January 2023 - pmanifold

Carbon Market: Why it matters?

Posted on January 26, 2023May 29, 2025 by pmanifold@admin

Carbon markets are systems that allow for the trading of carbon credits or permits, which represent one metric ton of carbon dioxide (CO2), or an equivalent amount of another greenhouse gas (GHG) that has been reduced or removed from the earth’s atmosphere. It is not necessarily a carbon offset. A carbon credit only becomes a carbon offset when used for carbon offsetting, in other words, compensating for one’s GHG emissions. The idea behind carbon markets is to put a price on carbon emissions, creating an economic incentive for companies and individuals to reduce their emissions and invest in clean energy.

The evolution of carbon markets can be traced back to the 1990s, with the establishment of the first mandatory carbon market, the European Union Emissions Trading System (EU ETS) in 2005. The EU ETS operates as a cap-and-trade system, which limits the total amount of CO2 emissions from power plants and heavy industries and allows companies to buy and sell emissions allowances in order to meet their emissions targets.

In the following years, other countries and regions established their own carbon markets, including the Regional Greenhouse Gas Initiative (RGGI) in the northeastern United States, the Western Climate Initiative (WCI) in North America, and the carbon market established under the United Nations Framework Convention on Climate Change (UNFCCC), known as the Clean Development Mechanism (CDM).

More recently, there has been an increasing interest in using carbon markets as a tool to help countries and regions meet their commitments under the Paris Agreement, which aims to limit global warming to well below 2 degrees Celsius. To this end, various carbon pricing initiatives and schemes have been launched worldwide. Some of them are already operational, such as California Cap and trade, Quebec Cap and trade and in Canada, carbon pricing policies are in place in seven provinces. In addition, there are also voluntary carbon markets, where companies, organizations, and individuals can purchase carbon credits to offset their emissions. These credits represent the reduction or removal of CO2 emissions from projects such as renewable energy or reforestation.

Different carbon pricing initiatives and schemes worldwide | by World Bank: https://openknowledge.worldbank.org/handle/10986/37455

There are several technologies that can be used to generate carbon credits, including:

Different methods can be used to determine the value of a carbon credit, such as market conditions, cost of implementation, or the benefits of the project. The price can also depend on factors such as the type, size, and location of the project. The chart below shows an overview of the prices for different types of credits in the market as of January 2023.[i]

[i]https://8billiontrees.com/carbon-offsets-credits/new-buyers-market-guide/carbon-credit-pricing/

Project Type	Volume Sold (MtCO2e)	Average Price ($)	Price Range ($)
Wind	12.8	1.9	0.3 – 18
REDD+	11	3.3	0.8 – 20+
Landfill Methane	7.9	2	0.2 – 19
Tree planting	3	7.5	2.2 – 20+
Clean cookstoves	3	4.9	2.0 – 20+
Run-of-river hydro	1.5	1.4	0.2 – 8
Water/purification	1.2	3.8	1.7 – 9
Improved forest management	0.8	9.6	2 – 17.5
Biomass/biochar	0.7	3	0.9 – 20+
Energy efficiency -industrial-focused	0.7	4.1	0.1 – 20
Biogas	0.6	5.9	1 – 20+
Energy efficiency-community-focused	0.6	9.4	3.3 – 20+
Transportation	0.5	29	2.2 – 6.8
Fuel switching	0.5	11.4	3.5 – 20+
Solar	0.3	4.1	1 – 9.8
Livestock methane	0.2	7	4.0 – 20+
Geothermal	0.1	4	2.5 – 8
Agro-forestry	0.1	9.9	9.0 – 11.0

Globally, carbon markets have evolved significantly over the past two decades and continue to be an important tool for reducing carbon emissions and combatting climate change. There is an increasing recognition of the need for carbon pricing as a mechanism to drive the transition to a low-carbon economy and many countries, regions and cities worldwide are implementing different form of carbon pricing mechanisms or planning to do so in the future.

