of costs marginalized civil rights groups across North
associated with accessible, affordable energy America. Subsequently, it has been applied in
services from a consumer standpoint. relation to class, gender, and religion.
Energy justice raises issues related to physical Access to and the influence of multi-level legal
access to power and heating, as well as the degree systems support procedural justice. Additionally, it
of freedom and control individuals have over their is influenced by softer, non-regulatory factors such
lives. as customs, standards, norms, and behaviors.
Recognition Justice The application of three methods promotes

the attainment of just outcomes rather than
“The practice of disrespecting, insulting, and categorizing procedural injustices or exposing
degrading the identities of certain individuals and mechanisms of exclusion. These methods can be
places in relation to others” is the definition of achieved through the mobilization of local
recognition. Recognizing that justice expertise, increased transparency
demands fair representation of of information, and improved
people, freedom from physical institutional representation.
threats, and full and equal
access to democratic rights Energy Injustice in
goes beyond mere tolerance. India
Lack of acknowledgment Some adverse effects of

can manifest itself in various global warming include the
ways, including through political risks of famines and droughts,
and cultural hegemony, insults, a worldwide decline in crop
denigration, and devaluation. It can production, floods, and a shortage
also take the form of misrecognition, which of fresh water supplies, as well as a rise
is a distorted expression of people’s beliefs that in sea levels, among others. These effects have
may be humiliating or contemptuous. Therefore, been specified by the Intergovernmental Panel on
it entails the request for people to acknowledge Climate Change (IPCC). Millions of people residing
the diverse perspectives that are rooted in social, in tropical nations like India are expected to be
cultural, ethnic, racial, and gender differences. greatly impacted by these repercussions.
Procedural Justice Energy use is strongly linked to a substantial

portion of the greenhouse gas (GHG) emissions
Access to the decision-making procedures that that cause global warming. The environment
govern the aforementioned distributions is a matter ministry estimates that among all energy sources,
of procedural justice. It involves demanding fair electricity alone has contributed around 38% of
procedures that involve all parties in an inclusive GHG emissions and roughly 52% of CO2 emissions.
104 Energy Justice

Although burning fossil fuels to produce energy is It was discovered that none of the 15 communities
the main cause of GHG emissions, approximately included in the survey had complete electrification.
65% of the nation’s installed capacity for power While official records indicate that more than 50%
generation still relies on burning fossil fuels. of homes are electrified, the supply is so inadequate
According to an estimate by Greenpeace, India’s that the per-person usage of energy is pitifully low.
contribution to global CO2 emissions will rise from
approximately 1,126 million tonnes in 2003 to With less than 100 watts of electricity consumed
roughly 4,039 million tonnes in 2050, increasing its per person in the majority of the surveyed villages,
proportion of emissions from 4.8% to 8.7%. the fundamental purpose of electrification is all
but moot. The majority of states define a family’s
While it may seem reasonable for India to advocate daily energy needs as one unit. The fact that there
for shared but distinct duties for each country to is neither a regular supply nor is it offered when
reduce its own GHG emissions, its own track record people most need it makes the poor supply to the
of energy use by the two main types of population villages even worse.
should be a cause for serious concern. The wasteful
use of energy by those who can afford it and the Rural areas fail to meet even their most basic
lack of access to energy by the poor are matters of needs for lighting and agriculture, despite the fact
great concern. India has a major responsibility to that the demand for and supply of power to towns
its own citizens to mitigate the effects of climate and cities have been growing at a remarkable rate.
change as much as possible. The country’s total installed producing capacity
increased dramatically by 162% from 58,012 MW in
According to a Greenpeace analysis titled “Hiding 1989 to 152,148 MW in 2009!
Behind the Poor,” a significant portion of India’s
population, particularly those in the lowest income A careful investigation of the electrical sector
category, emits roughly 335 kg of CO2 per person, reveals the true causes of this egregious
while those in the highest income group emit about disregard for rural areas. The greater issue is
1,500 kg. caused by significant inefficiencies in generation,
transmission, distribution, and utilization.
Sorry State of Affairs
In order to highlight India’s unfair treatment

regarding power, Greenpeace India conducted
a study in 2009. Relevant data from five distinct
states and four regions were gathered to compare
the electrical supply scenario between the rural and
urban populations. Three villages, one tier A city,
one tier B city, and one from each of these states
were selected for the survey.
105 Energy Justice

The inherent inefficiencies of a poorly managed grid-based centralized power generation system alone result
in a loss of between 25% and 40% of the installed capacity.
A select few efficient techniques, such as generating plant performance enhancement, T&D loss reduction,
consumption waste minimization, demand-side management, and energy conservation, have the ability to
close the gaps.
Successive governments have looked to the grid-based centralized generation system as a means of
accelerating economic growth and rural electrification, but in reality, it mostly contributes to meeting the
rising demand for power from only the metropolitan population. The best ways to give rural residents quality
access to electricity are through decentralized energy solutions.
Summary
Energy justice is the pursuit of equity in the social and economic aspects of energy system participation, as
well as the reduction of social, economic, and health burdens on those who have historically been affected
by the energy system (referred to as “frontline communities”).
Energy justice aims to improve access to, affordability of, cleanliness of, and democratic management of
energy for all communities while explicitly focusing on the problems faced by underprivileged people.
The environmental justice and climate change movements have longstanding scholarly and grassroots
traditions that energy justice draws on.
Energy justice, energy equity, and energy democracy are frequently framed by those involved in the movement
for the switch from fossil fuels to renewable energy as components of a larger “just transition” to a low-
carbon regenerative economy that will address the injustices of the fossil-fuel energy system and extractive
economy across various sectors.
The demands for distributive and procedural justice made by the environmental justice and climate justice
movements are reflected in energy justice, which includes a number of objectives, including:
● Giving the community more authority and control over the methods of energy generation.
● Ensuring that the benefits and drawbacks of energy-producing operations are distributed fairly and equally.
● Highlighting the issues faced by underprivileged communities.
106 Energy Justice

Unit 13
Creating an Energy Policy
By the end of this unit, you will be Because energy is such a crucial component of economic
able to understand: growth and a strong society, we frequently worry about
● Energy economics and policy its future supply. No government depends completely on
● Energy demand the market for its energy supply, and stakeholders have
strong views on both the goals and tactics of energy
policy.
In the past, many companies considered energy to

be an unavoidable operating expense. However, more
businesses than ever now see energy management as a
commercial opportunity. The corporate world is beginning
to understand that using energy responsibly has a variety
of positive effects on the bottom line. Cost reduction is
one of these advantages, but it’s not the only one.
The world’s energy system is faced with significant

economic, geopolitical, environmental, and social issues.
The energy choices being made now to address these
various issues will have an impact on every region of the
world for decades, if not millennia.
It is crucial for energy policymakers and planners to

imagine and articulate potential energy futures, despite
significant uncertainties in energy demand growth (such
as the pause brought on by the recent financial crisis),
107 Creating an Energy Policy
energy supplies, climate impacts, technological For those who make decisions about various areas
advancements, and shifting economic relationships. of energy management, it is particularly important
to research the characteristics of the energy market
Businesses can strengthen their relationships and the roles played by governments in it.
with external stakeholders, such as investors,
customers, and the neighborhood, by implementing Economics of Electricity Generation and
a strong energy policy that demonstrates their Distribution
dedication to energy management.
Electricity is produced at generating facilities that
Energy Economics and Policy serve a large number of clients in the majority
of developed nations. These power plants,
Energy is a crucial component of a healthy economy often referred to as central station generators,
and is necessary for upholding our contemporary are frequently located far from the point of
way of life. Numerous aspects of our social and consumption.
economic lives are influenced by energy. Providing
equal and ethical access to affordable energy in the Cost plays a significant role in the economics of
future is a significant problem. central station generation. There are fixed and
variable costs associated with central station
In order to address the issue of sustainability, generation, similar to any other industrial method.
energy policies and regulations are developed and The basic costs of power production are relatively
implemented, and both of these processes are simple, but the variable costs are remarkably
heavily influenced by economics. complex.
Concerns about the development and management Fixed costs: Land and capital costs constitute the
of energy resources are becoming more widespread fixed costs of power production. Labor expenses
around the world, such as: and “regulatory costs,” including obtaining site
permissions, environmental approvals, and other
● Controlling the environmental impact of energy factors, impact the capital cost of installing central
use station generators differently in various regions.
● Regulating and expediting the commercialization It is crucial to understand the duration required to
of renewable energy establish central station generation.
● Re-evaluating the safety issues related to nuclear

power
Therefore, there is a need to conduct research on

energy economics and relevant policies to assess
the effectiveness of past initiatives and guide future
progress.

Fixed costs consist of: staff and management.
● Annual charges of the central organization Operating Costs - It covers fuel, labor, and
management maintenance costs for power plants. The overall
operational cost of a plant is based on the amount
● Salaries of the employees (usually higher
of power the plant produces, as opposed to capital
officials)
expenses, which are “fixed” (don’t change with
● Interest on the land costs
the level of output). The “marginal cost” is the
Since each of these expenditures is fixed, the fixed operational expense needed to create each MWh
cost remains constant. of electric energy.
Semi-Fixed Cost: These fees are determined by Operating expenses comprise:

the maximum demand rather than the amount of
energy (in kWh) produced. The semi-fixed costs ● Cost of Fuel: Of course, this price varies depending
increase as the maximum demand increases. on the type of plant. It is lower in thermal (coal-
based) plants compared to nuclear reactors.
Semi-fixed costs consist of: However, this cost is zero for hydroelectric plants
(HPS).
● Interest and depreciation on capital expenses
● Cost of Maintenance and Repairs: As a plant
(investment and insurance) incurred in connection
ages, it experiences wear and tear, necessitating
with the purchase of land, the construction
maintenance. Lubricating oil must be used due
of structures, and the purchase of machinery
to the plant’s deterioration, which incurs a cost.
required for the production, transmission, and
distribution of electricity. ● Salaries of the Operating Staff: The larger the
size (capacity) of the plant, the more personnel
● The plant’s capital expenditure is substantial and
are needed for operation.
is typically financed by loans.
● Other Costs: These include fees for feed water
● The cost of production includes the interest on
(TPS), the cost of treating water (HPS and TPS),
this borrowed sum.
and the cost of enriching fuel (not applicable to
● Depending on the state of the market, this interest all plants, such as NPS).
rate can reach 8%.
● The aforementioned depreciation refers to the

decline in value of regularly utilized equipment.
● Depreciation occurs as a result of wear and tear,

and these expenses are also accounted for in
fixed and semi-fixed charges.
● The size (and cost) of the installation depends on

the maximum demand. The semi-fixed costs will
Figure 13.1: Relative comparison of operating cost and operational
include wages and salaries for both the clerical flexibility for different power plant technologies

For fossil-fired power plants, fuel costs account for power output.
the majority of operating expenses. Fuel is typically
● Ramp Time: The time it takes for a generator
free for renewable energy sources (in rare cases,
to start supplying energy to the grid at its lower
biomass power plants may be an exception), while
operational limit when turned on, expressed in
the fuel costs for nuclear power plants are relatively
[h].
low. Labor and maintenance expenses constitute
● Capacity: The maximum output of a plant,
the majority of total operating costs for these types
measured in [MW].
of power plants.
● Lower Operating Limit (LOL): The minimum
In general, capital and operating expenses for amount of power a plant can produce after being
central station generators must be balanced. Plants turned on, expressed in [MW].
with higher capital expenses typically have lower
● Minimum Run Time: The shortest duration a
operational costs. Additionally, the operational
plant can operate once turned on, measured in
costs of generators that use fossil fuels are often
[h].
highly sensitive to fluctuations in the
● No-Load Cost: The cost in [$/MWh]
underlying fuel price.
of turning on the plant and keeping
it in a “spinning” state to be
Comparing the total costs of
ready for producing power. It
different power plant systems
can also be seen as the fixed
can be challenging due to the
cost of operation, incurred by
apparent tradeoff between
the generator regardless of
capital and operational costs.
energy production.
The “Levelized Cost of Energy” ● Start-up and Shut-down

