The Private Power & Infrastructure Board (PPIB) has formally approached the Ministry of Climate Change (MoCC) to secure approval for a carbon credit sharing mechanism, with the intent of equitably distributing carbon credits between project sponsors and power purchasers.
PPIB is working on the development of Alternative Renewable Energy (ARE) based power generation projects through private sector investments in the Independent Power Producer (IPP) mode.
In a letter addressed to the Secretary of the Ministry of Climate Change, Shah Jahan Mirza, the Managing Director of PPIB, emphasized the revenue potential inherent in ARE projects through the sale of carbon credits under the Clean Development Mechanism (CDM) and other regulatory frameworks.
Mirza pointed out that the first Renewable Energy Policy of 2006 outlined a carbon credit sharing mechanism, mandating the equitable distribution of revenues generated from the sale of carbon credits between project sponsors and power purchasers.
In the absence of a clear policy directive on the matter, he requested the Ministry to provide consent for a carbon credit sharing mechanism, ensuring an equal distribution of revenues between project sponsors and power purchasers.
As part of its current endeavors, PPIB is actively advancing a 600-MWp solar PV project in Kot Addu/ Muzaffargarh, Punjab, employing competitive bidding. This initiative aligns with the overarching objective of substituting costly thermal power generation with solar PV energy, as per the Framework Guidelines for Fast-Track Solar PV Initiatives 2022. The Energy Purchase Agreement (EPA) for this project, which has received standard approval, stipulates the processing of carbon credits in accordance with the prevailing government policy.
In light of the jurisdiction of carbon crediting mechanisms falling under the purview of the Ministry of Climate Change, the Managing Director of PPIB has formally sought clarification and insights from the ministry. The objective is to determine the applicable policy and mechanism concerning the processing and ownership of revenue generated through the sale of carbon credits by ARE projects.
