Q.1 What is the primary purpose of a Renewable Portfolio Standard (RPS)?
To set a minimum price for renewable electricity
To require utilities to procure a specified percentage of electricity from renewable sources
To subsidize fossil fuel plants
To impose carbon taxes on industries
Explanation - An RPS mandates that a certain share of a utility’s electricity sales must come from renewable resources, encouraging market growth for renewables.
Correct answer is: To require utilities to procure a specified percentage of electricity from renewable sources
Q.2 Which policy mechanism guarantees a fixed payment per kilowatt‑hour for renewable electricity fed into the grid?
Carbon tax
Net metering
Feed‑in tariff (FiT)
Cap‑and‑trade
Explanation - Feed‑in tariffs provide a long‑term, fixed price for renewable electricity, ensuring revenue certainty for project developers.
Correct answer is: Feed‑in tariff (FiT)
Q.3 Net metering primarily benefits which group of electricity consumers?
Large industrial generators
Residential and small commercial rooftop solar owners
Coal power plant operators
Wind turbine manufacturers
Explanation - Net metering allows owners of small renewable systems to offset their electricity consumption with generation, receiving credits for excess electricity sent to the grid.
Correct answer is: Residential and small commercial rooftop solar owners
Q.4 Which of the following best describes the Levelized Cost of Electricity (LCOE)?
The total capital cost of a plant divided by its annual output
The average cost per kilowatt‑hour of building and operating a power plant over its lifetime
The market price of electricity on a given day
The tax credit received for renewable projects
Explanation - LCOE aggregates all costs (capital, O&M, fuel, financing) and spreads them over the expected electricity generation, allowing comparison across technologies.
Correct answer is: The average cost per kilowatt‑hour of building and operating a power plant over its lifetime
Q.5 A carbon price set at $30 per ton of CO₂ primarily aims to:
Increase the profitability of coal plants
Internalize the external cost of carbon emissions
Fund nuclear power research
Eliminate renewable energy subsidies
Explanation - By assigning a cost to carbon emissions, a carbon price makes polluting activities more expensive, encouraging cleaner alternatives.
Correct answer is: Internalize the external cost of carbon emissions
Q.6 Which financing model involves a third‑party owner installing a solar system on a customer's roof and selling the electricity at a fixed rate?
Power Purchase Agreement (PPA)
Debt‑equity financing
Feed‑in tariff
Green bond issuance
Explanation - In a PPA, the developer owns the system and the customer purchases the generated electricity, often at a lower rate than grid electricity.
Correct answer is: Power Purchase Agreement (PPA)
Q.7 Which policy instrument creates tradable certificates that represent a megawatt‑hour of renewable electricity generation?
Renewable Energy Certificates (RECs)
Carbon offsets
Emission trading allowances
Green tariffs
Explanation - RECs are marketable instruments that certify the generation of renewable electricity, allowing compliance with RPS or voluntary purchases.
Correct answer is: Renewable Energy Certificates (RECs)
Q.8 In cost‑benefit analysis of a wind farm, which of the following is typically considered a positive externality?
Noise pollution
Visual impact
Reduced greenhouse‑gas emissions
Increased bird mortality
Explanation - Lower GHG emissions benefit society by mitigating climate change, representing a positive externality not captured in market prices.
Correct answer is: Reduced greenhouse‑gas emissions
Q.9 Which of the following best defines a ‘grid‑integration cost’ for renewable energy?
The cost of constructing the renewable plant itself
The expenses associated with connecting and managing variable generation on the grid
The price of fossil fuel inputs
The tax paid on renewable electricity sales
Explanation - Grid‑integration costs include upgrades to transmission, storage, and ancillary services needed to accommodate intermittency.
Correct answer is: The expenses associated with connecting and managing variable generation on the grid
Q.10 What is the main economic rationale for governments to offer Investment Tax Credits (ITC) for solar projects?
To increase tax revenue immediately
To lower the upfront capital cost and accelerate deployment
To raise the price of solar electricity
To fund fossil‑fuel research
Explanation - ITCs reduce the net cost of investment, improving project economics and encouraging faster adoption of solar technology.