(LCOE), which represents the Costs: The costs involved
average cost per unit of production in turning the plant on and off,
required for the plant to break even expressed in [$/MWh].
during its operational lifespan, is a common
metric used to compare power plants. The minimum run duration and ramp times, which
vary significantly between plant types and depend
Characteristics Influencing Plant’s Operations on laws, fuel type, and technology, influence the
flexibility of the generation source.
Regardless of technology, all generators share
the following traits, which impact how the facility Generally, base load energy is supplied by plants
operates: with longer minimum run durations and slower
ramp times. On the other hand, plants with shorter
● Ramp Rate: Expressed in [MW/h] or [% of minimum run times and faster ramp times are
capacity per unit time], this variable determines better suited for meeting peak demand. The cost
how quickly the plant can increase or decrease structure for transmission and distribution differs
from power generation, as operating transmission

and distribution wires essentially incur no fuel The way that electricity was acquired and distributed
expenses. Adding more electricity to a transmission changed as physical power systems changed.
line typically has minimal cost implications unless Prior to the introduction of grids connecting
the line is operating at its capacity limit. numerous generators with many consumers,
bilateral agreements between the producer and the
Therefore, capital cost primarily influences user were the norm. However, as grids connected
transmission and distribution economics. more generators with more customers, more
sophisticated organizational structures became
Design of Power Markets necessary to sustain the power system.
It is essential for the power sector to adapt and

evolve as the global energy transition shifts towards
greater use of renewable energy sources such as
wind and solar PV, and increased electrification of
end uses. The current power systems, which were
designed for large, centralized, and easily controlled
power plants, must be redesigned to support the
integration of variable renewable energy sources.
Figure 13.2: Changing power systems
The linked power grid serves as a sizable wholesale Organizational structures within the power system
electricity market in various parts of the world are built around social and political objectives, and
(separate and distinct from the retail, or distribution, they rely on financial, physical, and procurement
network). The flexibility that is required in systems procedures to achieve those objectives while
that use significant amounts of variable renewable staying within the technical bounds of the system.
energy sources, like wind and solar electricity, is not Both in the short and long terms, the way that
necessarily valued by these markets. Additionally, energy and flexibility services are compensated
the near-zero marginal cost of variable renewable reveals important information. Organizational
energy might provide difficulties for market structures transmit the signals that govern how the
structures and result in a lack of generational power system will develop in the future.
revenue necessary to maintain resource adequacy.
A New Model for New Challenges
Electricity was initially produced nearby the source
of demand, which was often an industrial load, Organizational structures for power systems were
when power systems were originally constructed. created using a pattern from the era of fossil fuels
Distribution grids, then transmission grids, and had to be appropriate for both the prevailing
connected metropolitan centers with relatively far- technologies of a centralized energy system and
off power providers as cities became electrified. the objectives of the time. In light of the extensive
The first national grids emerged gradually when electrification of the economy, governments now
meshed networks with numerous generators face a new problem for the power sector: how to
supplying power to diverse loads emerged. quickly integrate renewable energy power plants

while maintaining acceptable system costs and includes developing and testing new methods for
promoting the maximization of both system and capacity planning, grid operations, and demand-
social value. side management, as well as addressing any
operational challenges. Additionally, the aim is to
The majority of implemented energy transition establish viable economic models for the use of
initiatives have not given careful thought to how these technologies.
they would interact with existing power system
organizational structures. They were typically Goal
created to work outside the constraints of the
current power system in order to allow the The goal of renewable energy integration is to
deployment of renewable energy. Misalignments promote system design, planning, and operation of
between the organizational structures of the power the electric grid to:
system, the support mechanisms, and the techno-
economic characteristics of renewable energy ● Lower emissions of carbon dioxide and other air
sources become more obvious as the transition pollutants by using more renewable energy and
moves forward. other clean distributed generation.
● Improve asset utilization

Renewable Energy Integration by integrating distributed systems
with customer loads to decrease
It focuses on integrating
peak demand and, hence, cut
demand response, thermally
electricity bills.
activated technology,
● Encourage the adoption of
distributed generation, energy
renewable portfolio requirements
storage, and renewable energy
for energy efficiency and renewable
into the electric distribution and
sources.
transmission system.
● Improve critical infrastructure
The production of electricity from renewable protection and enhance the resilience of limited
energy sources helps in reducing greenhouse gas parts of the electric grid through the use of
emissions from the power sector and addressing microgrid solutions.
climate change. Renewables are preferable to
● Encourage the use of fewer oil-based products
fossil fuel generators in terms of emissions, but
by allowing plug-in electric vehicle (PHEV)
grid operators face difficulties managing these
operations on the grid.
plants because the amount of power they produce
is dependent on varying natural resources. Process of Integrating Renewable Energy into the
Grid
By taking a holistic approach, efforts are being
made to overcome institutional, technical, and The two main categories of renewable energy
economic barriers to the implementation of generation resources are distributed generation
distributed and renewable energy systems. This and utility-scale generation. The former refers to

small-scale renewables on the distribution grid solar panels, are often found on-site at residences
where electricity loads are served and centralized, or commercial buildings.
while the latter refers to larger projects that connect
to the grid through transmission lines. Distributed resources like these are connected to
the grid through electrical lines on the lower voltage
Utility-Scale Generation: Utility-scale, centralized distribution network, which are the same lines that
renewable energy plants may produce hundreds of deliver electricity to customers, in contrast to large,
megawatts (MW) of power, which is equivalent to centralized renewable energy sources that connect
fossil fuel power plants. Large renewable energy to the grid through high-voltage transmission lines.
sources generate electricity that is sent over
transmission lines, reduced in voltage, and supplied These initiatives frequently take place “behind the
through distribution lines to homes and business meter,” meaning that the electricity is produced
buildings, just like natural gas, coal, and nuclear for on-site use (such as a rooftop solar system
power plants. that supplies a household with power). Instead
of boosting the amount of power available on the
grid, these modest, distributed initiatives often
reduce the demand for electricity at the point of
consumption.
Distributed generation also includes community-

scale renewables, which are bigger than rooftop
projects but smaller than utility-scale installations
and are connected to the grid via distribution lines.
However, community-scale renewables reside “in
On the other hand, renewable energy facilities
front of the meter,” which means that the power
usually cannot be dispatched (or able to create
they produce does not travel to the distribution
power when called upon) as they rely on erratic
grid for consumption by nearby households and
resources like the sun and wind that change
businesses, rather than being used on-site like
throughout the course of a day. But when renewable
small rooftop renewables do.
energy is available, the dispatch order is prioritized
by sources like wind and solar. Because wind and
How Does Renewable Energy Affect the Grid?
solar are the cheapest energy sources at the time
and have no fuel costs, their production is utilized
No matter where the renewable energy generation
before that of other generator types.
is located within the system, it has an impact
on how the grid operator distributes resources.
Distributed Generation: Small home and
Because there is enough demand for electricity,
commercial renewables, on the other hand, typically
the grid will typically be able to consume all the
produce between 5 and 500 kilowatts (kW). Solar
electricity generated by renewable sources. As the
panels, which are easily scalable, make up the
percentage of renewable energy sources on the
majority of these small-scale renewable energy
grid increases, this might happen more frequently.
sources. These dispersed resources, like rooftop

Thus, the amount of electricity required and the Implications for the Grid of the Future
amount of electricity generated by renewables on
the grid are equal, and the remaining amount can be In the upcoming years, it is anticipated that
filled in by other sources. The difference between renewable energy will experience tremendous
the forecasted load, which is the anticipated level of growth, driven by declining costs and supportive
power demand from customers, and the system’s renewable energy legislation. The modern grid will
total renewable energy generation is known as net need a lot of flexibility on both the power supply
load. and demand sides to handle a large penetration of
variable renewable energy.
The net load must be met by utilities, who normally
do so by using conventional fossil-fuel sources like There are numerous strategies to improve the
natural gas plants. As a result, the more renewable integration of renewable resources and grid
energy sources are available on the system, the flexibility:
less power needs to be produced using traditional
fossil-fuel plants. ● To accommodate variations in
renewable power over the course
However, the intermittent nature of a day or several days, energy
of renewable energy sources storage can be used with
can pose challenges for variable renewables. When
grid operators in terms of electricity production is high
anticipating and meeting load (for solar, on bright days; for
as more of them are included wind, when wind speeds are
in the grid. high), it can be stored for use
later when demand is high.
Weather becomes more crucial
● Increasing the value of
for predicting net load as the
renewable resources and lowering
percentage of renewable energy on
uncertainty in their power generation
the grid rises. Due to the unpredictable and
can be achieved by building more transmission
quick changes in weather, grid operators must be
lines to link regions endowed with abundant
adaptable and quick to respond to new conditions
renewable resources (such as extremely sunny or
and production patterns. Failure to do so can result
windy regions) with regions with high electricity
in power outages and shortages.
demand.
● The fluctuation in production of one resource

For example, when the sun sets but the need for
type can be balanced out by combining different
electricity persists, grid operators must promptly
renewable sources. For instance, a system that
adjust to the diminishing solar energy production,
uses multiple renewable energy sources—such
even in predictable weather.
as solar, wind, hydro, and geothermal—will
probably experience less production volatility
than one that uses only wind energy.

● Demand-side management can be strategically As the grid’s share of renewable energy capacity
applied to improve the times of day when rises, the challenges become more critical. To
power is consumed to reflect the capacity of achieve a smooth transition to an electrical
the generation. Demand-side management may grid dominated by renewable energy, improved
involve relocating flexible demand to periods technology, careful planning, and enhanced
of high renewable energy production, such as flexibility are required.
preheating electric hot water heaters or charging
electric vehicles during periods of high solar Environmental Implications of Energy
energy production, and decreasing demand
during peak hours to lessen the slope of the Since it is practically impossible to create, transport,
ramp. or use energy without having a substantial
environmental impact, energy and environmental
● Grid flexibility can be promoted by giving
concerns are intimately intertwined.
generating flexibility value in the wholesale power
markets. For instance, California has made an
Air pollution, climate change, water pollution,
effort to control its “duck curve” by creating a
thermal pollution, and solid waste disposal are
flexible ramping product that rewards generators
some of the environmental issues directly linked to
for their capacity to ramp quickly. Instead of
the production and consumption of energy.
prescribing a predetermined answer, options like
these allow the market to decide how to best
Among the problems, there are:
promote flexibility.
Renewable energy sources facilitate a low-carbon

future, but it is important to consider how their
erratic nature will affect the current grid system.
Grid operators need to be aware of this in order to
correctly balance electricity supply and demand on
the power grid. They need to know:
● How much renewable energy is being generated

at any given moment.
● The primary contributor to urban air pollution is
● How much renewable energy generation is the emission of air pollutants from the burning
expected. of fossil fuels.
● How to respond to changing generation. ● The main cause of greenhouse gas emissions is
also the burning of fossil fuels.
The nature of renewable energy is irregular and
● Energy use is linked to a variety of water pollution
varies in sizes and locations. Therefore, it is
issues, with oil spills being one significant
challenging for grid operators to know about the
concern.
size and location of these sources throughout the
power system. ● There is a limited possibility of oil spilling during

all petroleum handling operations, either on the Most environmental research and legal controls
ground or in a body of water. throughout the 1970s focused on traditional effluent
gas pollutants such as SO2, NOx, CO2, particulates,
● Water pollution is another effect of coal mining.
and CO. Recently, environmental concerns have
Changes in groundwater flow brought on by
expanded to include the regulation of both globally
mining operations frequently expose previously
significant pollutants like CO2 as well as micro-
unpolluted streams to specific mineral
or hazardous air pollutants, which are typically
substances that leach from the soil and result in
toxic chemical substances and damaging in small
acid mine drainage.
amounts.
● Another by-product of several forms of energy
use is solid waste. Large amounts of earth must
Along with improvements in environmental
be removed in addition to coal when mining coal.
research, modifications to industrial structures
and processes have created new environmental
Different types of power generation have different
issues. For instance, significant changes in the
environmental effects on our air, water, and land.
transportation of industrial items by road and in the
More effective generation and use of
use of personal vehicles for individual
energy lower the amount of fuel used
travel have increased road traffic and,
to generate electricity, as well as
as a result, the focus on the causes
the amount of greenhouse gases
and effects of NOx and volatile
and other air pollution that is
organic compound (VOC)
released as a result.
emissions.
Energy and Environmental

Environmental issues cover a
Problems
variety of contaminants, dangers,
and ecological deterioration over
The world has witnessed several
larger geographic areas. Major
significant changes as a result of
environmental accidents, water pollution,
technological advancements. However,
maritime pollution, land use and siting impacts,
it has also sparked the growth of environmental
radiation and radioactivity, solid waste disposal,
issues that endanger both nature and humans.
hazardous air pollutants, ambient air quality, acid
rain, stratospheric ozone depletion, global warming
The threat and reality of environmental degradation
greenhouse effect, and global climatic change are
have grown over the last 20 years. Growing
the main sources of environmental problems.
evidence of environmental issues is the result of
several factors, as human activity’s impact on the
The four main categories of harm caused by human
environment has greatly increased due to the sheer
activity are gases that cause global warming, gases
growth in the global population, consumerism,
that destroy the ozone layer, gaseous pollutants,
industrial activity, etc.
and microbiological risks.

