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Canada's Clean Fuel Regulations require liquid fossil fuel primary suppliers to gradually reduce the carbon intensity of the gasoline and diesel that they produce and sell for use in Canada. The Regulations establish a credit market to help drive innovation in meeting increasing stringency. Investments and initiatives that complement the Clean Fuel Regulations, such as a biofuels production incentive, are designed to support the development of a clean fuels sector.

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The Clean Fuel Regulations are an important part of Canada's climate plan to reduce emissions, accelerate the use of clean technologies and fuels, and support sustainable jobs in a diversified economy.

The Clean Fuel Regulations help drive innovation and create job opportunities across multiple sectors, including clean technology, agriculture and low-carbon energy sectors, such as biofuels and hydrogen.

Under the Clean Fuel Regulations, the gasoline and diesel Canadians use every day will become progressively cleaner over time and affordable alternatives will be increasingly available to consumers. In 2020, the transportation sector accounted for 24 percent of Canada's total emissions.

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The Council is undertaking a Climate Emergency Review of its local plan and proposes local energy efficiency standards for buildings that go beyond current or planned buildings regulation.

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Ballylumford POWER 2 X- This project aims to create a full-cycle hydrogen economy using 100% renewable energy sources, testing green hydrogen production, storage and its use in power generation, with the view to supporting Northern Ireland’s transport sector as it looks to decarbonise

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el Peru esta entrando con fuerza en la transicion energetica, cuenta con varias plantas de generacion de energia eolica en el norte del pais y una gran farm de enrgia fotovoltaica en el sur del pais

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Indonesia – Just Energy Transition Partnership (JETP)

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Indonesia – Just Energy Transition Partnership (JETP)

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In 2022, several countries agreed to invest USD$20 billion of public and private finance in Indonesia's energy system. The Just Energy Transition Partnership will help Indonesia's transition from coal to renewable energy and achieve net zero emissions by 2050.

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One year on from the announcement of the first "Just Energy Transition Partnership" (JETP) at the 26th UN Climate Change Conference of the Parties (COP 26) in Glasgow, how these types of innovative funding models will work, what they can achieve for climate change mitigation, and what pitfalls they must avoid are questions that are drawing increasing attention and scrutiny. With a new JETP announced in early November and four additional countries also set to take part in these mechanisms, now is a valuable time to take stock of the developments to date and what lessons can help inform these partnerships going forward.

These JETPs are a nascent financing cooperation mechanism, the aims of which are to help a selection of heavily coal-dependent emerging economies make a just energy transition. The goal is to support these countries' self-defined pathways as they move away from coal production and consumption while doing so in a way that addresses the social consequences involved, such as by ensuring training and alternative job creation for affected workers and new economic opportunities for affected communities.

The first such JETP emerged from COP 26 in Glasgow, when South Africa was promised USD 8.5 billion in financing by France, Germany, the United Kingdom, the United States, and the European Union. A second tranche of countries announced as partners in the JETP approach included India, Indonesia, Vietnam, and Senegal. The donor pool has since been expanded to include multilateral development banks, national development banks, and development finance agencies. As they involve a relatively small group of actors, JETPs can potentially make much faster progress on the energy transition than what would be possible in the UN climate talks themselves, where large oil and gas-producing countries could veto agreement.

In November 2022 at COP 27 in Sharm el-Sheikh, South Africa published its JETP Implementation Plan (JETP IP), which laid out its priority investment requirements in the electricity, new energy vehicles, and green hydrogen sectors. The finance needed to achieve the aims of the JETP IP, at USD 98 billion, is far more than the USD 8.5 billion announced in Glasgow. This means the JETP IP is far broader, and therefore more realistic, in laying out the actual transition needs, but also indicates the scale of change needed in many countries to achieve a just energy transition.

At the G20 leaders' summit in Bali, also in November, Indonesia's JETP deal was announced: USD 20 billion in finance over 3 to 5 years, half from the donors and half due from the private sector. The JETP laid out an emissions trajectory for the country and how to achieve it: peaking power sector emissions by 2030, not the previous 2037, and capping carbon dioxide emissions levels about a quarter lower than previously expected by the same time.

