Renewable energy can be defined as those energies that cannot be depleted. In pursuit of promoting green growth in the country, India is strongly changing its energy policies and strategies in support of the technologies concerning Renewable Energy. India has been one of the first countries in framing regulations for the growth of the renewable energy sector, as well as in laying foundations for institutional structures.
This blog post focuses on the legislative and regulatory framework relating to renewable energy in the international and national regime, the role of intellectual property rights in the generation of renewable energy, and its legal protection along with advantages and disadvantages for the same.
Renewable Energy – Meaning and Sources
Renewable energy is energy that is continuously generated through natural processes. Renewable energy can be defined as those energies that cannot be depleted. The significance of renewable energy cannot be overstated. These energy sources differ from fossil fuels such as petroleum, coal, and natural gas. Examples of renewable energy are wind energy, solar energy, geothermal energy, hydropower, and biomass energy.
According to a 2016 analysis by REN21, thecontribution of renewable energy resources to worldwide energy consumption was 19.2% in 2014 and 23.7% in 2015. Numerous nations have begun investing in these renewable energy resources since they contribute to the maintenance of sustainable development. Approximately 286 billion dollars were invested in 2015, with biofuel, solar power, wind, and hydroelectricity as the leading sectors.
In contrast to conventional energy resources, which are typically concentrated in a small number of nations, such as oil and gas in the Middle East, renewable energy resources are dispersed across a large geographical area. The utilization of renewable energy resources in energy generation has a substantial impact on economic advantages and energy security, in addition to reducing pollution.
Legislative and Regulatory Framework relating to Renewable Energy: International Perspective
In today’s society, the majority of socioeconomic issues are solely related to the energy industry. The international community has acknowledged the effectiveness of renewable energy in mitigating climate change, its ability to offer energy security, and its contribution to economic growth through the ratification of numerous international treaties and instruments. In the recent past, worldwide planning and policy formation for renewable energy has gained a great deal of importance and are seen as a potent factor in shaping national energy legislation. The increasing international significance of renewable energy can provide a conducive atmosphere for global green growth. Through international agreements and treaties, states might be obligated to create effective rules and regulations to support the deployment of renewables in their respective nations. The expansion of the Renewables Sector in India is partly a result of measures done by the world community, in which India has been involved. In accordance with Article 253 and Article 51C of the Indian Constitution, India has enacted effective domestic rules implementing these international principles. However, this is not the case in all nations, as the majority of renewable energy agreements are soft and non-binding, and hence these activities are not automatically obligatory on the parties.
The “UN General Assembly Resolution – A/RES/36/196” in 1981 on the eventual “UN Conference on New and Renewable Sources of Energy” affirmed the immediate need for adopting effective measures to assist the advancement of new and renewable technologies for energy production in developing nations. The conference also adopted the “Nairobi Programme of Action for the Development and Utilization of New and Renewable Sources of Energy,” whichidentifies four key areas for determined and cooperative action: (a) Energy assessment and planning; (b) Research, development, and demonstration; (c) Transfer, alteration and application of mature technologies; (d) Information streaming, education and training”.
The United Nations Conference on Environment and Development (UNCED), also known as the Rio Conference or Earth Summit, addressed some global issues, such as the use of alternative energy sources to replace fossil fuels, which are primarily responsible for global climate change and environmental issues. The Conferenceadopted a few principles with a clear significance for the renewables industry. Principle 2 of the Conference addresses the incorporation of the sovereign rights of nations over natural resources and forbids the transboundary harms caused by the exploitation of resources. Principle 10 focuses on the realization of justice and access to information on environmental issues. Principle 17 provides for environmental impact assessments (EIA) of the projects, where the projects with high utilization of fuels posing environmental threats can be avoided. Therefore, these are some principles that indirectly urge upon the utilization of renewable resources.
Legislative and Regulatory Framework relating to Renewable Energy: National Perspective
India has been one of the first countries in framing regulations for the growth of the renewable energy sector, as well as in laying foundations for institutional structures. Some of the policy developments and regulatory frameworks that supported renewable energy expansion in India include “National Electricity Policy 2005”, “National Tariff Policy 2006”, “Integrated Energy Policy 2006”, “National Action Plan on Climate Change (NAPCC)” and promotional regulatory mechanisms like “Renewable Energy Purchase Obligation (RPO)”, “Renewable Energy Certificate (REC) Mechanism”, Tariff regulations, Net metering regulations for decentralized rooftop solar projects.