Energy supply and use issues are linked to that the world will warm by 1.7 to 4.9 °C between
environmental issues such as air pollution, acid 1990 and 2100. Such findings, along with others,
rain, ozone depletion, forest loss, and radioactive show that interest in energy-related environmental
material emissions, in addition to the global issues is likely to rise, and that energy is one of the
warming that is occurring as a result of effluent key variables that must be taken into account when
gas emissions, primarily CO2. If humanity is to discussing sustainable development.
have a successful transition to an energy future
with minimal negative environmental effects, these Energy Demand
factors must be taken into account simultaneously.
The term “energy demand” refers to the amount of
There is ample data that indicates the future energy required by human activities. It influences
will suffer if humans continue to damage the the location and types of fuel used in the energy
environment. supply system, as well as the characteristics of
the end-use technologies that consume energy. It
The average temperature of the Atlantic, drives the entire energy system.
Pacific, and Indian oceans, which
cover 72% of the Earth’s surface, When we talk about energy
has risen by 0.06 °C since demand, we are referring to all
1995, while global surface forms of energy consumption,
temperatures have risen over including:
the past century at a rate of
about 0.6 °C per century. The ● Electricity
annual average combined
●Transportation fuels
land and ocean temperature
● Fuels for heating
for the period 1880–2000 is
13.9 °C, which means that in 2001,
Energy Demand Drivers
global temperatures were 0.52 °C
higher than the long-term average.
Policy, technology, and consumer inclinations
all have an impact on how the world consumes
This could result in a sea level rise of 60 mm every
energy. Each driver influences the others, and their
ten years, increasing the likelihood of flooding in
interplay varies based on local conditions such as
low-lying locations. Around 153 nations made the
accessible resources and public support, which
commitment to promote sustainable development
may also change over time.
at the Rio Earth Summit in June 1992. Among the
key objectives was to lower carbon dioxide and
Technology: New technology allows people
other greenhouse gas (GHG) emissions.
to achieve more with less. The most effective
technologies often require enabling governmental
Additionally, the US Department of Energy predicts
and business frameworks to scale up. Measures
that global carbon emissions would rise by 54%
like tax incentives can incentivize the development
above 1990 levels by 2015, increasing the likelihood

of new technology, which then needs to compete machinery.
in the market without assistance to become
widespread and have an impact on global markets. Utility Scale: Utilities are able to regulate storage
Additionally, consumer preferences can have a “pull water heaters, pool pumps, and air conditioners
effect” that drives demand for new technologies. in large areas during peak demand to lessen peak
demand. Ripple control is a popular technology that
Policy: Transparent and consistent government uses high-frequency signals (like 1000 Hz) on top
regulations can encourage innovative technology of regular power (50 or 60 Hz) to turn devices on
and influence consumer choices. For example, and off.
regulations can promote the use of new technology,
such as providing free parking for electric vehicles, Peak demand for the energy network typically
or restrict the use of existing technology, such as happens in the late afternoon to early evening in
implementing limitations on coal-based power. more service-based economies (4 pm to 8 pm). The
It follows that policies that are not supported largest portion of this type of peak demand is made
by cutting-edge technology or do not align with up of residential and commercial consumption.
consumer preferences may be challenging to As a result, it makes perfect sense for utilities
implement. It is difficult to enforce something that (electricity network distributors) to handle air
consumers perceive as inferior to other options. conditioners, pool pumps, and storage water
heaters for residential use.
Consumer Preferences: Consumer decisions play
a significant role in shaping energy demand. As Community Scale: Other terms include district,
better options emerge, such as those offering lower precinct, and neighborhood. In areas with harsh
prices and lower emissions due to new technology, winters, communal central heating systems have
consumer preferences may change accordingly. been around for many years. Similar management
Policies that incentivize certain choices, such as is required for summer peak regions’ peak demand.
a carbon tax that promotes lower-emission energy It is possible to adopt demand-side control at the
sources, can also influence and shift consumer community level to lower peak cooling or heating
preferences over time. demand. Getting a building or community to net
zero energy is another factor.
Demand Side Management
Demand-side management can be broadly divided

into the following four categories: national, utility,
community, and individual household scales.
National Scale: One of the most significant demand-

side control tactics is the enhancement of energy
efficiency. National legislation and standards
can be used to increase efficiency in things like
housing, buildings, appliances, transportation, and

Household Scale: Rooftop photovoltaic systems are variable sources, it becomes more challenging.
are becoming increasingly necessary for homes.
They can lessen their reliance on the grid by using Solutions for energy storage are being developed
the free energy provided by the sun. Demand- by many people and are improving. Demand-side
side management can also be beneficial when response, or more flexible electricity demand, can
a methodical approach is taken into account: also be beneficial. This necessitates a deeper
the functioning of solar energy systems, air comprehension of the timing of energy demand
conditioning, battery energy storage systems, and how it can be changed, either by altering our
storage water heaters, building performance, and energy consumption habits (such as doing laundry
energy efficiency measures. at different times) or locally storing energy (e.g., in
hot water tanks or electric vehicle batteries).
Current Energy System
Some technologies claim to be able to control
The moment of significant transformation in our demand using internet-connected smart gadgets,
current energy system is just getting started. Fossil smart meters, and a smart grid. These technical
fuels must be removed from the energy grid if we changes will need to be accompanied by significant
are to combat the threat of climate change. As a social transformations.
result, energy efficiency will increase, which is a
trend that has to be supported and encouraged. Additionally, we will need to decarbonize the
fuels we use for transportation and heating.
Current trends in electricity generation are Electrification can have a significant impact on this.
encouraging. We are using more renewable energy Electric vehicles and various forms of heating are
sources to generate power as a result of rapidly already in high demand. Complete electrification
lowering costs for wind and solar energy, enabling of heating is improbable, and there are comparable
us to abandon dirty fossil fuels like coal. However, difficulties in transitioning from fossil fuels in
incorporating a significant quantity of renewable shipping, aviation, and many industrial activities.
energy into the power supply is not simple. The Therefore, it is possible that new energy carriers,
constant balancing of electricity supply and demand such as hydrogen, will be required, posing new
is necessary, but because solar and wind energy challenges for the study of energy demand.

Summary
● Energy economics, like many other areas of applied economics, was born out of the recognition that
“energy” is a limited resource. Electric power networks and related industries are evolving as a result of
renewable sources’ expanding contribution to reducing climate change and meeting the world’s energy
needs.
● The approach taken by a specific entity regarding energy development, production, distribution, and
consumption is referred to as its energy policy. Industry professionals, policymakers, and academics must
comprehend these shifts in order to be prepared for future job opportunities in the energy landscape. They
also need to develop specialized and relevant skills to drive this energy transition within the necessary
timeframe.
● Energy use and its environmental impacts are two of the most crucial challenges of the twenty-first century.
The energy industry is poised for significant transformation, presenting considerable opportunities, given
the vital role energy plays in geopolitical connections and the fact that a majority of greenhouse gas
emissions contributing to global climate change originate from energy production.

Unit 14
Energy Efficiency
Policy Objectives, Planning
and Dispute Resolution
By the end of this unit, you will be Energy policy is the government’s response to the current
able to understand: conditions in a particular social sector. The government
● Objectives of energy policy can choose to either maintain the status quo in order to
● Energy efficiency policies and achieve specific societal goals or modify the existing
programs system to ensure the attainment of those goals.
● Dispute resolution in the

Energy policy also recognizes that the events unfolding in
international and national energy
the energy sector are not solely influenced by economic
sector
forces. Governments bear the responsibility of ensuring
that the outcomes in the energy sector align with various
social objectives.
However, in a contemporary society, the energy sector is

interconnected with other areas of activity. Furthermore,
even within the energy sector itself, if there are
externalities present, competition alone is insufficient to
generate efficient outcomes.
Therefore, when developing an energy strategy,

considerations must be given to social fairness, the
environmental implications of energy use, the long-
term sustainability of accessible energy supplies for
society, and concerns about efficiency. Additionally,
aligning energy policy with other policy domains, such
as transportation, the built environment, industry, and
121 taxation, is essential.
Energy Efficiency Policy Objectives, Planning and Dispute Resolution
Governments at all levels increasingly operate their resources for disadvantaged groups
energy policies within an international framework.
● Conservation of resources for energy
The prevailing viewpoint is that of the “global
● Research into energy supply technologies
commons,” where the energy policy decisions made
by one country have positive or negative impacts ● Long-term sustainability of energy sources
on other nations.
When one goal becomes the sole focus, others may
Consequently, national governments are not free be sacrificed. For example:
to independently implement their energy policies.
To achieve both national and international policy ● If national security is the top priority, using coal
objectives, countries must coordinate their energy to transition the transportation sector away
strategies, particularly in light of the issue of from oil might make sense, despite the high
greenhouse gas emissions. environmental and financial costs.
● Prioritizing economic growth can lead to

compromised national security due to oil
dependence and environmental concerns due to
coal and oil emissions.
● Economic development may be limited if

environmental considerations take precedence,
although nuclear power could enhance security.
No single technology, whether new or existing, can

fully meet society’s energy needs; each technology
Objectives of Energy Policy
involves significant trade-offs between different
goals. For instance:
The desired outcomes achieved through the
implementation of energy policy tools are referred
● Large-scale, affordable storage options are
to as energy policy objectives. Various policy goals
currently unavailable, and solar energy is
exist, including:
expensive and intermittent.
● Financial efficiency in energy supply ● Wind power is costly and faces intermittent
challenges similar to solar energy.
● Effective utilization of energy
● Nuclear energy cannot be rapidly expanded due
● Diversification of energy sources
to safety, proliferation, and long-term storage
● Alignment between energy policy goals and other
concerns.
policy objectives, particularly environmental
● Hydroelectricity is not universally accessible,
goals
requires substantial time and funding
● Energy security
for construction, necessitates extensive
● Accessibility and affordability of energy transmission infrastructure, and has negative
122 Energy Efficiency Policy Objectives, Planning and Dispute Resolution

environmental impacts. Economic objectives encompass macroeconomic
progress and economic development. It is valuable
● Biomass has low energy density and adverse
to compare industrialized nations with emerging
environmental effects.
ones. The current status of industrialized nations
Meeting the vast global energy demand requires a can be partially attributed to the accessibility
combination of new and established technologies. of inexpensive energy, although some of this
However, determining the optimal integration of perceived “low” cost comes at the expense of the
different technologies and allocating resources environment and raised security concerns.
between current and future technology research

Furthermore, there is an increasing realization that
and development remains uncertain. Over time,
sustaining economic growth requires the protection
it becomes crucial to compare the expected
and enhancement of natural resources. Conversely,
performance of different portfolios of alternative
developing nations and their populations are
energy technologies.
striving to attain a comparable economic status
Linking Scenarios to Energy Policy and Planning with growth rates twice as high as those of wealthy
Objectives nations.
Despite the existence of numerous goals Geopolitical energy challenges encompass a range
associated with energy planning and policy, they of factors, including terrorism, nuclear proliferation,
can be categorized into four main areas: and global and national energy security. The
primary objective of energy security is to ensure an
adequate and reliable energy supply at fair rates,
while safeguarding essential national values and
Economic
objectives. The International Energy Agency defines
energy security as “access to adequate, cheap, and
reliable energy supply.”
Geopolitical
While energy security is the central focus, its meaning

can vary depending on the dynamic political,
economic, and social environment. It is not solely
Environment
limited to oil and geopolitics. The geographical
placement of large-scale hydropower plants or
Public fossil fuel reserves can impact energy security in

Acceptability various ways. Oil, in particular, is concentrated in
a limited number of nations, enabling suppliers to
Figure 14.1: Energy Policy and Planning Acceptability exert partial dominance over the global oil market.
While different fuels and energy carriers, including
electricity, are considered in de
There are other energy security issues besides oil.