From Promise to Practice: Ensuring JETPs can deliver

While these announcements show real progress, the implementation of the JETPs will be the true test of their contribution. However, JETPs do have the potential, if their implementation follows the right principles, to extend the scope of climate finance to date because they are more explicitly co-focused on the social aspects of the energy transition and enabling a phase-down in fossil fuel use.

A new IISD policy brief argues that shifting from coal to fossil gas, through JETPs or indeed any international public finance, would not constitute the sustainable and just transition that the JETP model stands for. While there is pressure from some of the JETP countries-and this is something not totally ruled out in South Africa's JETP IP, and Senegal is keen to develop its gas fields-to make a bridging transition to gas, this is technically unnecessary, economically disadvantageous, and dangerous for the climate.

Russia's war in Ukraine has led to high gas prices around the world, which is emblematic of the general volatility of the global gas market. While South Africa, Indonesia, India, and Vietnam source a large proportion of their current coal use domestically, a transition to gas would expose their economies to this volatility. In contrast, leapfrogging from coal straight to wind and solar would enable them to make use of their own natural resources to provide their people with an economically secure source of energy.

Given the technological improvements in renewable and storage technologies, along with the massive cost reductions for these technologies over the past decade, renewable energy is increasingly cost-competitive. In some markets, these technologies are also cheaper than fossil gas infrastructure and the related running costs. Concerns about the supply variability of renewables can be addressed by pump storage and, increasingly, battery storage. These approaches are well suited to grid balancing, as they can be turned on or off in fractions of a second.

All of the JETP countries have considerable wind and solar potential. For example, the International Renewable Energy Agency found that "realistically, and cost-effectively, South Africa could supply 49% of its electricity mix from renewables by 2030" and Indonesia could meet its 31% renewable use goal, which has a 2050 target date, by 2030. However, Indonesia would need USD 16 billion in investments over that period to do so.

Renewable sources of energy are well suited to meeting energy access needs, which remains an issue for all JETP countries with the exception of Vietnam. According to World Bank figures, 36.9 million people in the JETP countries alone lack access to energy. Many people who lack access to modern energy live in rural areas and the modularity and feasibility for energy projects to be installed without needing expensive grid extensions. This makes wind and solar energy ideally suited to meeting the energy access needs that hamper countries' abilities to develop to their full potential.

Renewables can also have greater social benefits than fossil gas. The United Nations Industrial Development Organization and the Global Green Growth Institute found that for Indonesia and South Africa respectively, investment of USD 1 million in fossil fuels could generate 22 and 33 jobs. In contrast, investing the same amount in clean energy could generate 103 and 66 jobs, respectively. There has not been much detail yet on how the "just" element will be addressed in the two most advanced JETPs. South Africa's JETP IP refers to the need for strategic planning for the skills needed to support economic diversification and place-based "Skills Development Zones" to provide appropriate training for workers so they can contribute within locally relevant value chains. Indonesia's November 2022 JETP statement spoke of "implementation of concrete actions achieving a just energy transition for workers and communities." More granularity will be needed for the planned energy transitions to be considered just.

The urgency of the challenge

The climate imperative to leapfrog from coal to clean energy is clear. Recent IISD analysis shows that "global gas power generation capacity should decrease by more than 55% by 2035 compared with 2020 levels" in order to try to limit average global temperature increases to 1.5°C, in line with the Paris Agreement target.

Investing in any new long-lived gas infrastructure would create significant risks of stranded assets. This is because gas-fired power plants have a lifespan of over 40 years, and with renewables continuing to fall in price, and as governments increasingly implement climate regulations, the utilization rates of more expensive gas assets will decline. This means less revenue, thus reducing or negating returns on investment. Furthermore, investments in fossil gas now would simply delay the transition to clean energy in JETP countries and would, in turn, necessitate a second round of JETPs to achieve what could-and should-have been achieved the first time around.

