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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Environment

Sagar Pharma Ltd, an obligated entity under the Energy Conservation Act framework, has no rooftop space for solar plants but wishes to meet its renewable purchase obligation. Which approach is correct?

The company may buy Renewable Energy Certificates on a power exchange to meet its renewable purchase obligation. Own generation is not compulsory. Energy Saving Certificates belong to the efficiency PAT scheme and cannot substitute, and a donation does not discharge the obligation.

  1. AIt must install generation on its own premises, since purchase obligations cannot be met otherwise
  2. BIt may purchase Renewable Energy Certificates on a power exchange to meet the obligationCorrect
  3. CIt may meet the obligation by buying Energy Saving Certificates from PAT units
  4. DIt may ignore the obligation if it pays a voluntary donation to a clean energy fund

Explanation

Obligated entities may meet their renewable purchase obligation by buying renewable power or by purchasing Renewable Energy Certificates traded on power exchanges. Own generation is not mandatory. ESCerts relate to efficiency under PAT and are not a substitute for RECs, and a donation does not discharge the obligation.

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