Correct answer is: To lower the upfront capital cost and accelerate deployment
Q.11 Which of the following statements about ‘cap‑and‑trade’ systems is correct?
They set a fixed price for carbon emissions
They establish a maximum allowable emission level and allow trading of permits
They provide subsidies to renewable generators
They guarantee a minimum output from renewable plants
Explanation - Cap‑and‑trade caps total emissions and distributes tradable allowances; firms can buy/sell permits based on their emissions performance.
Correct answer is: They establish a maximum allowable emission level and allow trading of permits
Q.12 The term ‘levelised avoided cost of electricity (LACE)’ is used to:
Measure the cost of building a new coal plant
Compare the cost of renewable electricity to the cost of the next best alternative generation
Calculate the price of electricity on the wholesale market
Determine the tax incentive for renewable projects
Explanation - LACE represents the cost of the cheapest alternative to meet demand, serving as a benchmark for evaluating renewable projects.
Correct answer is: Compare the cost of renewable electricity to the cost of the next best alternative generation
Q.13 Which of the following is a common barrier to renewable energy adoption in developing countries?
Abundant cheap fossil fuel subsidies
High levels of grid interconnection
Low demand for electricity
Excessive renewable resource availability
Explanation - Subsidies lower the cost of fossil fuels, making renewables less competitive and hindering investment.
Correct answer is: Abundant cheap fossil fuel subsidies
Q.14 A ‘green bond’ is primarily used to:
Finance projects that have positive environmental benefits, such as renewable energy
Raise money for military spending
Subsidize gasoline consumption
Fund coal mining operations
Explanation - Green bonds are debt instruments earmarked for environmentally friendly projects, attracting investors interested in sustainability.
Correct answer is: Finance projects that have positive environmental benefits, such as renewable energy
Q.15 What does the term ‘intermittency’ refer to in the context of renewable energy?
The ability of a plant to operate continuously without downtime
The variability of power output due to fluctuating resource availability
The fixed output of nuclear power
The cost of maintaining power lines
Explanation - Intermittency describes how solar and wind generation depend on weather conditions, leading to non‑steady power supply.
Correct answer is: The variability of power output due to fluctuating resource availability
Q.16 Which economic metric captures the total net benefit of a renewable project to society, including externalities?
Internal Rate of Return (IRR)
Net Present Value (NPV) with externalities
Payback period
Simple cash flow
Explanation - Including externalities in NPV adds the monetary value of social benefits (e.g., reduced pollution) to the project's cash flows.
Correct answer is: Net Present Value (NPV) with externalities
Q.17 In a deregulated electricity market, renewable generators typically sell power through:
Long‑term bilateral contracts
Feed‑in tariffs only
Spot market and power purchase agreements
Direct subsidies from the government
Explanation - Deregulated markets allow generators to sell electricity on the spot market or via PPAs rather than relying on regulated tariffs.
Correct answer is: Spot market and power purchase agreements
Q.18 Which of the following policies directly targets the reduction of greenhouse gas emissions rather than renewable deployment?
Renewable Portfolio Standard
Carbon tax
Solar Investment Tax Credit
Net metering
Explanation - A carbon tax puts a price on CO₂ emissions, incentivizing lower‑carbon choices across all sectors.
Correct answer is: Carbon tax
Q.19 A 'capacity factor' of 30 % for a wind farm means:
The farm operates at 30 % of its nameplate capacity on average over a period
30 % of the turbines are offline
30 % of the electricity is sold to the grid
The farm produces 30 % more than expected
Explanation - Capacity factor is the ratio of actual energy produced to the maximum possible output if operating at full capacity continuously.
Correct answer is: The farm operates at 30 % of its nameplate capacity on average over a period
Q.20 Which of the following is NOT a typical component of the Levelized Cost of Electricity (LCOE) calculation?
Capital expenditures (CAPEX)
Operations and maintenance costs (O&M)
Fuel costs for wind turbines
Financing costs
Explanation - Wind turbines have no fuel cost; LCOE for wind includes CAPEX, O&M, and financing but not fuel.
Correct answer is: Fuel costs for wind turbines
Q.21 What is the main goal of a ‘clean energy standard’ (CES)?