Article 21 of the Indian Constitution enshrines environmental protection and encourages sustainable development as a fundamental right. In addition,Article 48-A of the Directive Principles of State Policy of India, which is non-binding but serves as the guiding principle for policy formulation, states that the State should endeavor to safeguard and improve the environment. In addition,Article 51-A(g) imposes a fundamental duty on all Indian citizens to protect the natural environment.
In addition, the Supreme Court of India has alreadyacknowledged the constitutional responsibility to promote renewable energy, citing Article 21 and Article 51-A (g). Increasing the proportion of renewable resources in the energy sector through effective policy and regulation is the revolution to which this articleadheres. For the division of responsibilities and authorities regarding the formulation of policies and regulations on the subject, the character of our current constitution might be considered. India is a quasi-federal constitutional arrangement where legislative and executive powers are divided between the Centre and states. The 7th Schedule of the Constitution has three lists of subjects over which the Centre and the States may exercise their legislative authority.
Union List (List I)stipulates that only the Central government has the authority to legislate on certain topics, while the State List (List II)stipulates that states have the authority to legislate on certain topics, and the Concurrent List (List III)stipulates that both the Central and State Governments have the authority to legislate on certain topics. Electricity is aconcurrent issue under List III, therefore both the Central government and the states can initiate legislation on this topic.
India has abundant renewable energy resources and claims to have pioneered major programs for the deployment of clean energy resources and infrastructures. The Energy Crisis of the 1970s and the concern about Energy securityprompted India to utilize alternative energy sources, which resulted in the launch of various renewable energy schemes in India. With the establishment of the Commission for Additional Sources of Energy (CASE) in 1981, the planned initiative on the subject got underway. The commission was charged with formulating policies and plans for the expansion of renewable energy deployment across the nation.
Following the year in 1982, the CASE was incorporated into the newly set up Department of “Non-Conventional Energy Sources” to undertake necessary measures in the area of alternate sources of energy. The department was exalted to a discrete ministry named “The Ministry of Non- Conventional Energy Sources” (MNES) in the year 1992 and furtherrenamed to the “Ministry of New and Renewable Energy” (MNRE) in 2006. With this India became the world’s first nation to establish a such special ministry for the expansion and growth of the renewable energy sector. Today this ministry is considered the nodal department in the promotion of renewable energy in India. The mission of the Ministry is to ensure energy security, to provide energy affordability as well as its availability, and to develop the atmosphere of energy equity by increasing the share of Renewable and Non-conventional sources of Energy. Several institutions are working under MNRE and supporting it to accomplish this mission.
The five specialized technical institutions working in the area are namely, the Indian Renewable Energy Development Agency (IREDA) in New Delhi, the National Institute of Solar Energy in Gurugram, Haryana, the National Institute of Wind Energy (NIWE), in Chennai, Tamil Nadu, Sardar Swaran Singh National Institute of Bio-Energy (SSS-NIBE) in Kapurthala, Punjab and Solar Energy Corporation of India Ltd.
Regulatory Framework for Promotion of Renewables in India
Electricity Act, 2003
The Electricity Act, of 2003 regulates the nation’s energy sector and also contains provisions aimed at expanding renewable energy in India.
The Actestablished the “Central Electricity Regulatory Commission (CERC)” and the “State Electricity Regulatory Commissions (SERCs)” to regulate the distribution, generation, and transmission of electricity in accordance with the authority and powers granted to them by the Act. Several parts of the Act promote and expedite the development of nonconventional energy-based power generation.
Section 3(1) of the Act states that the “Government of India shall, from time to time, prepare the National Electricity Policy and Tariff Policy, in consultation with the State Governments for developing the power system based on optimal utilization of resources such as coal, natural gas, nuclear, hydro, and renewable sources of energy.” Therefore, it can be inferred from section 3 of the Act that while formulating national electricity policies, renewables shall also be given consideration with the other conventional sources of energy, but the section does not call for giving priority to renewables in national policies over conventional sources. Whereas Act alsoprovides that, the “Government of India shall, after consultation with the State Governments, prepare a national policy, permitting stand-alone systems (including those based on renewable sources of energy) for rural areas”. Further “Section 86 (1)(e)” of the Act provides that the State Commission shall encourage the generation of electricity from renewables. Further State Commissions are directed to provide adequate measures for integrating renewable energy with the grid, measures for the sale and purchase of electricity produced from renewable energy sources, and specify the ratio of the total utilization of electricity from renewables.