The State of Carbon Market in India

India is the world’s third largest emitter of greenhouse gases (GHGs), after China and the US. India has been taking steps to implement a carbon market as part of its efforts to reduce greenhouse gas emissions and combat climate change. In India, carbon credits can be traded through various mechanisms, including the Clean Development Mechanism (CDM), which is an aspect of the United Nations Framework Convention on Climate Change (UNFCCC).

The CDM allows organizations in developed countries to invest in carbon reduction projects in developing countries, such as renewable energy projects in India, in order to offset their own GHG emissions. These investments help to fund the development of clean energy projects in developing countries, while also helping developed countries to meet their own emissions reduction targets.

India has been one of the largest recipients of CDM funding, with a large number of CDM projects registered in the country. These projects include renewable energy projects such as wind and solar power, as well as energy efficiency and afforestation projects. However, the CDM mechanism has been criticized for its lack of transparency, lack of long-term commitment, and failure to achieve large-scale emissions reductions.

Apart from CDM, India has started domestic carbon trading as well through its Carbon Emission Trading Scheme (ETS). It is still in early stage but allows companies to buy and sell carbon credits to other companies with the help of government. Between 2010 and June 2022, India issued 35.94 million carbon credits or nearly 17% of all voluntary carbon market credits issued globally. The market for carbon credits increased by 164% globally in 2021. It is anticipated to reach USD 100 billion by 2030.[i]

However, there are several challenges that need to be addressed in order to establish a functional and effective carbon market in India.

One of the main challenges is the lack of a legal and regulatory framework for carbon trading. While India has announced its intent to establish a carbon market, it has not yet developed the necessary regulations and policies to govern the market. As per BEE recent announcement it is expected that in the year 2023, the framework will be rolled out and the voluntary market will be there. The compliance market will take time because targets and timelines need to be given to the industries. It is also expected the current Perform, Achieve and Trade (PAT) scheme would be transitioned into the compliance market. Moreover, Power exchanges which enable the trading of the energy saving certificates (ESCerts) converted from the excess energy savings, are likely to be the trading platform for carbon credits too, under the carbon market framework.[ii]
Another challenge is the lack of accurate and reliable data on emissions. To establish a functional carbon market, accurate and verifiable data on emissions is necessary to establish baselines, set emissions targets and monitor compliance. However, in India, the lack of monitoring, reporting and verification (MRV) systems and data is seen as one of the major barriers to the successful implementation of a carbon market.
Additionally, the initial setup costs for a carbon market, such as developing and implementing a carbon-pricing mechanism, building the necessary infrastructure and building the necessary systems for monitoring and enforcing compliance, can be substantial, and India lacks the sufficient resources and human capital to fully implement such mechanism. Moreover, the relatively low level of awareness and understanding of carbon markets among stakeholders in India can make it difficult to promote the market and ensure its success.
Many sectors in India are still heavily dependent on fossil fuels and the lack of alternative energy sources as well as the lack of appropriate infrastructure to support alternative energy could make it difficult to implement a carbon market that would reduce emissions effectively.

Amidst the challenges, there are several opportunities for the growth of the carbon market in India, such as government support, the growing renewable energy sector, large emitting sectors, increasing corporate interest, international linkages, innovation, digitalization, domestic demand for carbon offsetting, and private sector participation. These factors create a conducive environment for the expansion of the carbon market in India, which can help address climate change and promote sustainable development

In conclusion, carbon market matters as it plays a vital role in addressing climate change by providing a mechanism to reduce greenhouse gas emissions. By creating a market for carbon, they incentivize companies and individuals to reduce emissions and invest in low-carbon technologies, while also allowing countries and companies to meet emissions reduction targets set by international agreements. They also mobilize private sector funding and expertise to support the transition to a low-carbon economy, promoting sustainable development and economic growth. Therefore, it is crucial to continue to develop and support carbon markets as a means to mitigate climate change.