Compared to oil, natural gas resources are more consequences of strip mining coal. Additionally,
scattered, but they also pose significant security there are global impacts, such as the production
threats. Natural gas is susceptible to risks of of greenhouse gases (GHGs). This category also
interruption due to the high cost of long-distance encompasses the harms caused by energy-related
delivery, especially over oceans. In contrast, accidents and mishaps.
coal is more evenly distributed worldwide and
has abundant supplies in proximity to densely Public acceptability is a multifaceted aspect that
populated areas. encompasses both procedural and substantive
elements. In the realm of energy policy and
When it comes to electricity, understanding planning, it is imperative to involve the public in the
energy security in terms of reliability rather than development and implementation of major energy
just security is crucial. To encompass concerns policies and programs, particularly in democratic
of proliferation and terrorism, which may not be societies.
directly tied to energy sources but rather to the
exploitation of energy infrastructure for violent Public engagement and input are crucial not
purposes, the concepts of energy security only for the democratic process itself but
and energy vulnerability need to be also indirectly through mechanisms
expanded. like elections. Additionally, direct
stakeholder processes are
Nuclear proliferation is another often employed to ensure
significant security concern, comprehensive involvement. In
which can occur either through contrast, even in nondemocratic
direct acquisition of nuclear governments, energy subsidies
weapons or indirectly through the are frequently utilized as these
commercial generation of power governments rely on popular
using nuclear energy. support for their policies and objectives,
prioritizing public acceptance over official
Environmental concern is a critical objective of channels like elections.
energy policy and planning, involving the addressing
of various environmental issues associated with Under each of the four main headings of economic,
ecological and human health impacts. These geopolitical, environmental, and public acceptance,
issues encompass GHG emissions, air pollutants, there are several sub-objectives. In certain cases,
water impacts, toxic materials, safety, and long- these sub-objectives are utilized to further other
term sustainability. goals rather than serving as ends in themselves.
The four main objectives can also be categorized
Energy production and utilization have a wide within these respective categories.
range of environmental effects that extend across
different geographical areas and timeframes. Some Reducing greenhouse gas (GHG) emissions not
effects are regional in nature, such as acid rain, only serves as a means of achieving the final goals
while others are localized, like the environmental of economic prosperity and human health but also

contributes to their attainment. Various indicators Energy Efficiency Policies and Program
may be used for different objectives and sub- Examples
objectives, further complicating the situation.
Projects aimed at reducing energy use are
With the presence of numerous objectives, two implemented with the assistance of energy
issues arise. efficiency policies and initiatives. Examples of
these include energy regulations for buildings,
Firstly, it is necessary to identify and design each commissioning and retro-commissioning practices,
aim, sub-objective, and their relationships, which financial incentives and initiatives, government
poses a significant semantics challenge due to programs that serve as examples, and others.
different individuals, organizations, and countries
using various terms to refer to the same goals. Some specific examples of these initiatives include:
Secondly, developing a shared taxonomy of aims Appliance Standards: The federal government
requires more than just consensus on terminology, and some states have set minimum efficiency
as the description of an objective requirements for certain appliances
is influenced by how individuals such as refrigerators and washing
value it. This leads to the second machines. These standards may
issue, where nations, groups, specify specific features or
and individuals have diverse devices that a product must
preferences for the multitude have or establish a maximum
of goals. allowable energy usage.
Alternatively, regulations may
The underlying objectives and require products to meet a certain
supporting sub-objectives are average efficiency across all models,
rooted in fundamental arguments allowing for a mix of less and more
about how people should live their lives, efficient variants.
which are partially encapsulated by the concept of
sustainability. Building Codes: Some commercial and/or
residential building regulations mandate that
Consequently, many believe that the energy future new construction and renovations meet certain
entails more than just optimizing a set of objectives. energy performance standards in terms of design,
It also involves living in a manner that achieves materials, and equipment used. Local governments
broader social, cultural, and political outcomes that may adopt stricter rules than the statewide
are challenging to encapsulate within a simple set minimum if the existing energy performance
of objectives. requirements are deemed insufficient or lax.
Commissioning and Retro-Commissioning:

Implementing a commissioning program
throughout all phases of a building, including

design, construction, and operations, ensures Education and Behavior Modification: This is an
that the building’s systems are properly installed essential component of efforts undertaken by the
and functioning correctly. Similarly, retro- government to promote a more energy-efficient
commissioning methods can identify and improve society. It creates awareness and educates
the energy performance of equipment and control state and local government employees and their
systems in existing buildings. constituents about changing behaviors in favor
of conserving energy and adopting more energy-
State and municipal governments have the authority efficient practices.
to develop programs and laws that incentivize or
require retro-commissioning in privately owned Energy Benchmarking and Disclosure: It is a
buildings, as well as incorporate it as part of energy market-based policy instrument used to generate
efficiency initiatives for their own facilities. demand for energy efficiency improvements
by raising awareness and transparency among
Decoupling and Utility Business Models: Energy key stakeholders regarding building energy
efficiency initiatives can lead to reduced energy use, performance. These upgrades can be implemented
which may conflict with a utility’s business model through required regulations for buildings in the
of generating more revenue by driving increased private and/or public sectors or through voluntary
energy demand. programs.
Decoupling is a rate adjustment method that This policy tool aims to overcome obstacles
disconnects the quantity of energy sold by a utility that hinder the recognition and appreciation of
from the revenue it receives in order to cover fixed energy efficiency in existing structures within the
costs associated with serving consumers. This commercial real estate industry and government
ensures a fair return on investment for the utility organizations.
and a fair tariff for the consumer by maintaining
the company’s revenue from fixed costs at a level Energy Efficiency Resource Standards: Energy
deemed fair and reasonable by regulators. efficiency resource standards (EERS) require
an energy supplier or authority to establish a
measurable energy efficiency objective within a
predetermined timeframe. These requirements
may promote more efficient energy production or
usage, include demand management programs,
and can be combined with a state’s renewable
portfolio standard.
Financial Incentives and Programs: State and local

financial incentives and programs assist building
owners in implementing energy efficiency projects
through public benefits funds, grants, loans, clean
energy financing based on property assessments,

as well as personal, corporate, property, and sales variety of end users.
tax incentives. Additionally, these programs may
provide assistance in reducing or eliminating Zoning and Permitting: Local governments
permitting fees. frequently regulate zoning and permitting, which
may be relevant to both residential and commercial
Lead-By-Example: properties. However, the state may control the
scope of regional zoning rules.
By implementing measures such as data
management and analysis of energy usage, For instance, several states have implemented
implementing energy-efficient building standards legislation that makes it more difficult for local
for public buildings, retrofitting existing structures, governments to obstruct or impose unreasonable
procuring energy-efficient equipment and restrictions on the installation and use of
appliances, and establishing procedures for renewable energy systems. Zoning regulations
energy efficiency maintenance, state and local may be established to support energy-efficient
governments can serve as a model for construction. Buildings that achieve
other government entities. specific energy efficiency standards,
for instance, may receive floor
Industry Outreach and area ratio bonuses.
Coalitions: Engaging the
industrial sector in energy Dispute Resolution
efficiency initiatives can in the International
help governments meet their Energy Sector
energy reduction targets.
Programs for industry outreach The global petroleum industry
may encourage and promote makes investments in lengthy,
the implementation of energy- complicated, and capital-intensive
efficiency policies at businesses, projects. The governments and parties
as well as the use of energy-efficient involved in these projects constantly change,
technologies in the manufacturing process and which frequently results in disputes.
finished items.
Another significant global investor is the petroleum
Strategic Energy Management and Continuous industry. Consequently, the global portfolio of
Improvement: An effective strategic energy international commercial and state investment
management strategy sets objectives, monitors conflicts involving building projects is dominated
progress, and communicates outcomes while by the global energy sector.
fostering enduring relationships with energy
consumers and focusing on long-term energy Therefore, disputes pose a serious risk to any global
savings. Effective planning guarantees ongoing energy effort. The risk lies in how successfully a
energy efficiency improvements, boosts building party can handle a conflict to achieve a favorable
property values, and can save expenses for a outcome, rather than whether a dispute would arise

in a project. well as how to include those procedures in their
agreements.
Planning for Disputes
Types of Disputes in the Global Oil and Gas Industry
Any transaction has numerous crucial turning
points where parties can have a significant impact In the worldwide oil and gas industry, disagreements
on how their conflicts are handled and resolved in typically fall into one of four categories. These are:
the end. These pivotal moments are:
State versus State Disputes: The majority of these
● When parties first reach an agreement and border conflicts involve oil and gas reserves that
include a dispute resolution clause in it span international boundaries and are situated in
marine areas. Since only governments have the
● When parties choose their conflict attorneys,
authority to assert sovereign title and negotiate
arbitrators, mediators, or other dispute resolution
boundaries with neighboring states, they are, strictly
facilitators after engaging in a real dispute
speaking, the only parties involved. However, oil and
To maximize their potential gains and gas corporations become unintentionally
reduce their potential losses, parties entangled in these conflicts when they
must prepare and implement their are given concessions that cross
dispute resolution strategy at contested boundary lines.
these critical junctures.

Sometimes, developing
The dispute resolution clause countries require businesses
should not be an afterthought. to pay for the costs of the
It is a crucial provision in any boundary dispute, as well as to
international agreement as it contribute information and legal
determines how the deal will be know-how to help settle it. Therefore,
interpreted, put into practice, and upheld businesses must be aware of these
in the end. disputes and have the skills necessary to handle

them effectively when they arise.
International energy projects have a significant risk
of having a dispute submitted for settlement in a Company Versus State Disputes: State investment
hostile forum under unfavorable legislation and conflicts or investor-state disputes are common
procedures, unlike domestic operations. names for them. They occur when governments
nationalize or expropriate an investment or when
The parties must agree on who will decide the they materially alter the terms of the original
dispute, where it will be resolved, and how. In agreement. The investor may rely on an investment
many developing nations where oil and gas firms treaty, a production sharing contract (PSC), a
invest, local courts are typically excluded from that. risk service agreement (RSA), or perhaps both to
Therefore, businesses must carefully consider how support their claim.
they want any future disputes to be resolved, as

Bilateral investment treaties (BITs), which
are negotiated and ratified by two sovereign
governments, are where the majority of treaty
claims are made. Currently, there are more than
2,500 BITs in force worldwide, involving about
180 different nations. The Energy Charter Treaty
is the only multilateral investment agreement that
matters to the oil and gas sector.
Businesses should structure their investments and

negotiate their host government contracts in a way
that allows them to benefit from the investment
Conflicts between operators and service providers
protection offered by these treaties and gain
fall under the second classification, which includes:
access to the resources of the International Centre
for the Settlement of Investment Disputes (ICSID),
● Drilling and Well Service Agreements
which should be the preferred forum for any dispute
with a sovereign state. This is typically achieved by ● Seismic Contracts
having their investing company incorporated in a ● Construction Contracts

jurisdiction with a strong BIT with the host country,
● Equipment and Facilities Contracts
operating their business out of that
● Transportation and Processing Contracts
Company versus company disputes: International

These disputes predominate among oil and gas
commercial disputes are the common name for
firms and vary widely in size, complexity, and
this. There are two types of disagreements that
financial importance.
take place between energy businesses.
Individual Versus Company Disputes: People

Participants in joint ventures under agreements
file claims against oil and gas firms in various
like these fall under the first subcategory, which
circumstances.
includes:
The first occurs when a person is personally injured