National Electricity Policy, 2005
After the passage of the Electricity Act of 2003, policy tools at the national level, such as theNational Electricity Policy (NEP) enacted in 2005, began to give renewable energy sources greater weight. The policy also reconsidered the necessity of promoting eco-friendly renewable energy sources for electricity generation. In line with this purpose, the policystipulated that measures would be implemented to reduce the primary cost of renewable energy projects by fostering market competition among similar endeavors. The strategy also stipulated that the SERCs would assist the generation of electricity from non-conventional sources and called for theestablishment of effective targets for the deployment of renewable energy.
National Tariff Policy, 2006
The “National Tariff Policy (NTP)” was established in 2006, shortly after the “National Electricity Policy,” to direct Central and state regulators in tariff determination. The Tariff Policy required distribution companies to purchase renewable energy at preferential rates as determined by the competent commission. The Policy also stipulated that the competent commission shall establish a minimum percentage of energy to be obtained from renewable energy sources, taking into account the availability of such resources in the region and their influence on retail pricing.
Integrated Energy Policy, 2006
The “Integrated Energy Policy” was launched in August 2006 and covers a variety of energy-related factors, including energy security, accessibility, affordability, and efficiency. The policy was founded on the concept of making India self-sufficient in the energy sector to meet rising demand, as well as exploring the resources sustainably and cost-effectively. Regarding renewable energy, the policy must develop and implement effective strategies to promote diverse renewable sources, such as Mini Hydro, Wind Power, Bio Gas, and Solar Thermal Water Heaters.
National Action Plan on Climate Change (NAPCC)
India published its “National Action Plan on Climate Change” (NAPCC) in June 2008, outlining its current and future climate change mitigation measures. This action plan was submitted to the “United Nations under the United Nations Framework Convention on Climate Change (UNFCCC)” as part of India’s “Intended Nationally Determined Contribution” (INDC), which demonstrates the country’scommitment to the urgent and decisive need to change and modify policies in the concerned areas.
National Offshore Wind Policy, 2015
The “National Offshore Wind Energy Policy” was issued by the Cabinet in September 2015 to stimulate and incentivize the development of offshore wind energy installations. The policy’s objectives are to analyze and establish Offshore Wind Farms in the Exclusive Economic Zone, to facilitate funds to private organizations as well as global corporations of other nations to finance and establish these farms, to provide maintenance for the coastal setup and support large constructions, and to encourage financial investment in the Power Sector tofacilitate the development of offshore wind farms among other objectives.
Role of IPR in the Renewable Energy Sector
Patents, just like in other industries, play an important part in the process of preserving intellectual property rights in the technological realm. Patents provide businesses with temporary exclusive rights that allow them to collect a percentage of the added value of their inventions and the investments made to develop and promote them. They act as signs of worth, notably for investors and future partners. Multiple forms of technological collaboration and sustainable alliances are fostered by patents, which improves technological diffusion and development. For instance, coordination between the government and startups could aid in solving climate-related challenges while supporting the rise of small businesses. The University of Cambridge (2019)found that the patenting activity of new green technology startup firms in the United States increases by over 73% on average anytime a government agency collaborates on green-tech development. Awarded patents also assist in the rationale of technological spending. Solar and wind energy continue to get the majority of investments within the realm of renewable energy. For instance, a survey that was conducted in 2020 by the World Intellectual Property Officediscovered that more than half of the patent applications that were connected to renewables were related to solar, with the next biggest proportion (about 25%) being related to wind.
Each time a patent is produced, the recompilation of patents produces a library comprising the most innovative and dependable technological information. It becomes a repository of information and skills that may be used by other entities in the regionalization of technologies, such as the solar energy technology generated in the United Kingdom that may be adapted to nations like Egypt and Libya which have vast solar energy resources.
In addition to patents, many businesses that focus on renewable energy will use trade secrets and sensitive information on various parts of the necessary hardware, as well as how they manufacture and deploy it. These will be tightly guarded by corporations. This may include sensitive design documents, the outcomes of data interpretation and analysis, or the algorithms and software programs that were designed specifically for this purpose.
