As the world’s 4th largest polluter, India is making plans to reduce energy use and emissions that cause global warming with an energy management plan, opening a market in trading energy-saving credits that may reach the equivalent of $16 billion in Indian rupees, over the next five years.
The Indian government released its plan in April to aim for saving 23 million metric tons of oil in the next 5 years through reducing energy consumption in high-power consuming industries. It plans to refund upto half of unpaid loans granted to companies that invest in building retrofits, building automation and other energy-efficient projects such as systems integration.
India will award credits to businesses reaching and exceeding the goals set for energy efficiency. These credits may be traded on power exchanges with companies failing to reach the targets.
In order to meet the current demand for power, India is in need of power capacity additions of nearly 20,000 megawatts. The National Mission on Enhanced Energy Efficiency has a goal to avoid adding power capacities, and wants to lower carbon dioxide emissions growth by nearly 100 million tons per year. According to power ministry data, this amount is one tenth of the current annual emissions.
By the end of March, the Indian government plans to have efficiency targets set for companies, and is in talks with two of the country’s power exchange companies, Indian Energy Exchange Ltd. and Power Exchange India Ltd. to set up trading protocols.
With this new energy exchange trade program, India expects to meet its goal of lowering carbon use by as much as 20% from the emissions levels in 2005 to the numbers they will be at in 2020. One stumbling block on a global level is how 194 nations refused to sign to binding goals towards the reduction of carbon dioxide.
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