● Joint Operating Agreements
and files a lawsuit against a business. While this
● Unitization Agreements
frequently happens in US jurisdictions, it also
● Farmout Agreements occurs more frequently abroad. Foreign claims
● Area of Mutual Interest Agreements are typically brought in local courts, although the
Alien Tort Statute occasionally permits filings in US
● Study and Bid Agreements
courts as well.
● Sale and Purchase Agreements
● Confidentiality Agreements Secondly, proponents of oil and gas deals sometimes

claim they have a stake in a host government

contract and the joint operating agreement that recognized as a step in a multi-stage dispute
accompanies it, often within the context of a third settlement procedure. If so, the agreement must
party’s claim of tortious interference. specify in detail when each phase is to be completed
and by when. Otherwise, not completing a stage
The last set of claims involves consultants or can be a barrier to completing a binding procedure.
agents who request payment in accordance with
their agent agreements for assisting a business Negotiation is the most economically feasible
in securing a government contract. In a number technique of conflict settlement and the least
of arbitrations over the past 50 years, companies expensive overall. However, to avoid unfavorable
have refused to pay their agents due to corruption feelings and firmly held beliefs that prevent a
charges that arose after winning the contract with resolution, the parties must work together fully and
the host government. act with a great level of objectivity and detachment.
Various Techniques for Resolving Disputes Mediation: For mediation to be successful, all
parties must be prepared and dedicated
In their international agreements, to the process, have representatives
parties may adopt a variety of present, and have an experienced
dispute resolution procedures, mediator. When these
and they are able to combine conditions are met, mediation
one or more of them. can be a very successful and
Depending on the situation, effective conflict resolution
certain options are better method.
than others.
The main concern in mediation
Whatever option the parties is the real interests of the parties
decide on, they must carefully instead of their legal agreements.
construct their dispute resolution clause Common law nations including the
to ensure that the various options complement US, England, Canada, and Australia regularly use
one another. Otherwise, a party may face unpleasant mediation domestically. Civil law jurisdictions are
surprises when the conflict arises. starting to experience its steady spread.
Negotiation, mediation, expert determination, In the business community, mediation is the

dispute review boards, litigation, and arbitration are preferred alternative to litigation and arbitration for
a few of the different forms of dispute resolution the resolution of disputes. It is largely preferred over
techniques. alternative ADR techniques in various jurisdictions.
Mediation has a higher success rate of settlement
Negotiation: When there is a conflict, parties than arbitration and is quicker and less expensive.
typically engage in negotiation as a matter of
course. An agreement may or may not include a Despite its benefits, mediation is still not widely
clause allowing for discussion. It could be formally utilized in international disputes. Factors

contributing to this include the parties’ great foreign jurisdictions, the expense and length of
distance from one another, their unfamiliarity with trials, and foreign investors’ distrust of local courts.
the process, and the cultures, languages, and As a result, international oil and gas agreements
values of each party. rarely choose litigation as a dispute resolution
method.
Expert Determination: The most common
instances of expert determination in oil and gas Arbitration: In the global energy industry, arbitration
litigation include economic appraisals or technical is the most frequently accepted and utilized form of
judgments. The conclusion of an expert is only dispute settlement. It is a legally binding procedure
upheld in international court systems as a contract that gives parties the maximum freedom in how
between the parties and not as an arbitration result. they choose to settle their disagreement.
The parties would have to agree to it in writing.
Arbitration offers benefits such as the ability for
Expert determination is quite helpful and feasible parties to select their arbitrators and determine the
in highly technical situations, but not in the case of type.
disputes. International disputes do not
frequently employ it, and when they do, Dispute Resolution in Energy
it should only be used on specific Sector at National Level
technical grounds.
India is a nation that offers
Dispute Review Board: This excellent prospects in all
concept originated from forthcoming industries for
US construction companies, the development of the nation.
and as it gained popularity, India has developed an amazing
construction firms from other reputation in the energy sector
countries began to adopt it. A thanks to a huge number of projects
dispute review board consists of three and initiatives being carried out across
members appointed for the term of a the nation.
specific project. Even though numerous institutions
offer help and services in this field, this approach is The dispute settlement methods in India are similar
still not well-known in the energy business. to those in other nations, but the government is
attempting to select a method that can settle
Litigation: Courtroom litigation is the method disputes in a fast manner. As a result, in July
of dispute resolution that lawyers are most 2019, the Indian government decided to create a
accustomed to using. It is most commonly used committee, and the Ministry of New and Renewable
when partners from the same jurisdiction are Energy (MNRE) issued an order to set up a Dispute
involved in domestic energy commerce. However, it Resolution Mechanism (DRM) to handle unforeseen
is not the preferred forum for international disputes disputes between solar or wind power developers
due to difficulties in enforcing court rulings in and consumers.

The various dispute resolution techniques utilized in India include arbitration, mediation, negotiation, litigation,
and expert determination. All of them have shown to be successful and effective in India.
Summary
● One of the most important issues for the future is energy. Businesses must strike a balance between
operational effectiveness and sustainable development.
● Finding energy efficiency across the board, from planning to production to operations, makes good financial
sense in light of rising energy prices and the growing scarcity of natural resources.
● Increasing energy efficiency is one strategy to lower energy costs by maximizing the use of already-
existing resources and strategically planning investments in new technologies. This not only better serves
customers and manages operating costs but also has a positive influence on the environment and reduces
risk.

Unit 15
National Energy Policy
By the end of this unit, you will be Energy is essential for achieving numerous goals of
able to understand: the Indian government, including reducing severe levels
● Green energy policy initiatives of outdoor and indoor air pollution, mitigating climate
for large-scale de-carbonization change, ensuring that everyone has access to clean,
in India modern energy, and recovering economically from
● Mapping India’s energy COVID-19.
policy towards net zero

For the federal and state governments, energy is a
emissions
significant source of revenue. The predicted INR 699,565
● Draft Electricity Rules, 2021
crore (USD 94 billion) total energy revenue for the center,
to push green energy use in
states, and UTs in FY 2020 is almost 17% of all government
industries
revenue. Oil and gas account for 83% of energy earnings,
with just two taxes accounting for the majority of this
income:
● The central fuel excise
● State-level VAT
Additionally, the combined contribution of coal and

electricity is 16%, and the contribution of renewables is
less than 1%.
The proportion of profits generated by fossil fuels will

decline as the energy transition proceeds, necessitating
133 National Energy Policy

initiatives to diversify revenue streams. Energy capacity by 2030 was again reiterated. This is an
costs should be fully reflected in energy pricing for increase from the non-fossil capacity of 159 GW in
optimal economic efficiency, delivering signals that February 2022.
affect consumers and producers.
We need to:
Support has an impact on the rate of development
of the energy sector. It can take many different ● Continue the socially responsible phase-out of
forms, such as: support for fossil fuels in order to align support
with 2030 targets and net-zero.
● Subsidies
● Introduce fresh assistance as required to achieve
● The investments made by state-owned energy renewable energy goals and guarantee a fair
companies (or public sector undertakings transition.
[PSUs])
● Create a body including appropriate ministries,
● The lending provided by public financial departments, and expert organizations to
institutions (PFIs) coordinate actions regarding support,
taxation, and price for energy.
An equitable transition can be
achieved by compensating As the government develops
disadvantaged people, more comprehensive net-zero
encouraging producers policy frameworks, it should
to invest in dependable, expressly state the role that
clean energy, and assisting taxation plays in establishing
consumers in gaining access accurate and dependable
to affordable energy. However, carbon pricing, as well as the
poorly planned support can social protection required to
impede progress and unduly expose reroute funds to the underprivileged
public institutions to the risk of stranded and disadvantaged.
assets, especially when it is supporting fossil fuels
that are becoming less and less competitive. Green Energy Policy Initiatives for
Large-Scale De-carbonization in
Today, as the nation considers a new investment India
paradigm, it is necessary to take into account the
synergy between social security programs and the India has set a goal of becoming net-zero by 2070 in
use of clean energy. recognition of the need to address climate change.
Along with the overarching objective for 2070, the
At the 2021 Paris Climate Accord discussions, nation has also established the following goals for
the government of India declared to achieve net- 2030:
zero greenhouse gas emissions by the year 2070.
The goal of installing 500 GW of non-fossil power ● Use renewable energy sources to meet 50% of

your energy needs. independence.
● Achieve a 500 GW non-fossil fuel capacity.

Energy Independence: India’s economy is
● Cut down on 1 billion tonnes of carbon emissions.
vulnerable to fluctuations in international energy
● Reduce carbon intensity by 45%. costs because it imports the majority of the primary
energy it needs. Through programs like production-
The government’s commitment is demonstrated by linked incentives (PLI) in goods other than solar
major policy efforts like the green hydrogen policy, panels and advanced chemistry cell (ACC) batteries,
the offshore wind policy, the promotion of electric the government needs to think about developing
vehicles, the creation of a green day-ahead market, local capabilities across the clean energy value
and the lowering of conditions for open access to chain.
purchase green energy.
Innovation: India’s objective of going net-
Despite the push, India now relies mostly on coal zero presents both financial and technological
and crude oil for its energy needs. To replace these difficulties. Based on technical decisions, a
with clean energy sources, large investments would number of viable routes exist to assist the nation
be necessary. in achieving its net-zero aim. But further cost-
effective developments are needed for widespread
India’s economy is anticipated to grow at one of the commercial utilization. Policies should establish
fastest rates worldwide. India would need 3.5 trillion the proper incentives for innovation rather than
units (TUs) of energy by 2036–2037 to support a forecasting the future or focusing on a select few
7.3% economic growth rate, as opposed to 1.37 technologies and power sources.
TUs in 2021–2024, according to estimations from
the Central Electricity Authority (CEA).
Consequently, having access to affordable,

dependable energy would be a requirement in order
to guarantee India’s high rates of economic growth.
Policy Considerations for De-Carbonization
There are many options for pursuing India’s 2070

net-zero objective without compromising on
Creating Markets: India-specific carbon markets
significant economic growth. Renewable energy
will motivate the adoption of green technology
sources like wind and solar must be supplemented
and energy. The majority of companies currently
with other energy sources like gas and supported
use the open access model, which involves buying
by storage devices due to their variability and lack
green energy directly. The grid might become more
of 24-hour energy availability. As a result, policies
complicated if these strategies are widely used.
to reduce carbon emissions must follow the
Policies that encourage decarbonization and handle
criteria of dependability, affordability, and energy
the complex needs of the energy system through
market-based prices are the need of the hour, along be operated as part of generating, transmission,
with policy initiatives like green open access. and distribution or as standalone energy projects
has been outlined by the Ministry of Power.
Mobilizing investment: India would require a sizable
● Hasten the environmental approval process so
amount of cash as it moves toward net-zero. By
that viable pumped-storage hydropower (PSH)
2070, the current projections indicate a significant
projects can be implemented. Separate guidance
investment of roughly US$10.1 trillion. Even though
for PSH projects by the Ministry of Environment
the projections could change, authorities still need
and Forest and Climate Change will be helpful.
to think about how to raise the necessary funds.
● Use more of the current natural gas-based power
Strategies to Ensure Large-Scale De-carbonization generation capacity and take advantage of
in India natural gas’ flexibility in energy delivery and low

carbon footprint.
Any choice should adhere to two requirements: ● Encourage the use of green hydrogen by using
demand-side policies and incentives to reduce
● One, there is a critical need for costs, such as production-linked
government energy delivery policies incentives for electrolyzers, while
to be technology-neutral. keeping in mind that the switch
● Second, it must continue to from blue/grey to green hydrogen
encourage the creation and might take place in the future.
execution of green energy ● Establishing
initiatives. standards for smart grids
will aid in their implementation.
The following tactics are desired Develop mechanisms that permit
for India’s extensive decarbonization cost-sharing between consumers,
program: power producers, discoms, and
state governments while focusing on
● Increase the production of renewable energy expanding the capacity of discoms.
sources, such as offshore wind farms, supported
● Take steps to make the electrical grid a more
by machinery made in-country under various
decentralized system that can move electricity in
production-linked programs. Policies should aim
both directions rather than a centralized one-way
to reduce the amount of embodied carbon in the
carrier.
equipment while creating incentives.
● By creating carbon markets and streamlining
● Develop carbon capture technology for utilizing
green open access, encourage large commercial
coal-based energy, which is the country’s main
and industrial energy consumers to pursue
domestic source of energy and the largest.
decarbonization activities.
● Promote innovative and effective storage
● Encourage green financing by creating a
solutions to make it easier to use renewable
framework for financing the investments and a
energy. The usage of energy storage systems to
uniform green taxonomy.
Mapping India’s Energy Policy Towards transparency, generates accountability, and
Net Zero Emissions encourages a responsible transition in support
away from fossil fuels and toward clean energy by
India intends to achieve net-zero emissions by taking a look at how the Government of India has
2070 and to meet 50% of its electricity needs from funded various sources of energy from FY 2014 to
renewable sources by 2030. This is a turning point FY 2021.
in the global effort to fight climate change. India is
setting the bar for a fresh approach to economic India is in the third position globally for annual
growth that could: CO2 emissions due to the significant increase
in the country’s use of fossil fuels. However, the
● Steer clear of the carbon-intensive strategies emissions per person in India are the lowest in the
that several nations have already used. world. The same is true for energy use: the typical
Indian household uses ten times less electricity
● Offer a model for other emerging economies.
than the typical American household.
The extent of the change in India is