Wind and Solar Energy
The turbine is an essential part of the process of generating electricity from wind power, hence it should come as no surprise that turbine technology is a strongly copyrighted technical area that will invariably be the subject of patent litigation.
For instance, earlier this year the engineering giant General Electric recentlybrought a patent infringement action in the UK High Court against its competitor Siemens Gamesa Renewable Energy. The action concerned a method for keeping wind turbines connected to power even if the grid voltage temporarily drops so that the critical pitch of the blades can still be controlled. The method was developed by General Electric. Siemens Gamesa Renewable Energy is a competitor of General Electric.
If Siemens is successful in defending this claim, the company could have the opportunity to continue supplying its turbines to other big wind farm projects in the UK. Patent battles are not easily settled, and even if Siemens is victorious, there may be delays that incur additional expenses. If Siemens is unsuccessful, the company will be forced to deal with the typical difficulties of creating a workaround solution or possibly paying an adequate license cost.
Solar power, on the other hand, could be said to be different from wind power in the sense that solar energy companies in Europe will frequently buy in the hardware they require rather than manufacture it themselves, and will instead concentrate their expertise on the design and development of projects.
This indicates that manufacturers may obtain patent rights on various aspects of their hardware, and it is the responsibility of the solar energy provider to seek appropriate contractual protections and licenses in the relevant procurement contracts. These may include all necessary software licenses and an indemnity about any third-party intellectual property infringement claims brought about as a result of the solar energy provider’s deployment of the hardware in a new field.
The solar company would then develop and protect its in-house know-how around design optimization. This would include what factors to consider when selecting a site, the topography of the solar array, storage, and design, as well as project development and asset management. The company would use this know-how to differentiate itself from the competition and would develop and protect this know-how internally.
Collaboration on Several Projects
When it comes to the establishment of huge projects, another difficulty that is not specific to this business is figuring out how to work with R&D partners, whether they come from university or industry, as well as JV partners or service companies. It is of the utmost importance to ensure rigorous contractual management of the exchange (or non-exchange) of existing information and intellectual property rights between parties, as well as the management of ownership and use rights for any newly produced intellectual property. If an important invention were to be published without authorization at the wrong time, it could lose its novelty as well as the possibility to gain an exclusive position via a patent, or it could in some other way reduce a company’s advantage over its competitors.
For instance, a company that specializes in solar energy would find it necessary to hire engineering, procurement, and construction contractors. To instruct the contractor, it will probably be necessary for it to share design documents as well as other confidential information. The service contract will need to have appropriate secrecy and restricted use arrangements in place, and the solar company will still need to be selective about what it shares with a contractor to carry out the project.
Technology is not the only factor under consideration here. Reputation is of the utmost importance, arguably more so than it has ever been, for energy companies that are looking to chart a successful course through the energy transition. These companies must capitalize on their ‘green’ credentials to maintain their societal license to operate. This can be accomplished through responsive dialogue with local communities and active support of the global sustainability agenda.
Copyright, trademark, and design right protection of names, logos, packaging, and broader branding will all play important roles for firms in the renewable energy sector, as well as concerted measures to prevent counterfeiting, vigilance on the internet and social media, and so on.
Managing their reputation and brand alongside the deployment of technology, from energy generation to storage, distribution, and ultimately used by the consumer is one of the primary objectives of businesses that focus on renewable energy sources. The creation, protection, and exploitation of intellectual property provide fundamental support for these objectives at each stage of the cycle.
Protecting Trade Secrets
In every nation, trade secrets play a significant role in the dissemination of green technology. Trade secrets consist of sensitive knowledge that is either unpatentable or expertly preserved as trade secrets in place of patenting. It is always economically valuable. Trade secrets play a critical role in securing the channels for know-how exchanges by ensuring a secure environment for the distribution of private information. For instance, the US Government hastaken action in response to Chinese corporations’ theft of trade secrets from renewable energy companies such as Solar World and American Superconductor Corporation. Trade secrets often protect tacit information relating to the application, improvement, and adaption of patented technologies. Trade secrets linked to green technologies are projected to be crucial for both industrialized and emerging nations that must adapt green technologies to local conditions.
Without effective trade secret protection, businesses may find themselves dedicating large resources to the physical security of their trade secrets rather than investing in technology innovation. There is a known beneficial relationship between R&D spending and greater trade secret protection.