[i]https://www.deccanherald.com/science-and-environment/carbon-credits-and-india-s-carbon-market-1163828.html

[ii]https://www.livemint.com/news/india/voluntary-carbon-trades-to-start-in-2023-11674498997601.html

Five Innovative Business Models for integration of e-Mobility and RE infrastructure

Posted on January 12, 2023May 29, 2025 by pmanifold@admin

Transport and energy are important for economic growth and social development, but also major emitters of greenhouse gases. Transport emits 23% of energy-related CO₂ and power industry emits 40%^[1]. Hence, decarbonizing these sectors is necessary to limit global warming. Both sectors’ growth can lead to increased fossil fuel dependence and emissions. Making low-carbon energy and transport a priority for sustainable development can mitigate emissions and prevent investment in fossil fuel technologies that may become unviable before their end of life. Renewables, especially solar, wind, hydro and geothermal will play a major role in decarbonizing the power industry. Electrification of transport is a key strategy for reducing transport’s CO₂ emissions.

E-mobility impact on electricity supply

The ability to electrify road transport is determined by the power sector’s capacity to provide reliable electricity, and this, at affordable cost. Beyond the need for additional capacity and grid extension, the two typical challenges of the electricity sector are high losses in transmission and distribution, and grid liability. Transmission and distribution losses are estimated to be roughly 10% (or more in many countries); they often result in either higher consumer prices or higher public expenses to cover utilities’ forgone revenue. Grid reliability is another critical factor and may pose a challenge if many EVs are being charged at the same time.

EV charging loads are anticipated to be very dynamic, with spikes in the demand curve. This can have a serious impact on the distribution network, especially in distribution areas with low available hosting capacity leading to voltage instability, harmonic distortion, power losses and unreliable supply. The impact on the grid can be minimized by introducing discounted tariffs for charging during non-peak hours like Time of Use (ToU) or Time of Day (ToD). Additionally, other EV charging management solutions like battery energy storage system (BESS), smart charging and vehicle-grid integration (VGI) can be used to mitigate the negative impacts of uncontrolled EV charging.

Trends in Renewable Energy and synergies with e-Mobility

In the past decade, renewable energy production per capita has doubled. Bhutan, which is standing out with the highest electricity production per capita in the world (3,026W), sells one hundred percent of their hydropower to neighbouring nations. China, the most populous nation on earth, is the leader in renewable energy. Its RE capacity per capita is 621W, which is 2.5 times the global average. China has six times the RE capacity per capita as India. In Sub-Saharan Africa,’s RE capacity per capita is at 38W.

Increasing renewables’ integration to the grid comes with challenges for the system’s stability such as boosting grid voltage (hampering performance of the connected power equipment like DTs by overloading), injecting harmonics etc. As a result of the intermittent nature of wind and solar generation, capital expenditure in equipment like inverters and storage is needed to reduce peak load, enhance power quality, and store excess power. Integrating storage with RE will increase implementation costs, which could impede the widespread deployment of RE. Employing RE for EV charging further requires additional grid infrastructure leading to increase in grid upgradation costs.

Conversely, integrating a greater proportion of RE sources to the grid for EV charging results in benefits like higher contribution to CO₂ emission reductions; it can also help minimize grid impact challenges. RE with BESS can act as an ancillary support to the grid by storing energy during high RE output hours and supplying power during off-peak hours, enhancing system reliability and resiliency. It also provides reactive power that helps with voltage control thereby improving grid stability and minimize AT&C (aggregate technical and commercial) losses. When using V2X technology, batteries from EVs can act as BESS, supporting RE by storing power and reduce additional storage investments.

Opportunities for growing e-Mobility and RE in synergy

This section outlines opportunities at the intersection of both technologies, and presents various EV charging business models integrating RE. The business models (as shown below), look into different energy models, charging models, vehicle segments and applications.