India’s energy demand is forecasted
amazing. Over the past two decades,
to grow significantly in the coming
the country has witnessed
decades as a result of its large
significant economic
population and vast potential
development. The urban
for economic development.
population is rapidly growing
In order to achieve the goal
in the country. Therefore,
of net-zero emissions by
there is a significant need
2070, a significant portion of
for extensive development of
this increased energy demand
new structures, industry, and
must be met through low-carbon
transportation systems.
sources in the current decade.
Up until now, coal and oil have played an

Therefore, it is understandable that Prime
important role in India’s economic development and
Minister Narendra Modi will propose more
modernization. These resources have supported
challenging goals for 2030, such as:
many Indians with access to contemporary energy
services. For the previous ten years, this has
● Installing 500 gigawatts of renewable energy
included adding new energy connections for 50
capacity
million people annually.
● Reducing the emissions intensity of its economy
The government’s energy income and carefully by 45%
crafted energy support measures—subsidies, ● Reducing a billion tonnes of CO2
investments by public utilities, financing by public
finance institutions—play a critical role in India’s There is no doubt that these goals are difficult to
transition to clean energy and reaching net- achieve, but the shift to renewable energy in India
zero emissions by 2070. The policy facilitates
is now well underway. The country has already met ● As the third-largest energy importer in the world,
40% of its power capacity from non-fossil fuels, tight markets are raising concerns about energy
and the share of solar and wind in India’s energy security.
mix has increased enormously. It has exceeded its
● Many users lack sufficient access to dependable
commitment made at COP 21- Paris Summit.
electricity.
● The continued use of traditional fuels for

India has made significant progress in reducing
cooking endangers the health of many people
the costs of solar power through technological
unnecessarily.
advancements, supportive government policies,
and a robust private sector. As a result, the cost of ● Financially struggling electricity distribution
building solar power facilities is now cheaper than companies are hindering the urgent
that of coal-fired power plants. India is leading the modernization of the sector.
way in renewable energy with the largest market
● Due to heavy pollution, Indian cities now have
and the fastest growth rate, and it is projected that
some of the worst air quality in the world.
new additions to solar capacity will triple by 2026.
● Policy measures in place.
The nation aims to expand the use of contemporary

If fully implemented, existing policies in India could
bio-energy throughout the economy and is one
accelerate the shift towards cleaner and more
of the largest producers of this type of energy in
efficient technology and address some of the
the world. India is predicted to surpass China and
challenges.
Canada in the coming years to overtake the United
States and Brazil as the third-largest ethanol market
● In the early 2010s, subsidies for gasoline and
globally.
diesel were eliminated, and in 2019, incentives
for electric vehicles were established.
● India’s effective program for energy efficiency

has been successful in cutting back on energy
use and emissions from major industries,
transportation, and buildings.
● Government initiatives to supply fuel gas to

millions of homes for heating and cooking are
enabling a steady shift away from the use of
conventional biomass, such as burning wood.
Challenges
● India is also setting the stage for the expansion of
● The country aims towards net zero, and therefore, significant emerging technologies like hydrogen,
it must overcome a number of urgent short-term battery storage, low-carbon steel, cement, and
obstacles. fertilizers.
● Due to the substantial rise in commodity costs,

energy is now more expensive.

Transition to Clean Energy and by 2050, it will have prevented 400 million
tonnes of CO2 emissions.
A move towards clean energy is a significant
economic opportunity. India can ideally lead in India is a developing economy with a population
green hydrogen and renewable batteries around of over 1.3 billion. Therefore, the objectives for
the globe. By 2030, India may have a market for climate adaptation and mitigation will support not
low-carbon technologies valued at up to $80 billion. just India, but the entire world. In order to help India
develop, industrialize, and improve the quality of life
India needs the support of the international for its population without carbonization, NITI Aayog
community to shift its development onto a low- and the IEA have committed to working together.
carbon trajectory. According to the IEA, the Indian
energy industry will require, on average, $160 billion Recommendations
annually between now and 2030 to reach net-zero
emissions by 2070. That is three times the level of ● Coordinate assistance with 2030 goals and net-
investment made today. zero.
● Continue the socially appropriate

To achieve net zero, access to low-
phasing out of fossil fuel support.
cost, long-term capital is essential.
● Introduce fresh assistance
In this case, achieving net
as required to achieve renewable
zero involves more than just
energy goals and guarantee a
reducing greenhouse gas
fair transition.
emissions. India’s need for an
energy transition is: ● Create a body including
appropriate ministries,
● For the benefit of its people departments, and expert
organizations to coordinate initiatives
● Effective policies that reduce the
related to energy support, taxation, and
likelihood of sacrificing cost, security,
pricing.
or sustainability.
Shift Subsidies
The role of green hydrogen: It will be crucial in
achieving net zero and decarbonizing industries
● Create a National Electricity Council to serve
with the highest carbon emissions. India wants
as a forum for discussing matters related to
to become a leading producer and exporter of
the power sector and grant it the authority
environmentally friendly hydrogen.
to facilitate discussions between the federal
government and the states regarding the reform
India could easily replace grey hydrogen in refineries
of electricity subsidies. This includes directing
and the fertilizer industry by creating a 5 million-ton
subsidies towards low-income consumers
green hydrogen demand. As a result, 28 million
and exchanging subsidies for environmentally
tonnes of CO2 will be reduced. This percentage will
friendly agricultural methods.
increase as the green hydrogen economy prospers,
● Ensure that any LPG subsidies are targeted and fuels.
linked to funding for the development of non-
fossil cooking technology. Use Taxation Strategically
● Develop a plan and schedule for responsibly

● During a time of rising fossil fuel prices, it is
reforming coal subsidies, such as shifting
advisable to allocate significant funds for two
subsidies from the input (coal) to the output
purposes: improving social safety nets and public
(affordable electricity service).
services to reduce living expenses, and providing
● Determine the level of assistance required to public support for clean energy, including an
achieve sustainable energy goals, especially for equitable transition, to reduce volatility and
new and emerging technologies, and provide it. enhance security in the medium term.
● As the government develops more comprehensive

Diversify PSUs
net-zero policy frameworks, it should clearly
articulate the role of taxation in establishing
● Ministries should compel energy PSUs to
accurate and consistent carbon pricing,
diversify into renewable energy
as well as the social protection
and amend CSR policies to
measures necessary to redirect
specifically encourage
funds to the underprivileged
support for sustainability
and disadvantaged.
and a just transition.
● Public utility companies

Improve Transparency –
should increase their
investments in sustainable
●To facilitate more
energy while creating net- coordinated decision-making,
zero roadmaps for the phase- ministries, departments, PSUs,
out of fossil fuels. and PFIs should improve reporting
on support for energy.
Shift Public Finance
Draft Electricity Rules, 2021 to Push

● Ministries should enhance lending targets for the
Green Energy use in Industries
renewable energy sector in accordance with the

stated policy objectives.
● To reduce the current high levels of exposure to India has come up with a new set of regulations
fossil assets, PFIs (Public Financial Institutions) called the “Draft Electricity (Supporting Renewable
in India should promptly cease new primary Energy through Green Energy Open Access)
public financing for coal thermal power or Rules, 2021.” This will support the purchase and
mining, except for decommissioning and a just consumption of green energy, including electricity
transition. PFIs should also develop a strategy from waste-to-energy plants. The proposed
for managing potential stranded assets and regulations aim to encourage a quicker uptake
gradually phase out public financing for fossil of renewable energy by addressing a number of
issues surrounding the green energy industry. The Energy Federation of India (NSEFI), the umbrella
Union Power Ministry has posted the regulations organization for all solar energy players in India.
online and requested feedback from all interested If properly implemented, they will offer crucial
parties. assistance for the expansion of renewable
energy to meet the 2030 target.
● According to the proposed regulations, green
energy is defined as electrical energy produced India has surpassed the 100 GW threshold and has
from renewable sources for customers, including set a goal of installing 175 GW of renewable energy
businesses with loads of 100 kW (kilowatts) or by the year 2022. India ranks fifth in the world in
more. terms of installed solar capacity, but we are still
falling behind when it comes to corporate solar
● The proposed rules state that all obligated
(or renewable energy) buying. A paradigm change
businesses, including distribution licensees,
in India’s private renewable energy purchase could
open access customers, and captive power
result from the provisions in this draft, which would
consumers, would be subject to a single
also benefit MSMEs’ customers.
Renewable Purchase Obligation (RPO). The RPO
is a system established by the Electricity Act
of 2003 that requires large users to acquire a
specific proportion of their total electricity needs
from renewable energy sources.
● According to the draft regulations, “any entity

(whether required or not) may elect to purchase
and consume renewable energy as per their
requirements,” whether it be through in-house
production of renewable energy, open access
to renewable energy from any developer, the
The guidelines also state that there would be no
purchase of renewable energy certificates, or the
cap on the number of power plants that might be
purchase of green hydrogen.
installed using renewable energy sources, but the
● The proposed regulations also state that the electricity they produce must be used by them
appropriate Commission would set the green directly rather than being sent into the power grid.
energy tariff, which “may comprise the average The draft rules state that “Distribution Licensee
pooled power purchase cost of the renewable shall not be liable to acquire such energy.”
energy, cross-subsidy charges (if any), and service
charges covering all prudent costs incurred by The purpose of the most recent regulations appears
the distribution licensee for the provision of the to be to encourage large-scale energy consumers,
green energy.” especially industries, to source 100% of their energy
from renewable sources.
● The draft guidelines from the electricity ministry
are “a good move for renewables in the country,” ● The draft regulations state that when purchasing
according to a statement from the National Solar power from distribution firms, any business
could choose to “purchase green energy only up green hydrogen to satisfy their Renewable
to a particular percentage of the consumption or Purchase Obligation (RPO), but they add
its whole use.” a clarification that “the quantum of green
hydrogen would be computed by considering
● The proposed regulations specifically state
the equivalence to the green hydrogen produced
that the Commission must also establish
from one MWh of electricity from the renewable
rules to provide “Green Energy Open Access
sources or its multiple.”
to Consumers who are Willing to Consume the
Green Energy,” but they also make clear that
The production of green hydrogen, or hydrogen
only consumers who have contracted demand/
produced using power from renewable sources, is
sanctioned load of 100 kW and above shall be
currently a high priority for the Indian government.
eligible to take power through this system.
The Union Power Ministry said in June 2021 that
● According to the regulations, “the supply of
regulations for a “green tariff” policy are being
electricity for captive consumers using power
developed. This policy will enable electricity
under green energy open access shall not be
distribution companies to provide electricity from
limited.” They state that the central government
clean energy projects at a lower cost than power
must notify a “central nodal agency” that will
from conventional fuel sources.
run a single-window open access system for
renewable energy. The government is encouraging green hydrogen,
● The proposed regulations state that any according to the electricity ministry, by imposing
consumer, including industries, can purchase “obligations for fertilizer and refining companies
(green hydrogen purchasing obligations).”

Summary
● With growing worries about the nation’s energy security, the role of new and renewable energy has been
gaining more relevance recently.
● The research and implementation of alternative fuels, including hydrogen, biofuels, and synthetic fuels, as
well as their applications, are required to help close the gap between local oil production and demand and
reduce reliance on oil imports.
● India is utilizing more renewable energy sources like wind, hydro, solar, geothermal, bio, and tidal power to
supplement fossil fuel-based electricity generation in order to boost the share of clean energy. Additionally,
it would help achieve cost-effective, practical, secure, economical, and dependable energy supply solutions.
● India has proposed new regulations to reduce emissions and combat climate change, including requiring
its companies to utilize a certain percentage of renewable energy. The recommendations would take
effect by amending India’s 2001 Energy Conservation Act, which aims to promote renewable hydrogen as
a substitute for the fossil fuels currently used by businesses.
● According to a statement from the power ministry, the proposed revisions would make it easier for India
to build a carbon market and set minimum requirements for the use of renewable energy, either directly
or indirectly through the grid. “This will assist in reducing fossil fuel-based energy usage and atmospheric
carbon emissions.”