To set a minimum price for electricity
To mandate a specific share of low‑carbon electricity generation
To increase taxes on renewable energy
To subsidize coal power plants
Explanation - A CES requires utilities to supply a defined portion of electricity from low‑carbon sources, which can include renewables, nuclear, and CCS.
Correct answer is: To mandate a specific share of low‑carbon electricity generation
Q.22 Which term describes the economic value of avoided health costs due to reduced air pollution from renewable energy?
Social discount rate
External cost
Health co‑benefit
Marginal cost of electricity
Explanation - Health co‑benefits capture the monetary savings from fewer pollution‑related illnesses when fossil fuel use declines.
Correct answer is: Health co‑benefit
Q.23 In a renewable auction, the winner is typically the bidder who:
Offers the highest subsidy request
Provides the lowest price per megawatt‑hour
Has the largest installed capacity
Operates the oldest technology
Explanation - Competitive auctions award contracts to developers who propose the lowest price for delivering renewable electricity.
Correct answer is: Provides the lowest price per megawatt‑hour
Q.24 Which of the following best explains the term ‘grid parity’?
When renewable electricity costs the same as or less than grid electricity from conventional sources
When renewables provide 100 % of a region’s electricity
When the grid has zero emissions
When all power plants are owned by the government
Explanation - Grid parity indicates that renewables are economically competitive without subsidies.
Correct answer is: When renewable electricity costs the same as or less than grid electricity from conventional sources
Q.25 The term ‘social cost of carbon’ (SCC) refers to:
The market price of carbon credits
The total economic damages per ton of CO₂ emissions
The cost of carbon capture technology
The tax paid per ton of carbon
Explanation - SCC estimates the monetary value of climate change impacts caused by emitting one additional ton of CO₂.
Correct answer is: The total economic damages per ton of CO₂ emissions
Q.26 Which financing structure involves raising capital by issuing bonds that are specifically earmarked for renewable projects?
Corporate bond
Green bond
Convertible note
Municipal bond
Explanation - Green bonds attract investors seeking environmentally responsible investments and fund renewable or other clean projects.
Correct answer is: Green bond
Q.27 In the context of renewable energy policy, ‘additionality’ means:
The extra cost of renewable projects
The extent to which a project would not have occurred without the policy incentive
The additional power generated by solar panels over wind turbines
The increase in electricity tariffs for all consumers
Explanation - Additionality ensures that incentives lead to new renewable capacity rather than subsidizing projects that would have happened anyway.
Correct answer is: The extent to which a project would not have occurred without the policy incentive
Q.28 A 'capacity market' primarily aims to:
Set the price of carbon emissions
Guarantee payment for available generation capacity to ensure reliability
Sell renewable energy certificates
Provide subsidies for electric vehicles
Explanation - Capacity markets compensate generators for maintaining capacity that can be called upon during peak demand, supporting grid reliability.
Correct answer is: Guarantee payment for available generation capacity to ensure reliability
Q.29 Which of the following is a direct economic advantage of distributed solar PV for a homeowner?
Reduced water consumption
Lower electricity bills through self‑consumption
Increased property taxes
Higher maintenance costs
Explanation - By generating electricity on‑site, homeowners can offset the electricity they would otherwise purchase, reducing bills.
Correct answer is: Lower electricity bills through self‑consumption
Q.30 What does a ‘power purchase agreement’ (PPA) typically specify?
The price and duration for which a buyer will purchase electricity from a generator
The amount of carbon tax a plant must pay
The design standards for wind turbine blades
The subsidy rate for fossil fuel plants
Explanation - PPAs lock in a contractually agreed price and term, providing revenue certainty for the renewable project.
Correct answer is: The price and duration for which a buyer will purchase electricity from a generator
Q.31 In policy terms, a 'subsidy' is:
A tax imposed on renewable energy
A financial contribution from the government to lower the cost of a product or service
A penalty for exceeding emissions limits
A market price for electricity
Explanation - Subsidies reduce the effective cost to producers or consumers, encouraging adoption of the subsidized technology.
Correct answer is: A financial contribution from the government to lower the cost of a product or service
Q.32 Which of the following is a common metric used to assess the environmental impact of a renewable project?