Business Model 1Captive fleet charging with RE integration for PT e-Buses, ride-hailing, taxis (2W, 3W & 4W) and freight vehicles
Growth rationale	· Globally, there is an increasing shift to public transport (PT) bus systems, to drive operational and financial efficiency and increase fleet size with transition to e-Buses. Also, the ride-hailing freight services market is growing globally and making an economic case for their electrification.· PT e-buses, ride hailing taxis and freight vehicles having access to a dedicated depot in strategic city locations with ample spaces provide easy charging with RE integration opportunity· As the push to freight electrification grows, warehouses make most sense for charging, considering typical logistics profile of hub-and-spoke model or point-to-point, etc. and vehicle’s layover of ~5-6 hours during loading and unloading· Charging fleets with large battery capacities (for buses, trucks) demands more energy which makes a case for integrating with RE to help reduce load on the grid· Big roof tops as well as ground space in depots and warehouses provide opportunities for RE integration for charging. However, given size of fleet and required high MW level charging load (specially in case of e-Buses), captive RE alone may not be sufficient. And there will be a need for remote RE open access or trade offset.
Benefits	· Support peak shaving (reducing load on the grid during peak hours) using RE with BESS for charging thereby reducing grid investment cost required to manage peak demand·Reduce impact on the grid by reducing harmonics and voltage instability and thereby reduce losses in the system· e-Bus/e-Truck batteries provide good stationary RE power backup storage (as BESS) at lower cost given higher daily distance run and battery utilization thereby undergoing faster replacement
Limitations	· High investment cost when using batteries to store RE to power fleet overnight· Scheduling fleet to match charging pattern and RE generation requires suitable locations to install RE on site, alternatively remote access to the grid

Business Model 2Green Public EV charging integration with RE and BESS (including kerb-side charging)
Growth rationale	· Public Charging stations (PCS) gives visibility and confidence to EV users and help curb range anxiety· More and more PCS are getting integrated in existing matured commercial locations like fuel stations (intracity and highways), malls, restaurants, parking etc. These locations typically have real-estate for RE integration.· With many users doing planned home or office charging, more and more PCS use cases including kerb-side charging are moving towards quick opportunity or top-up charging.· Real-estate space at PCS and prevailing high electricity commercial tariffs makes a business case for RE integration. Depending on space availability at the site, 100% RE can be supported with a mix of captive, remote generation wheeled through green open access, and/or RE tradable certificates.· RE plus BESS combined with a grid makes PCS greener. It also reduces both its energy and demand charges. This further integrated with smart chargers will allow PCS operators to align pricing signals with utility given ToU/ToD tariffs and drive EV charging user’s behavioural change.· BESS using repurposed batteries from EVs could further make its deployment with RE more economical
Benefits	· Provides better grid stability and reliability by supporting peak load shaving (reducing load on the grid during peak hours) thereby reducing the required grid investments (in equipment like inverters)· BESS at PCS will provide the necessary back-up power system at the time of grid failure/ outages and act as an ancillary support to the grid
Limitations	· Requires considerable land/ space for deployment (which is a constraint in urban areas)· Need for smart charging solutions to better manage multiple EV charging which also calls for high investments· Low utilization of PCS affects the business economics