Unit 16
Politics of Green Energy Policy
By the end of this unit, you will be It is a matter of concern that economic expansion
able to understand: may surpass the planet’s ability to sustain it due to
● Green energy policy: Role of the approaching risk of severe global warming and the
governments negative effects of poor environmental management.
● Desirable conditions for green

The transition to sustainability necessitates a significant
energy policy
overhaul of economic institutions, technologies, and
systems. To achieve this, it is essential to understand
the concept of ‘green energy policy,’ a policy initiative
intended to align a nation’s energy sector structure with
the requirements of sustainable development within set
planetary bounds.
Governments must be proactive, but they cannot, by

themselves, bring about change at the necessary scale
and pace. They need to work together with non-state
actors to foster a transformational process where political
capture is reduced, as well as to ensure that gains and
costs are optimized and distributed fairly.
In other words, handling political-economic concerns

usually implies managing opposing interests and dealing
with more or less powerful individuals who want to gain
influence.
144 Politics of Green Energy Policy

Green Energy Policy: Role of The goal at this point is to apply what has been
Governments learned to bring about structural change in the
direction of the green transformation. However, for
Regulation, subsidies, and tax incentives are just government intervention to be truly revolutionary, it
a few of the policy tools that are utilized today to must go beyond the typical restrictions imposed by
guide economic activity toward environmental “traditional” industrial policy.
sustainability. Industrial policy has been used
for years to start and facilitate structural Contrarily, industrial strategy as we currently
transformation, so this is not illogical. understand it has promoted competitiveness along
well-established technical trajectories. Technology
diffusion has been left to the market, even though
innovation has been encouraged. Supply and
demand are mainly taken for granted, and market
forces have influenced the choice of particular
technologies.
Contrarily, environmental concerns are now

necessitating the purposeful disruption of old
channels in favor of new, sustainable ones.
In reality, a key objective of industrial policy, tying
Supporting diffusion of low-carbon technology,
environmental preservation to competitiveness,
such as via establishing markets, as well as
may help win over supporters. According to studies,
innovation in this area will be necessary.
implementing a green transformation can really
depend heavily on the alignment of interests that
Governments must work to sway public opinion
go beyond environmental conservation.
and alter (unsustainable) consumption habits.
In emerging economies, middle-class families
The execution of industrial strategy during the
often adopt lifestyles similar to those in
previous few decades has taught us many valuable
industrialized nations. This further contributes to
lessons. The prevailing tenets of industrial policy
the issue of unsustainable consumption patterns.
are:
Governments should therefore create additional
and fundamentally new policy instruments in
● Enabling experimentation driven by the private
addition to taking a more active role in directing
sector in search of new technologies
markets.
● Paying attention to the competitive distribution
of money The phrase “green industrial policy” is quickly
● Monitoring and assessment gaining popularity in this sense, extending beyond

the energy industry. It has recently been incorporated
● Instruments for codifying and learning policies
into internationally agreed agreements (United
systematically
Nations Conference on Sustainable Development,
● Sharing funds with the private sector 2012) and is rapidly being used by international

organizations as well as economic development the inevitable outcome.
and policy scholars.
Governments will be lobbied by different interest
Governments cannot allow the green revolution on groups if they are in charge. Rent-seeking and
their own; thus, expecting them to do so would be political capture are risks associated with this.
unrealistic, given: These interests must be controlled in a way that
prevents inefficiencies and excessive windfall
● The complexity of this undertaking gains for the green transition to thrive.
● Its effects on the economy and society at large

Desirable Conditions for Green Energy
● The political dynamics that such a process
Policy
unleashes
Here’s the corrected version of the text with

Therefore, governments must coordinate their
improved grammar:
efforts with nonstate entities. The government
has the authority to control, tax,
Three key conditions must be met for
subsidize, or invest. In addition,
a green energy policy to succeed:
there are nonstate change
agents in business or society. ● Efficiency
These actors may be in favor
● Effectiveness
of or against change.
● Legitimacy
Economic nonstate entities
are particularly important to the A balanced institutional
transition to a green economy. environment that balances the
Investment requirements for a 2C embeddedness and autonomy
scenario were projected by the World of governments in relation to the
Economic Forum to be US$5.7 trillion private sector is essential for an effective
annually in 2013. Significant changes in the context policy. By including market mechanisms in policy
of economic actors’ decision-making are required design, which is defined here as achieving given
to attract such investment. policy goals at the lowest possible cost, policy
efficiency can be increased.
By altering incentives, which would move profit
opportunities from polluting to clean investments, However, we contend that a project as intricate,
government actors can expedite this transition. extensive, and long-term as the transition to green
However, there will always be factions trying to energy should also be accepted. The many facets
sway such shifting in their favor when there is of legitimacy necessitate community agreement
redistribution of profit prospects. Similarly, there on:
will always be losers because transformation is
rarely a win-win situation. Resistance to change is ● A long-term plan for attaining the specified
objectives
● Accepting the expenses associated with policy lobbying or outright corruption could be better used
incentives (both in terms of subsidizing sunrise elsewhere.
sectors and compensating sunset sectors)
Green energy programs become more effective and
● An equitable allocation of both the benefits and
legitimate by decreasing the likelihood of capture.
the expenses (through, e.g., compensation as an
instrument of burden sharing)
Broad Agreement on the Direction of Change
Legitimacy, efficiency, and effectiveness are

The implementation of a green energy strategy takes
intertwined and cannot be implemented separately.
place in a setting with both significant uncertainty
All of these necessitate state-nonstate actor
and extensive time horizons. Furthermore, winners
interaction, mostly but not only in the economic
and losers are an inevitable part of economic and
domain. Additionally, they have four common
social reality, as are conflicts and controversies
underlying causes, which are:
based on frequently incompatible goals of various
societal groupings. These factors call for the
● Broad societal agreement on the
initiatives of the green transformation to
direction of change
be highly legitimate.
● Change alliances
● Systematic policy learning Regarding the long-term vision

of the transformation, broad
● The use of market
stakeholder consensus is
mechanisms to manage
required, for example, when
policy rents and political
it comes to shutting down
capture
some options and promoting new
industries (as seen with Germany’s
These elements support legitimacy,
decision to abandon nuclear energy
efficacy, and efficiency in various ways.
and make significant investments in
Societal consensus on directionality
renewable energy technologies). Such an agreement
gives transformative policy legitimacy and boosts
should create long-term policy frameworks and a
its efficacy. These odds can be improved by change
sufficient level of policy “directionality.”
alliances since less powerful actors can band
together to assist the shift.
Policies in favor of renewable energy put more
pressure on future governments to follow the same
Openness to policy learning improves both
course by transforming entire markets, lowering
efficiency and effectiveness. Incorporating market
prices, and opening up lucrative investment
elements—such as rivalry among beneficiaries—
opportunities. Investment, in turn, greatly depends
improves efficiency by eliciting data on ideal prices
on the stability of institutional frameworks over the
and streamlining resource allocation. Additionally,
long term.
it can aid in preventing political capture, which is
fundamentally ineffective because money spent on

It is impossible to fairly handle the issue of forging Change Alliances
a consensus on the most promising revolutionary
technologies, institutions, and policies without The green transition is a massive project that is
conversations involving the entire spectrum of extremely ambitious, uncertain, and complex.
stakeholders, ranging from: Alliances across the governmental, corporate, and
civil sectors are crucial for promoting the change
● Government agencies to business because “no single player has the resources to
bring about the green transformation.”
● Trade unions
● Consumer organizations
These partnerships can be considered as vehicles
● Civil society for combining various interests for a certain goal,
such as:
● The research community
● Influencing legislation
Social inclusion and fairness are also essential to
guaranteeing legitimacy when it comes to bearing ● Influencing policies
the additional costs of the green transformation.
● Influencing technological projects
Long-term support can only be maintained when
the essential burden sharing is perceived by Heterogeneous change alliances frequently
different demographic segments as equitable. The function in shaky networks and are undoubtedly
equitable distribution of rewards is also crucial for challenging to organize. However, in “particularly
ensuring legitimacy. conflictual negotiation scenarios, the identification
of previously unidentified ‘win-win alternatives’
A good example is Morocco, a nation that heavily
may make all the difference between a policy
relies on energy imports and is actively working
impasse and effective action.” So, expecting
to green both its energy mix and its economy.
shared advantages from the green revolution would
Morocco’s government has taken steps to establish
actually make cooperation easier.
a sustainable future by developing a plan for green
growth, collaborating with various stakeholders, The German energy transition, for instance, has
maximizing the benefits of green investments been fueled by:
across multiple sectors, phasing out subsidies for
fossil fuels, and addressing the needs of vulnerable ● Civil society advocacy organizations that
populations. genuinely promote sustainability
● Progressive business groups predicting the

expansion of green markets
● Both employers and labor unions in companies

that are creating new jobs, such as the wind
and solar energy sectors, or in the electronic
and chemical industries that export specialized
components to global green industries.

● Municipalities and regional administrations Co-benefit magnitude is influenced by a number of
striving to strengthen decentralized power variables, including:
structures
● The level of low-carbon technology deployment
Positive forces that might drive dramatic change
● Existing technological capabilities
are frequently mobilized by placing a strong
● State capacity to develop and implement
emphasis on the side effects of going green. Co-
coherent long-term strategies
benefits extend beyond the realm of commerce.
Measuring and capturing co-benefits from greening

They are categorized by the Intergovernmental
can impact:
Panel on Climate Change (IPCC) into:
● Investment decisions
● Economic benefits (e.g., energy security, local
employment) ● Individual behavior
● Social benefits (e.g., energy access, ● The priority setting of policymakers

health impacts)
Therefore, these co-benefits
● Environmental benefits (e.g.,
must be taken into account
decrease in air pollution and
from the start of any effective
water use
green energy program. They
serve as the cornerstone
Particularly, the effects on
of large coalitions, which
employment have been
are essential for political
important justifications for
advocacy campaigns.
the green transition. There is
evidence of good employment
Systematic Policy Learning
impacts in low-income developing
countries, despite the fact that the majority
Systematic policy learning is the third
of “green jobs” are created in OECD nations and
essential component for effectively implementing
emerging economies like China and Brazil (UNEP,
green energy legislation. Green energy policy is
2008) (Asian Development Bank, 2013).
arguably highly contextualized and necessitates
the skillful synthesis of tools tailored to the current
Another defense is that current energy services are
socioeconomic circumstances and institutional
accessible. However, the price and dependability
features of a certain country.
for the underprivileged must be taken into account
when evaluating the performance of energy access
The complexity of the green revolution also
programs. Even though some of these benefits are
necessitates systematic and ongoing learning.
hard to measure, their long-term repercussions and
Last but not least, to achieve the required speed of
economic spillover effects may pave the way for
transition, policies must evolve more quickly and, in
new development opportunities.
some situations, innovate.

We contend that systematic policy learning has to To further improve learning, a number of
focus on two key areas: policymaking methods must be applied, including:
● Learning from others over time ● Scenario planning
● Policy experimentation ● Technology foresight exercises
● Value-chain analyses
A cyclical strategy that regularly analyzes and
● Systems mapping
revises goals and accomplishments might support
these characteristics. ● Growth diagnostics
The ramifications for those involved in policymaking It is becoming increasingly understood that
are not insignificant because such a method of policy experimentation is essential for addressing
policy formulation necessitates a change from challenging development issues. This is mostly
linear to complex adaptive systems-based thinking. attributable to the growth of emerging economies,
which also stems from the adoption
Recent research has investigated how of unconventional policy strategies
to develop an efficient policy process that combine market forces with
for addressing complicated issues. governmental leadership. The
The World Bank’s “learning willingness to try new things is
spiral” is one of the most especially evident when trying
persuasive methods for to influence future sustainable
incorporating learning into development patterns.
policy formulation. An iterative
process, characterized by feedback For instance, model cities are
loops, forms the foundation of this growing in emerging economies and
approach. At its best, it allows for exploring new forms of low-carbon
the incorporation of new information in infrastructure for:
decision-making and provides the ability to adjust
previous goals and objectives to accommodate a ● Energy-efficient buildings
constantly evolving environment. ● Public transport
● Infrastructure for scaling up the use of electric

Agents serve as “learning brokers” or facilitators in
vehicles
this process, and they are in charge of:
● Waste recycling
● Framing the knowledge
In the absence of uniform and legally binding global
● Facilitating the ongoing revision
environmental policy frameworks, international
● Moderating the interactive learning procedures
networking and knowledge-sharing among change
● Facilitating dissemination of new knowledge agents can significantly advance the creation and
acceptance of sustainable alternatives.