Levelized Cost of Electricity
Carbon intensity (gCO₂/kWh)
Payback period
Interest rate
Explanation - Carbon intensity measures the amount of CO₂ emitted per unit of electricity generated, indicating environmental performance.
Correct answer is: Carbon intensity (gCO₂/kWh)
Q.33 A ‘feed‑in tariff’ is usually set for:
A fixed period, often 15‑20 years, to guarantee price stability
Only the first year of operation
The duration of a power purchase agreement
The period of a carbon tax
Explanation - FiTs are typically long‑term contracts that give investors confidence in future revenue streams.
Correct answer is: A fixed period, often 15‑20 years, to guarantee price stability
Q.34 Which policy tool directly incentivizes manufacturers to produce cheaper renewable technology?
Renewable Portfolio Standard
Technology‑specific tax credit
Carbon pricing
Feed‑in tariff
Explanation - Tax credits tied to specific technologies reduce production costs, encouraging manufacturers to lower prices and increase output.
Correct answer is: Technology‑specific tax credit
Q.35 What is the primary advantage of a ‘collaborative financing’ model for large offshore wind projects?
It eliminates the need for government approvals
It spreads risk among multiple investors, making financing more attainable
It guarantees a fixed electricity price for consumers
It reduces the physical size of turbines
Explanation - Collaborative financing pools capital from various sources, lowering individual exposure and attracting larger projects.
Correct answer is: It spreads risk among multiple investors, making financing more attainable
Q.36 In a cost‑benefit analysis, discounting future cash flows is necessary because:
Future money is worth more than present money
It reflects the time value of money and opportunity cost
It inflates project costs artificially
It eliminates the need for externalities
Explanation - Discounting converts future benefits and costs to present value, allowing proper comparison across time.
Correct answer is: It reflects the time value of money and opportunity cost
Q.37 Which of the following is a typical component of a renewable energy incentive package in developing countries?
High import tariffs on solar panels
Feed‑in tariffs combined with tax holidays
Mandatory shutdown of all coal plants
A ban on wind turbines
Explanation - Incentive packages often pair FiTs (price support) with tax holidays (reduced taxes) to improve project viability.
Correct answer is: Feed‑in tariffs combined with tax holidays
Q.38 What does the term ‘energy return on investment’ (EROI) measure?
The monetary profit from a power plant
The ratio of energy produced over the lifetime of a system to the energy invested in building and operating it
The number of jobs created by a renewable project
The cost per kilowatt‑hour
Explanation - EROI indicates how efficiently a technology converts invested energy into usable energy output.
Correct answer is: The ratio of energy produced over the lifetime of a system to the energy invested in building and operating it
Q.39 Which of the following is a direct effect of a carbon tax on electricity markets?
Increased cost of coal‑based generation, making renewables more competitive
Reduction in renewable subsidies
Mandatory installation of solar panels on all homes
Elimination of net metering
Explanation - By raising the cost of carbon‑intensive fuels, a carbon tax improves the relative economics of low‑carbon generation.
Correct answer is: Increased cost of coal‑based generation, making renewables more competitive
Q.40 The term ‘ancillary services’ in electricity grids refers to:
Additional electricity sold to neighboring countries
Support functions such as frequency regulation, voltage control, and reserve capacity
Extra revenue from carbon credits
The installation of backup generators at homes
Explanation - Ancillary services keep the grid stable and reliable, especially important with variable renewable generation.
Correct answer is: Support functions such as frequency regulation, voltage control, and reserve capacity
Q.41 Which of the following best describes a ‘renewable energy certificate’ market?
A system where certificates are issued for each MWh of renewable electricity generated and can be traded
A market for trading carbon emission permits
A platform for buying and selling fossil fuel contracts
A government grant program for solar panels
Explanation - Renewable Energy Certificates (RECs) represent renewable generation and are bought by entities needing to meet compliance or voluntary goals.
Correct answer is: A system where certificates are issued for each MWh of renewable electricity generated and can be traded
Q.42 In the context of renewable project economics, a ‘de‑rating factor’ is used to:
Increase the nameplate capacity of a turbine
Adjust the expected output to account for losses and downtime
Reduce the tax credit amount
Calculate carbon emissions
Explanation - De‑rating reflects the reduction from theoretical maximum output due to real‑world conditions.