Business Model 3Utilities as integrated RE and EV charging as-a-Service provider for homes and offices
Growth rationale	· Both RE and EV economics to end-users are becoming attractive for end-users and their fast proliferation is causing high grid impact. Progressive utilities have hence started facilitating their customers to improve energy efficiency, behavioural or automated demand response (through use of ToU or ToD charging) and solar roof top generation.· In many countries, there is a growing trend of providing solar roof top (SRT) as-a-service (long term PPA) to residential and commercial customers as a RESCO model. Private utilities are playing increasing roles in extending this service to their customers.· Many utilities in the developed countries are extending the charging-as-a-service (CaaS) model to home and office customers, where they are extending investment and/or rebates and hence optimising national cost on public charging infrastructure.· EV charging shifts during high RE output hours for relatively low power e-2Ws and e-cars at home and offices through appropriate ToU and smart charging can optimise further end-user economics and also utility costs for grid expansion.· Low and middle income countries tend to have a high share of inverter and battery power backup systems at homes and offices. These storage assets can be leveraged to charge from captive SRT and then support EV charging later in the day or night. Increasing new power backup systems allowing such high loads (ACs, EVs) running through RE.
Benefits	· Managed and controlled charging can reduce the impact of EV charging on the grid
Limitations	· High investment for utilities to deploy smart technological solutions to monitor real-time integration of RE and EVs

Business Model 4Battery Swapping for Light EV Charging
Growth rationale	· Battery swapping allows the end-user to run EV with a swap battery· Battery swapping charging station is isolated for only swap batteries charging. This allows RE integration including captive at the fuel stations forming key locations to host battery swapping.
Benefits	· Attractive for vehicle operators as swapping does not require time, as charging does· In commercial fleets, it increases fleet utilization, improves logistics delivery timelines, and saves time· Allows separation of batteries and EVs ownership, thereby reducing upfront cost of EVs for the end-user· Provides high asset class business model for new energy operators through improved battery life, grid responsive charging and RE integration· Reduces investments in charging network and centralizes electricity consumption· Allows using batteries as a storage (in a managed manner) and to put power back into the grid· Addresses space constraints in urban areas as multiple batteries can be stack, using less space than parking for charging
Limitations	· High investment cost, high automation, and high inventory of charged batteries· Battery swapping stations demands high energy from the grid to keep the batteries charged round the clock· Need for standardization of batteries (with different technologies) for interoperability without hampering technology upgradation

Business Model 5DRE based Mini/Microgrid powering rural areas and EVs
Growth rationale	· Distributed Renewable Energy (DRE) based Mini/ Micro grids are a solution for supplying 24×7 electricity to many communities without adequate grid service· Financial viability of most mini/ micro grids requires strategies to increase electricity sales· Mini/micro grid need demand loads that can be time-shifted to periods when RE is available else to balance the demand-supply necessitates substantial storage facility· EV having a large on-board energy storage can provide base load to DRE mini/ micro-grids and potentially help mini/micro grid operators improve their economics and expand energy services· DRE based mini/ micro grid can potentially be an EV charging station like a battery swapping station that charges batteries during RE generation and then lease out these batteries to the EV drivers during operations allowing drivers to top up their EVs· DRE based mini/ micro grids can use sources like solar and biogas or even hybrid source of energy (like grid + DRE)
Benefits	· Provide access to affordable and reliable electricity and transport in underserved areas· Reduce loss and wastage of farm produce with increased access to transport· Provide base load to the mini grid improving economics for the operator and low-cost to the end-user· Encourage rural entrepreneurship by powering productive use applications like EVs· Ensure safety by providing power during night using battery storage· Support education by providing access to affordable transportation to schools/ colleges· Ensure seamless delivery of essential services such as healthcare, education (online learning) and internet connectivity due pandemic like situations
Limitations	·High investment cost for deploying minigrids and lack of financing support· Requires regular local maintenance support (skilling) to keep minigrid working for e-Mobility application

(The views expressed in this blog are from a Working Group Paper authored by pManifold team members developed for SUM4All and published at COP27)

More details can be referred from the following link:

ELECTROMOBILITY AND RENEWABLE ELECTRICITY – Developing Infrastructure for Synergies, Chapter 2

Everything you need to know about impact of EV charging on electricity supply in Low-and-Middle-Income Countries (LMICs)

Posted on January 9, 2023May 29, 2025 by pmanifold@admin

The adoption of electric vehicles (EVs) in low and middle-income countries (LMICs) is largely dependent on the ability of the power sector to provide reliable and affordable electricity. In these countries, access to electricity and a stable supply of it are still major concerns, and therefore it is important to consider both the power and transportation sectors together when planning and developing infrastructure for EVs.