Despite the triumphs of the global South in policy In order to do this, the government established the
innovation, industrialized nations are only just National Solar Mission in 2012 with the aim of:
beginning to learn from “Southern” ideas. The use
of renewable electricity feed-in tariffs is one area ● Increasing the capacity of grid-connected solar
in particular that supports such South-North policy power generation from 0.1 GW to 20 GW, plus 2
learning (FiT). Despite being developed in wealthier GW off-grid, by 2022.
economies, the technology has found widespread ● Lowering costs to achieve retail grid parity.
use and improvement in developing nations.
India was successful in attracting significant
Many different auctioning strategies have been investments in solar power facilities despite the
used with considerable success. By testing the myriad structural issues with its energy sector. The
market before awarding subsidies, auctioning installed solar capacity rose to nearly 13 GW in just
enables the determination of tariff levels in a free 5 years (Ministry of New and Renewable Energy,
market. 2017). The cost of solar energy also decreased
below the cost of newly constructed coal capacity,
Aside from the United Kingdom, emerging
which was made possible by extremely successful
economies like China, India, Brazil, and South
and competitive reverse auctions for 25-year Fit.
Africa have used auctioning most frequently. Many
of these cases were quite successful in increasing The government first tested the market with
the capacity for renewable energy sources and tenders for small projects. This was done since
securing a supply of electricity at a cheap cost. it was impossible to predict at what price per
kilowatt-hour businesses would invest in solar
The Case of India: We can find interesting examples
power facilities. The bids from project developers
of systematic policy learning throughout time. In
were requested to include the tariff rates at which
India, there were more than 270 million individuals
they would be willing to make an investment. The
without access to power grids in 2014. Here, power
lowest-priced bids were chosen by the government.
interruptions are common (World Bank, 2017), and
Then it organized a subsequent bidder call for
even if prices are heavily subsidized, many users
larger projects, requesting lower bids than the initial
lack the means or motivation to pay for electricity.
proposal, and so forth.
However, the potential for solar energy is huge in
India. The cost per kWh had decreased during the first
year of repeated auctions, from 0.27 to 0.11 euros.
Bids have decreased to 0.04 euros by 2017. Parallel
to this, contract language and bid requirements
evolved over time to take into account lessons
learned from earlier bids.
The government also took note of failed European

auctions when investors placed modest bids and
then broke their agreements. Bidders had to make

bank deposits in order to prevent engaging in such created by the private sector.
so-called risky bidding, which they would forfeit if
● Introducing standards gradually by enticing the
they failed to fulfill their obligations.
private sector to adopt voluntary standards, which
are then made obligatory once manufacturers
In the end, the National Solar Mission was
and consumers have had time to adjust.
successful in terms of generating investment and
lowering tariffs because of its clearly defined aims,
The targeted policy issue, as well as the national
sequential approach, and built-in protections.
circumstances, influence the choice of the
appropriate policy tool. The control of rents and
Designing an efficient auctioning system is a
the threat of political entrapment are crucial in
possible option for improving FiT systems that, in
the development and implementation of these
some European nations, have not been as effective
strategies.
as first anticipated, given the diverse experience
gathered and lessons learned in these rising
Managing Policy Rents: Given the numerous market
markets.
failures, massive upfront investments are
necessary for the transition to green
Integrating Market Mechanisms
energy and must be enforced by
in Green Energy Policies
legislation. To put it another
way, it is necessary to lower
“The utilization of market
revenues from unsustainable
mechanisms is the final
economic practices while
fundamental aspect that
creating policy rents to
contributes to a successful
artificially make these
green energy strategy. The
investments attractive.
possibility of capturing and
spreading private advantages
Thus, managing policy-induced
will be reduced the more competitive
rents entails creating (or eliminating)
market-based processes and initiatives from
incentives that lead economic players to
the private sector are incorporated into the design
momentarily produce profits above (or below) what
and execution of green energy policies.
the market itself would permit. Incentives must be
tailored to create the best possible conditions for
This could entail:
encouragement without going overboard.
● Including competitive bidding in strategies for

The risk of providing incentives that are too
green subsidies.
generous is that they will encourage wasteful
● Conducting new technology trials in public- resource allocation and lead to behavioral
private partnerships. patterns that make rent-seeking the main goal of
● Setting performance standards for comparable investment, which will stifle the entrepreneurial
items based on the most effective product spirit of innovation.

Policy rents can undoubtedly be an effective ● Poorly developed government capabilities
instrument and have the potential to develop into
● Weak monitoring systems
a strategic resource for bringing about structural
● Insufficient transparency
change when planned and implemented in the best
possible way.
The European Emissions Trading Scheme, for
instance, has demonstrated that political capture
Particularly when it comes to energy systems,
can also occur in settings with highly developed
policy rents have always played a significant
governmental capabilities. According to numerous
role. During the post-war decades, many nations
authors, the European Emissions Trading Scheme
favored coal-based regimes, while others invested
has been victimized by a variety of advocacy groups
in nuclear power during the 1970s and 1980s, and
with economic interests in promoting:
more and more nations have supported renewable
energy since the 1990s. There are many different
● The free allocation of permits
types of instruments.
● Exemptions and loopholes
Rents can be created by: ● The excessive issuance of permits
● Increasing costs (such as in Furthermore, in many nations,

the case of FiT for renewable incentives that are harmful to
energy sources) the environment go beyond
● Offering long-term loans at simple exemptions to outright
a discount support harmful activity.
Countries all across the world
● Offering subsidies for
are still significantly subsidizing
investments in certain emerging
fossil fuels, despite the fact that
technologies’ R&D
the discussion about fossil fuel
● Establishing a specific institutional or
reserves and stranded assets is gaining
physical framework for cooperative technology
momentum.
exploration activities.
Even though there is widespread agreement that

Managing the Risk of Political Capture: There is a
fossil fuel subsidies seriously impede the green
lot to learn about how to manage political capture
transformation process, cutting subsidies is
risk in state-industry interactions. In essence, it
notoriously challenging. Although policymakers
contends that strong interest groups can thwart the
defend fossil fuel subsidies on the grounds of
stated goals of incentive programs and sway the
justice and competitiveness, there is emerging
results of regulatory action taken by government
evidence that doing so has negative social,
agencies (typically through lobbying).
financial, and environmental impacts.
In situations where there is a lot of lobbying

Middle and high-income demographic segments,
pressure, the capacity to:
as well as other influential stakeholders such as

energy-intensive companies and fuel distributors, ● Inability to form consensus among diverging
have especially benefited from fossil fuel subsidies. interests
These factors make tight collaboration between the
general public, the government, businesses, energy In nations with the greatest need for subsidy
producers, and international donors necessary for reform, political potential for reform is typically low
subsidy reform. due to subsidies being used as tools of political
legitimization and weak channels for compensating
Strong vested interests among these parties, vulnerable income groups.
including those held by the government, trigger
complex political-economic processes. In cases Second-best options for subsidy reform, such
where reforms have been effectively implemented, as switching from fossil fuel to food subsidies—
coalitions between diverse stakeholders have which are easier to control, less detrimental to the
formed, compensation programs have been environment, and help reduce poverty—should be
implemented, and intensive awareness campaigns considered where political credibility is low.
have been conducted (e.g., South Africa, Turkey,
Philippines). Given the significant possibility of political
entanglement and the high degree of uncertainty
The establishment of independent energy policy and risk associated with green energy policy,
agencies in certain countries has helped maintain there must be equal requirements for open
stability and continuity of reforms. Additionally, implementation and stringent oversight.This can
better economic conditions and transparency in be achieved, for instance, by:
decision-making have decreased resistance and
facilitated the formation of alliances. ● Creating roadmaps based on exercises in
inclusive technology foresight
However, reforms often fail due to the following ● Regular performance reviews of entities in
reasons: charge of implementing policies
● Lack of state capabilities to manage strong Such measures are crucial in situations where
opposition from interest groups institutional capacity is lacking and where checks
● Lack of public awareness regarding the size and and balances need to be enhanced in order to
impact of subsidies separate and assess various policy roles.

Summary
● The role of a green energy strategy in directing a green transformation is crucial. Such a transition calls for
inventiveness and a rapid pace of innovation in both institutions and technologies.
● Economic history has demonstrated the value of the private sector in creating commercially viable solutions
for a variety of issues, sometimes with little or no assistance from the government but frequently with
significant public investment at precompetitive stages.
● Finding consensus on the broad contours of desirable societal change is thus the art of any policy aiming
at structural change, particularly in green energy policy. The private sector should be given incentives to
find the most practical and cost-effective solutions through regulations and rent management procedures.
● Less than ideal decisions are likely to be made due to the high risks and uncertainties involved. For this
reason, the significance of a logical and open policy-making process, ongoing systematic policy learning,
and choices for corrective action is paramount.
● The green transition provides fresh prospects and a plethora of side advantages, including but not limited
to security, energy access, job development, and competitiveness in new green sectors.
● Additionally, since the dynamics of change frequently feed off one another, efforts should be made to
foster constructive feedback loops. For instance, new information and communication technologies may
broaden consumer environmental awareness and the world’s knowledge networks.
● Future research in this area should focus on understanding the processes of co-evolutionary change
indicated earlier. Furthermore, country- and context-specific ideas for a green transformation call for
additional research.
● This is relevant in country-specific institutional conditions, such as when governments are ineffective
and markets fail. It also relates to the energy market environment, which has a significant impact on the
political economy of implementing green energy policies.

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Energy Law and Policy

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U NIVERSIT Y OF TOMORROW

Energy Law and

Unit 1 Energy Laws.................................................. ................................................................ 1

Unit 6 Distributed Energy Resources.................................................................................... 46

Unit 11 Environmental Justice................................................................................................ 88

Unit 16 Politics of Green Energy Policy..................................................................................... 144

Learning Objectives Introduction

● Need for energy laws directives, legislation, and orders.

● Energy laws in India

The taxation of energy use is likewise governed by

Main Law of Energy

A conservation law is a rule that states, “If a certain

Energy is divided into different types based on its

● Protecting the environment There is a certain amount of biomass at each level,

Energy plays a crucial role in the infrastructure of

Energy Laws in India

was eliminated and made regarding the taxation of

explicit. This change enabled renewable energy. While

private companies to play a electricity is exempt from the

larger role in power generation, Goods and Services Tax (GST),

distribution, and transmission. lawmakers have had differing

Private individuals, however, still opinions on whether renewable

activities. from the GST.

● The Electricity Act grants private

● Promoting the use of clean energy sources for

● Encouraging private sector participation in the

Previously, the government introduced a

● Streamlined access to land for These commissions possess

methods of determining tariffs: upon rate.

● Tariffs are established by the The act states that if a tariff is

central and state commissions determined through competitive

based on the tariff rules they bidding, it must be adopted by the

have issued. central or state commission,

The regulation broadens the definition of “renewable

● Enforce a minimum obligation to purchase renewable energy.

Renewable Energy Sources

Learning Objectives Introduction

By the end of this unit, you will be

Renewables are increasingly replacing “dirty” fossil fuels

However, not all “renewable” energy sources are

As the adoption of renewable energy continues to

Renewable Energy is Healthier: The World Health

11 Renewable Energy Resources

Green Energy Here are some of the ways

12 Renewable Energy Resources

13 Renewable Energy Resources

Co-Produced Geothermal Energy: Co-produced

14 Renewable Energy Resources

15 Renewable Energy Resources

Types ● Wind power is a cost-effective option.

● Utility-scale wind turbines on land are among the

16 Renewable Energy Resources

● Wind turbines operate effectively in various

17 Renewable Energy Resources

Biomass offers a range of benefits, including:

18 Renewable Energy Resources

Renewable energy sources are considerably more

Hydropower is a form of renewable energy that utilizes

● The rain and snow flow into streams and rivers,