India's Carbon Trading Platform on Track for September Launch to Drive Renewable Energy Transition
NEW DELHI: India's carbon trading platform is expected to become operational by September, serving as a key driver for the country's renewable energy transition, according to a senior official's announcement on Thursday. This development holds significant importance in light of India's ambitious goal of achieving 500 gigawatts (GW) of renewable energy capacity by 2030.
Addressing Slow PPA Signings Through Market Constructs
Central Electricity Authority Chairman Ghanshyam Prasad, speaking at the India Energy Summit, confirmed that the carbon trading platform is progressing as planned. "Carbon trading platform is on track and most likely by September, you'll find that also happening in the country. Probably that will be another driver for RE (renewable energy) to pick up, and particularly in the C&I (commercial and industrial) segments that will be a big driver," he stated.
Prasad highlighted the slow pace of power purchase agreement (PPA) signings for renewable energy projects as a critical challenge. "We found that PPAs are not happening, and if PPAs are not happening, that means we need to have some other construct to do it, and that's how we are trying to explore some kind of a market construct where more and larger capacity can come, and the market can support that," he explained.
Incentive Scheme for Thermal Power Plants to Support Grid Flexibility
In addition to the carbon trading platform, Prasad discussed a proposed incentive scheme aimed at encouraging thermal power plants to reduce their plant load factor (PLF) or capacity utilization. This measure is designed to facilitate the integration and balancing of renewable energy into the national electricity grid.
"We are now at a very fix that if all (power producers) of you say that we cannot flex (adjust power production), then who will flex? So even if you store that energy, somewhere it has to be balanced," he noted, emphasizing the technical feasibility of such adjustments with proper training.
Prasad added, "We are also thinking that we can give them some more incentive for the coal-based generator because they are the big brothers and they have been supporting so far... So we are trying to think some kind of an incentive scheme." He mentioned that a proposal has been submitted to the Power Ministry, which could address concerns in the thermal sector and allow for voluntary PLF adjustments.
Minister Naik Highlights India's Energy Transformation Progress
Minister of State for Power and New & Renewable Energy Shripad Yesso Naik underscored that India's energy transition is an ongoing transformation backed by clear targets and decisive actions. "Under the Prime Minister Mr Modi's vision, India has set an ambitious goal of 500 GW of non-fossil fuel capacity by 2030 and progressing towards Net Zero by 2070," he affirmed.
Naik reported that India's total installed power capacity has exceeded 520 GW, with non-fossil sources contributing more than half. Solar capacity has more than tripled in recent years, positioning renewable energy as mainstream rather than marginal.
"This progress reflects the policy clarity, transparent competitive bidding, expansion of green energy corridors, promotion of ultra mega renewable energy parks, rooftop solar through PM Surya Ghar Yojna, agricultural solarisation through PM KUSUM Yojna, along with a strong push for domestic manufacturing," he detailed.
Future Focus on System Integration and Sustainability
The Minister further elaborated on the National Green Hydrogen Mission, which aims to drive industrial decarbonization, reduce import dependence, and enhance India's role in global value chains. "Sustaining this momentum requires moving beyond capacity addition, the system integration. We must strengthen the transmission network, scale up storage solutions, improve grid flexibility and ensure the financial sustainability of distribution companies. Energy security, affordability and inclusivity must remain at the core of the approach," Naik concluded.