Apart from the need for additional capacity and grid extension, the two most common challenges in the LMIC electricity sector are high transmission and distribution losses and grid reliability. In LMICs, these losses are estimated to be around 10%^[1], but they can be much higher in some countries, such as Togo, Haiti, Benin, and the Republic of Congo, where losses can exceed 40%. These losses can result in either higher consumer prices or higher government expenses to compensate utilities for their lost revenue. The adoption of electric vehicles may exacerbate these losses, as they will require additional electricity to charge.

Grid reliability is another important factor to consider in the adoption of EVs in LMICs. If large number of EVs are being charged at the same time, it may strain the grid and cause reliability issues. Experience in countries with a high adoption of EVs has shown that users tend to charge their vehicles during periods of high demand, such as overnight (8pm to 4am) and in the afternoon (11am to 4pm). This may pose a challenge for grid operators in LMICs, as they may need to increase capacity to meet this demand.

The demand curve spike (as a result of EV charging) can have a significant impact on the distribution system and possibly cause voltage instability, harmonic distortion, power losses, and unstable supply. One way to mitigate these negative effects is to implement discounted tariffs, such as Time of Use (ToU) or Time of Day (ToD) tariffs, for charging during off-peak times when demand for electricity is lower. This can help to reduce the impact of EV charging on the grid.

There are also alternative solutions that can be used to reduce the negative effects of uncontrolled EV charging on the grid. These solutions include battery energy storage systems (BESS), smart charging, and vehicle-grid integration (VGI). BESS can store excess electricity generated by the grid or by renewable energy sources and then release it back into the grid when needed, helping to stabilize the supply of electricity. Smart charging involves using algorithms to optimize the timing of EV charging in order to minimize the impact on the grid. VGI involves allowing EVs to act as both a load on the grid (when they are being charged) and a source of electricity (when they are being driven and their batteries are charged).Effective connected load monitoring at the distribution and transmission levels is also critical in managing the difficulties associated with EV charging. This involves monitoring the demand for electricity in real-time and adjusting the supply accordingly in order to maintain stability and reliability.

In the early stages of EV adoption, grid stability may not be a major concern for utilities because the number of EVs on the road will be relatively less. However, as the penetration of EV grows, it will be important for utilities to prioritize load balancing between EV loads and other connected loads in order to reduce the risks of grid instability.

To meet the anticipated growth in demand for both transportation and electricity, it will be necessary to implement integrated policy changes, coordinate planning, and invest in both the energy and transportation sectors. These measures may include requiring the installation of smart meters and allowing the use of EVs for grid services in the commercial sector. By taking a holistic approach to planning and development, it will be possible to ensure that the necessary infrastructure is in place to support the growing demand for EVs.

On the other hand, adoption of EVs offers utilities and Independent Power Producers (IPPs) new business opportunities in the EV value chain. For instance, operators and service providers can use renewable energy (RE) at charging stations, and EV manufacturers can use RE at their facilities. This can aid in decarbonizing the entire EV value chain from manufacturing to recycling. The smart integration of energy storage systems with renewables can increase grid flexibility, reduce fixed demand charges, and make business propositions more attractive by providing low-carbon, reliable, and affordable energy to consumers. Collaboration between the electricity and transportation sectors can also improve energy availability, particularly in rural areas, where the development of renewable-powered micro-grid solutions may be coupled with new demand from electric vehicles.

Although the adoption of EVs may have an impact on the electricity supply in LMICs, there are a number of ways to reduce the risks and fortify the infrastructure with timely government interventions. These interventions may include implementing policies and regulations, providing financial incentives, and investing in research and development to improve technologies and infrastructure.

https://data.worldbank.org/indicator/EG.ELC.LOSS.ZS?locations=XO