There are no good technical, economic, or climate science arguments for the use of public money to support a transition to using gas as a bridge away from coal. Donor countries have agreed so far that JETP finance should be fossil free, but the fact that the JETP IPs that are being developed may not fully follow that principle means that civil society needs to be vigilant so that climate-damaging projects do not get funded. Renewables represent a credible technical alternative to fossil gas and are an approach that can better address other issues, such as energy access, while not endangering the climate further.

JETPs should serve as a beacon to the wider investment community that participating governments are committed to a global clean energy transition. As South Africa, Indonesia, and donors move toward putting these JETPs into practice, and with the prospect of further JETPs for other countries on the horizon, ensuring these partnerships deliver on their potential means avoiding false solutions like fossil gas, prioritizing renewables, and ensuring these efforts are informed by the latest available thinking on how to ensure a just transition. And these are principles that should guide all use of public finance for energy transition, not just the JETPs.

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Just Energy Transition Partnerships: An opportunity to leapfrog from coal to clean energy

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One year on from the announcement of the first "Just Energy Transition Partnership" (JETP) at the 26th UN Climate Change Conference of the Parties (COP 26) in Glasgow, what have we learned and where are these innovative funding models headed?

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United Arab Emirates – National Water and Energy Demand Management Programme

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United Arab Emirates – National Water and Energy Demand Management Programme

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In 2021, the UAE launched its National Water and Energy Demand Management Programme. By 2050, it aims to:
• Improve energy efficiency by 40% in the country's three most energy-intensive sectors: transport, industry and construction
• Increase renewables in the energy mix to 50%
• Expand water re-use by 95%

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National Water and Energy Demand Management Programme | The Official Portal of the UAE Government

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The National Water and Energy Demand Management Programme targets 40 per cent efficiency of the three most energy-consuming sectors in the UAE: transport, industry and construction. It includes three main pillars: Energy, water and consumption rationalisation.

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United States – The Office of Clean Energy Demonstrations (OCED)

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United States – The Office of Clean Energy Demonstrations (OCED)

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Established in December 2021 to scale emerging technologies with over USD$25 billion funding. Delivers clean energy demonstration projects by collaborating with the private sector. Focuses on areas including green hydrogen, carbon capture, energy storage and nuclear.

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Homepage for the Office of Clean Energy Demonstrations

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Japan aims to reduce its reliance on foreign energy and move away from nuclear power by turning to renewables like solar, wind and tidal power.

The Japanese Government has prioritised investments in solar energy:
• 2012 – introduced a renewable energy feed-in tariff
• 2015 – introduced cuts in electricity costs generated by solar power.
• 2021 – invested USD$5.2 billion into the domestic semiconductor industry
• 2022 – offered large subsidies for joint projects with Taiwanese companies (a key semiconductor supplier) and the US

Due to limited available land, Japan has become a world lead in floating solar power (home to 73 of the world's 100 largest floating solar panels).

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Solar has been the driving force behind an increase in all renewable energy from 12.1% to 17.4% between 2014 and 2018. Credit: Σ64

Japan has big plans for the future of its renewables sector. New legislation introduced in 2017 aims to increase the country's percentage of power from renewable sources, with greater government oversight of renewable projects to ensure their efficiency, and purchases of greater volumes of power from renewable sources.

This is particularly significant considering two factors: Japan's reliance on energy from foreign sources, and its recent move away from nuclear power. The World Nuclear Association reported in 2019 that the country needs to import 90% of its energy, and following the 2011 Fukushima disaster, Japan's share of power from nuclear sources has collapsed from 30% in 2011 to a production target of just 20% by 2030.

With these in mind, Japan is turning to sources such as solar, wind and tidal power to reduce its dependence on overseas production, and trigger innovation in its domestic energy sector. We profile the country's clean energy sources, and consider how realistic its 2030 clean energy goals are.

Solar power priorities

The Japanese Government has made investments in solar a priority, with the power source set to lead the way to a clean energy future. In 2015, the government announced cuts to the purchase price of electricity generated by solar power from $0.25 to $0.22 for non-household power sources, and around $0.30 to $0.28 for household customers, enabling a wider range of individuals and companies to purchase clean power.