Since the early 2000s, the Clean Energy Patent Growth Index has observed an increase in green patent applications globally, with the majority focusing on alternative and renewable energy sources, such as wind, sun, geothermal, hybrid vehicles, and biofuels. The French green chemistry startup Carbios was recentlyissued a patent for a biotechnological process that facilitates the recycling of PET plastic garbage, which serves as an illustrative example.
The protection of intellectual property supports the development, acceptance, and spread of green technologies. It is necessary to accept a transition towards a more sustainable lifestyle based on green technology, as part of the development of new global environmental laws and increased protection of intellectual property rights is an indispensable feature of this process.
Advantages of IPR in the Renewable Energy Sector
The primary purpose of intellectual property rights is to promote innovation and creativity by compensating inventors and creators for their work and for sharing the technological information of their innovations with the public, which catalyzes new ideas, further advancements, and improvements that can then be made by anyone.
Those who possess IP rights can also prevent others from duplicating or using their IP without permission. This allows rights holders to secure their investment, gain a competitive edge, and generate cash by charging for the usage of their intellectual property. These proceeds can be used to fund subsequent R&D and promote business expansion and employment. The possibility of financial gain motivates firms to invest in producing environmentally and socially good innovations and branded products and services.
There have also been calls for worldwide IP sharing and for businesses to establish a balance between IP protection and investment in green energy. Companies can leverage IP rights in a variety of ways; for instance, they can seek a return on the resources they invest in developing greener outputs through commercialization and licensing programs, while also sharing aspects of the resulting IP through non-commercial exploitation or open-source-like arrangements. If a firm wishes for its creation to remain in the public domain, protecting intellectual property rights can assure that no third party can economically use the invention without the company’s permission.
As the global pursuit of sustainable solutions continues, corporate strategies and governance that include intellectual property (IP) strategy on the required use, protection, and risk mitigation of energy transition innovation will be key factors in the successful development and deployment of these new technologies.
Some of the most important difficulties and hazards that will need to be comprehended and addressed as part of energy transition projects will be:
(i) Intellectual property ownership, particularly in partnership with research and development (R&D) partners, whether from academia or business, joint venture partners, or service providers;
(ii) The extent and adaptability of rights and responsibilities; and
(iii) Infringement risks — safeguarding against potential infringement of third-party intellectual property rights to prevent project disruption.
As enterprises in this industry concentrate on developing new products and services, protection measures will inevitably expand. Patents, as is typical in other industries, play a major role in the protection of technology. Numerous new patents relevant to the design, production, and operation of wind turbines have resulted from the R&D efforts of key wind-power businesses. Batteries, motors, controllers, chargers, charging infrastructure, wireless electric car charging, and testing equipment are being patented as a result of the ongoing expansion of the electric vehicle sector. In addition to patents, trade secrets, copyright, and confidential information on various aspects of data interpretation and analysis, algorithms and software, as well as the production and deployment of these technologies, are valuable protection forms.
Design rights are also highly complementary to other intellectual property rights, as they provide a straightforward method for protecting the aesthetic appearance of a new object. Lastly, companies seeking to promote their green credentials are applying for trademark protection with the launch of new products and services, but care should be taken before definitively selecting those names – obtaining clearance to avoid using identical or confusingly similar names that may already be in use by competitors will prevent future complications. In addition, descriptive product names for the attributes of the items or the usage of terms such as “green” or “eco” may not be protectable.
Accelerating the development and deployment of renewable energy technologies (RETs) requires innovation throughout the whole technology life cycle, from basic research to commercialization. The Indian Renewable Energy Development Agency should assess different instruments that promote RET innovation, focusing in particular on patents, standards, technology transfer, and cooperation in research, development, and demonstration. The efficient use of such instruments will benefit RET innovation. The role of patents in RET innovation is not well understood by many policymakers. In cooperation with relevant partners, IREDA should continue to develop a better understanding of the role of patents in RET innovation. Making patent information more accessible may help accelerate innovation. Patent information can be made more accessible and easier to understand and available to the citizens at large, for the benefit of the people as well as the nation.
The views expressed in this article are the original views of the author. The Journal has no contribution to the ideas expressed.
About the Author
Ms. Ananya Chattopadhyay is a Legal Executive at the Rajwada Group.
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Preferred Method of Citation
Ananya Chattopadhyay, “Role of IPR in the Generation of Renewable Energy” (IJPIEL, 1 December 2022)