This initiative is emblematic of a more long-term decline in the cost of producing solar power, with the average sale price of a solar module falling from $1.64 per watt in 2011 to just $0.70 per watt in 2018, to the Renewable Energy Institute. These policies have resulted in an increase of solar's contribution to the country's energy mix from 1.9% in 2014 to 6.5% in 2018, the largest increase of any single energy source; as a result, solar has been the driving force behind an increase in all renewable energy from 12.1% to 17.4% over this period.

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Due to limited space on land, floating solar power has made particular strides, with 73 of the world's 100 largest floating solar plants operated by Japan. The largest project, at the Yamakura Dam, covers 18 hectares and powers close to 5,000 homes a year with a total capacity of 13,700kW.

These trends have led to increased attention in the solar sector by international energy companies, whose financial muscle and support for large-scale projects could accelerate this growth further. In October 2019, Total announced the construction of its third solar facility in Japan, the Miyahi Osato Solar Park, a 52MW plant that will double the company's solar output in the country to 104MW.

With solar power, and particularly floating solar, growing exponentially around the world - the World Bank notes that annually installed solar capacity increased from 1MW in 2011 to 67MW in 2016 and 512MW in 2018 - Japan could be set to dominate the solar sector in years to come.

Potential for wind power

Due to Japan's small land mass, offshore wind power could be the future of the country's wind sector. In November 2019, the government passed a bill allowing wind farms to operate in the country's waters for up to 30 years, a long-term commitment to offshore wind power that could deliver benefits well into the future.

This policy is especially significant considering the government did not lower feed-in tariff rates for onshore or offshore wind as it did with solar power, so wind power looks set to be a long-term investment for the country. Japan is committed to meeting 24% of its renewable energy goals by 2030, but a further 80% reduction in greenhouse gas emissions by 2050, and long-term commitments such as these will be vital to ensuring these targets are met.

In a similar manner to solar power, the support of large-scale companies will be vital to delivering these ambitions. Japanese firm ORIX has committed $903m to build a wind farm off the coast of Chiba Prefecture, a facility which will provide 200MW of electricity, and is slated to begin production in 2025. There is parallel foreign support, with German energy company E.ON signing an agreement with domestic firm Kyuden Mirai to deliver offshore wind projects; the latter already provides 189MW of power from renewable sources, and plans to develop facilities for a further 511MW.

The Japan Wind Energy Association estimated that by 2030, 10GW of offshore wind capacity will be installed, which will cut carbon dioxide emissions by 70 million tonnes, and generate up to 90,000 new jobs. Considering Japan's wind energy capacity was just 3,399MW according to the International Energy Agency, these goals are certainly ambitious, and Japan's ability to deliver on these plans could make or break their 2030 climate goals.

Experimental tidal technology

While tidal power facilities are relatively new in Japan, there is significant potential for development. A published in a 2017 issue of the International Journey of Marine Energy predicted that 1,130 tidal power turbines could be constructed in the Naru, Takigawara and Tanoura straits in southern Japan, which could produce up to 106.78MW of power.

Tidal power has also attracted the attention of New Energy and Industrial Technology Development Organization (NEDO), a public research and development organisation in Japan. In a magazine published in 2017, NEDO highlighted a number of experimental technologies and tidal power solutions still in the trial stages, including a dual-bladed floating power generator, whose propellers spin in opposite directions to maintain its position, and a generator that converts the movement of air across the waves to electricity, which cuts installation costs by being built on shorelines.

Beyond these concepts, a number of deals have been put in place to bring tidal power to Japan. In 2018, British companies Xodus and Atlantis Resources signed a memorandum of understanding to develop a tidal facility in Japanese waters, while Simec Atlantis Energy, another British firm,was commissioned by Japanese utility company Kyuden Mirai energy for a $16m tidal demonstration project, which will generate 500kW of energy beginning in 2021.

While there is undoubted potential in Japan's tidal power sector, delivering on these promises will be another matter. With details about construction timescales and expected production figures scarce, and many of the new developments reliant on the involvement of foreign companies, it remains to be seen how effectively Japan can deliver on these promises, and how beneficial these developments will be for the Japanese renewable sector as a whole.

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New laws and new targets: renewable power in Japan

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With new laws in place to encourage renewable projects, JP Casey profiles Japan's clean energy sources, and consider how realistic its 2030 goals are.

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India – The Energy Conservation (Amendment) Bill 2022

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India – The Energy Conservation (Amendment) Bill 2022

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Targets energy-intensive sectors through several decarbonisation and energy efficiency measures:
• Renewable energy mandates for largest energy consumers
• Sets up a carbon credit trading scheme
• Includes residential buildings in the Energy Conservation and Sustainable Building Code
• Includes vehicles and industrial units in energy consumption standards

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The Energy Conservation Act, 2001 provides a framework for regulating energy consumption and promoting energy efficiency and energy conservation.[i] Energy efficiency means using less energy to perform the same task. The Act has set up the Bureau of Energy Efficiency to recommend regulations and standards for energy consumption. These apply to appliances, vehicles, industrial and commercial establishments and buildings. Efforts towards energy conservation and efficiency gains are among the key instruments envisaged for climate change mitigation. Efforts on these fronts lower the energy generation requirement, and thereby reduce greenhouse gas emissions. These also have positive implications for energy security in a country like India, which relies on imports to meet some of its energy needs.[ii] As per an estimate by the Bureau, programs for efficient energy use have helped India save about 28 million tonnes of oil equivalent energy in 2019-20 (this amount of energy could light about 185 crore 20W LED bulbs 24X7 for a year).[iii]

During the COP-26 summit in 2021, India made the following commitments which may be relevant for energy efficiency efforts: (i) reducing total projected carbon emissions by one billion tonnes by 2030, and (ii) reducing the carbon intensity of the economy by 45% by 2030 over 2005 levels.[iv] Carbon intensity is defined as the volume of carbon emissions per unit of GDP. In addition, India aims to have 500 GW of non-fossil energy capacity and meet 50% of its energy requirements from renewable energy by 2030.3 Against this backdrop, the Energy Conservation (Amendment) Bill, 2022 was introduced in Lok Sabha in August 2022.[v] The Bill was passed by Lok Sabha and is currently pending before Rajya Sabha. The Bill seeks to amend the 2001 Act to: (i) facilitate the achievement of COP-26 goals, and (ii) introduce concepts such as mandated use of non-fossil sources and carbon credit trading to ensure faster decarbonisation of the Indian economy.

Carbon credit trading: The Bill empowers the central government to specify a carbon credit trading scheme. Carbon credit implies a tradeable permit to produce a specified amount of carbon dioxide or other greenhouse emissions. The central government or any authorised agency may issue carbon credit certificates to entities registered and compliant with the scheme. The entities will be entitled to trade the certificates. Any other person may also purchase a carbon credit certificate on a voluntary basis.

Obligation to use non-fossil sources of energy: The Act empowers the central government to specify energy consumption standards. The Bill adds that the government may require designated consumers to meet a minimum share of energy consumption from non-fossil sources. Different consumption thresholds may be specified for different non-fossil sources and consumer categories. Designated consumers include: (i) industries such as mining, steel, cement, textile, chemicals, and petrochemicals, (ii) transport sector including Railways, and (iii) commercial buildings, as specified in the schedule. Failure to meet this obligation will be punishable with a penalty of up to Rs 10 lakh. It will also attract an additional penalty of up to twice the price of oil equivalent of energy consumed above the prescribed norm.

Energy conservation code for buildings: The Act empowers the central government to specify Energy Conservation Code for buildings. The code prescribes energy consumption standards in terms of area. The Bill amends this to provide for an 'Energy Conservation and Sustainable Building Code'.
This new code will provide norms for energy efficiency and conservation, use of renewable energy, and other requirements for green buildings. Under the Act, the energy conservation code applies to commercial buildings: (i) erected after the notification of the Code, and (ii) having a minimum connected load of 100 kilowatt (kW) or contract load of 120 kilo volt ampere (kVA). Under the Bill, the new Energy Conservation and Sustainable Building Code will also apply to the office and residential buildings meeting the above criteria. The Bill empowers the state governments to lower the load thresholds.

Standards for vehicles and vessels: Under the Act, the energy consumption standards may be specified for equipment and appliances which consume, generate, transmit, or supply energy. The Bill expands the scope to include vehicles (as defined under the Motor Vehicles Act, 1988), and vessels (includes ships and boats). The failure to comply with standards will be punishable with a penalty of up to Rs 10 lakh. Non-compliance in case of vessels will attract an additional penalty of up to twice the price of oil equivalent of energy consumed above the prescribed norm. Vehicle manufacturers in violation of fuel consumption norms will be liable to pay a penalty of up to Rs 50,000 per unit of vehicles sold.

Composition of the governing council of BEE : The Act provides for the setting up of the Bureau of Energy Efficiency (BEE). The Bureau has a governing council with members between 20 and 26 in number. These include: (i) secretaries of six departments, (ii) representatives of regulatory authorities such as the Central Electricity Authority, and the Bureau of Indian Standards, and (iii) up to four members representing industries and consumers. The Bill amends this to provide that the number of members will be between 31 and 37. It increases the number of secretaries to 12. It also provides for up to seven members representing industries and consumers.

The Bill empowers the central government to specify a carbon credit trading scheme. Carbon credit refers to a tradeable permit allowing the holder to emit a specified amount of carbon dioxide or other greenhouse gases such as methane and nitrous oxide. These may be earned by reducing emissions for a given activity or creating sinks for carbon absorption such as forestry. Carbon credits may be purchased by an entity that emits above its specified amount. A carbon credit trading scheme is aimed at reducing greenhouse gas emissions, and hence, addressing climate change. We discuss certain issues with the provisions of the Bill below.

As per the Act, the Ministry of Power will be the nodal Ministry for the regulation of the scheme, and the Bureau of Energy Efficiency under the Ministry of Power will be the implementing agency. As per the Government of India (Allocation of Business) Rules, 1961, the Ministry of Power is responsible for: (i) general policy in the power sector, and issues related to energy policy and coordination, and (ii) energy conservation and energy efficiency pertaining to the power sector.[vi] The energy sector is the major contributor to greenhouse gas emissions in India (about 75% in 2016).[vii] However, the ambit of carbon credit trading could be wider than the energy sector. Activities such as agriculture (14%) and industrial processes (8%) also make sizeable contributions to greenhouse gas emissions (see Table 1 on next page).7 In addition, the land use, land-use change, and forestry sector is the main sector providing a net carbon sink, i.e., it absorbs greenhouse gases.7 In 2016, this sector absorbed about 11% of the greenhouse gases emitted by other sectors on a net basis.7

Under the Business Allocation Rules, it is the Ministry of Environment, Forest, and Climate Change, which is responsiblefor the regulation of: (i) 'climate change and related matters', (ii) environmental norms, and (iii) forestry.6 In jurisdictions such as USA, UK, and Switzerland, the Environment Ministry or Environment Regulator implement schemes similar to the one proposed by the Bill (referred to as emission trading or cap-and-trade schemes).[viii]
Table 1: India's Total Emissions by Sector in 2016 (in Million Tonnes CO₂ Equivalent)
Source: Table 2.35, India's Total Emissions 2011-2016, Third Biennial Update Report to The United Nations Framework Convention on Climate Change 2021, Ministry of Environment, Forest and Climate Change; PRS.

Typically, trading platforms are regulated by respective sectoral regulators. For example, share and commodity trading is regulated by the Securities and Exchange Board of India (SEBI).[xi] Electricity trading is regulated by Central Electricity Regulatory Commission (CERC).[xii] The regulating entities for trading have been specified in respective Acts. The Bill does not give clarity on how carbon credit certificates will be traded, or who will regulate such trading. The question is if there were to be a regulator, should it be specified in the Act itself.

Note that the Energy Conservation Act provides for energy savings certificates.[xiii] The Act does not specify the regulator for the trading of these certificates. These certificates are traded on power exchanges, which are in turn regulated by CERC.[xiv]

Currently, there are two key trading schemes operational in the energy sector in India: (i) Renewable Energy Certificate under the Electricity Act, 2003 for promoting renewable energy, and (ii) Energy Savings Certificate under the Energy Conservation Act, 2001 for promoting energy efficiency.15 The Bill adds a tradeable carbon credit certificate for reducing carbon emissions. The same activity may get covered under these schemes separately. For example, if a power generation company produces renewable energy, it earns a renewable energy certificate. By producing renewable energy, it may also be reducing carbon emissions, and hence, could be entitled to get carbon credits. Similarly, all energy saving measures could qualify as carbon emission reduction measures, as they reduce the amount of energy generation needed and hence, reduce carbon emissions. The Bill does not specify whether these certificates will be interchangeable or not.

The Bill adds that the government may require certain designated consumers to meet a minimum share of energy consumption from non-fossil sources. Different consumption thresholds may be specified for different non-fossil sources and consumer categories. Designated consumers include: (i) industries such as mining, steel, cement, textile, chemicals, and petrochemicals, (ii) transport sector including Railways, and (iii) commercial buildings, as specified in the schedule. Failure to comply will be punishable with a penalty of up to Rs 10 lakh. Electricity is a key form of energy used across consumer categories. Currently, most consumers may not have an option to buy electricity produced from a specific source. Possible sources for a consumer to meet electricity needs could be: (i) supply from a power distribution company (discom), (ii) direct procurement from a generator, or (iii) captive generation (generating on their own).

Choice in the energy mix of supply from discom: Typically, commercial establishments like a hotel in Delhi will be procuring energy from the discom of the area. Under the Bill, an obligation may be cast upon it to procure electricity from non-fossil sources. Power supply in an area is often a monopoly, that is, only one discom supplies electricity to all consumers in an area. The hotel may not have control or choice over the mix of electricity it is buying, since the energy mix is decided by the discom.

Difficulties with open access: Amendments to Electricity Rules notified in June 2022 have allowed consumers with a minimum load of 100 kW to procure green energy from a generator of their choice (called open access).[xvii] The earlier threshold was 1 MW. As per these Rules, green energy includes renewable energy such as solar, wind, and hydro, and green hydrogen and green ammonia. However, the Ministry of Power had informed the Standing Committee on Energy (2022) that in most states, open access is not really a possibility for consumers as Regulatory Commissions have stipulated high open access charges.[xviii]

Implications of obligation for nascent technologies: Through the non-fossil energy use obligation, the Bill seeks to increase the demand for new sources of non-fossil energy and thereby their adoption. The term non-fossil sources has not been defined in the Bill, the Act, or the Electricity Act, 2003. The Bill defines energy as "any form of energy derived from fossil fuels or non-fossil sources or renewable sources". Hence, it distinguishes between non-fossil sources and renewable sources (which would include sources such as solar, wind, and hydro). As per the Statement of Objects and Reasons of the Bill, examples of non-fossil sources include biomass, green hydrogen, green ammonia, biomass, and ethanol.

There may not be a widespread generation of power from some of these sources that the consumer can access. For instance, the share of biomass in India's total installed electricity generation capacity was 2.5%, as of August 2022.[xix] Technologies such as green hydrogen and green ammonia are still at a nascent stage.3 Currently, it may not be feasible to produce energy from them affordably. Also, energy is a key input to industrial activity, and such an obligation may then adversely impact the competitiveness of the industry.

The Electricity Act, 2003 uses a different approach to promote the use of renewable energy. It mandates discoms, who are bulk-procurers from generators and suppliers to end-consumers, to procure a certain percentage of energy from renewable sources

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The Energy Conservation (Amendment) Bill, 2022

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The Energy Conservation Act, 2001 provides a framework for regulating energy consumption and promoting energy efficiency and energy conservation.[i] Energy efficiency means using less energy to perform the same task. The Act has set up the Bureau of Energy Efficiency to recommend regulations and standards for energy consumption.