Correct answer is: Adjust the expected output to account for losses and downtime
Q.43 What is the purpose of a ‘grid‑code’ in relation to renewable integration?
To set tariffs for electricity consumers
To define technical requirements for connecting generators to the transmission network
To determine the price of carbon credits
To allocate subsidies to renewable projects
Explanation - Grid codes ensure that new generators meet safety, stability, and performance standards for reliable operation.
Correct answer is: To define technical requirements for connecting generators to the transmission network
Q.44 Which factor most directly influences the LCOE of solar PV?
Wind speed at the site
Solar irradiance and module efficiency
Coal price
Natural gas pipeline distance
Explanation - Higher irradiance and more efficient modules increase energy output, lowering the LCOE.
Correct answer is: Solar irradiance and module efficiency
Q.45 A ‘green tariff’ offered by utilities is primarily intended to:
Charge customers higher rates for electricity
Allow customers to purchase a portion of their electricity from renewable sources without installing on‑site equipment
Subsidize nuclear power plants
Impose a carbon tax on households
Explanation - Green tariffs let consumers support renewable generation through their utility bill, often at a premium.
Correct answer is: Allow customers to purchase a portion of their electricity from renewable sources without installing on‑site equipment
Q.46 Which of the following statements about ‘sunk costs’ is true in project evaluation?
Sunk costs should be included in the NPV calculation
Sunk costs are recoverable if the project succeeds
Sunk costs are past expenditures that should not affect future decision‑making
Sunk costs are the same as operating costs
Explanation - Decision analysis ignores sunk costs because they cannot be changed by current or future actions.
Correct answer is: Sunk costs are past expenditures that should not affect future decision‑making
Q.47 In a market where renewable generators receive Renewable Energy Certificates (RECs), the price of a REC reflects:
The cost of building a wind turbine
The supply‑and‑demand balance for renewable generation compliance
The price of coal on the spot market
The tax rate on electricity
Explanation - REC prices fluctuate based on how many certificates are needed to meet RPS targets versus how many are available.
Correct answer is: The supply‑and‑demand balance for renewable generation compliance
Q.48 Which of the following is a typical characteristic of a ‘feed‑in tariff’ scheme?
The tariff rate declines over time (degression)
The tariff is the same for all types of generation regardless of technology
The tariff is only available for fossil‑fuel plants
The tariff is set by the market each month
Explanation - Degression reduces tariffs gradually to reflect cost reductions and encourage efficiency.
Correct answer is: The tariff rate declines over time (degression)
Q.49 What is a ‘net‑zero’ energy target?
Generating as much renewable electricity as total electricity consumption
Balancing total greenhouse‑gas emissions with removal or offsetting measures
Eliminating all electricity use
Providing free electricity to all households
Explanation - Net‑zero aims for overall emissions to be zero after accounting for offsets, not necessarily zero energy consumption.
Correct answer is: Balancing total greenhouse‑gas emissions with removal or offsetting measures
Q.50 A 'green premium' refers to:
The extra cost of a clean technology compared with the conventional alternative
The tax rebate given to renewable projects
The increase in electricity tariffs for renewable users
The profit margin of fossil fuel companies
Explanation - The green premium quantifies the additional expense required to choose a low‑carbon option over a higher‑carbon one.
Correct answer is: The extra cost of a clean technology compared with the conventional alternative
Q.51 Which of the following is a key advantage of a ‘virtual power plant’ (VPP) for renewable integration?
It physically aggregates all renewable assets into a single plant
It uses software to coordinate distributed resources as a single entity, providing grid services
It eliminates the need for any storage
It guarantees constant output from wind farms
Explanation - VPPs aggregate and control dispersed generation and storage to act like a conventional power plant in the market.
Correct answer is: It uses software to coordinate distributed resources as a single entity, providing grid services
Q.52 In the context of renewable energy policy, the term ‘policy lock‑in’ describes:
A situation where existing policies make it costly to shift to different technologies
A mandatory requirement to use only wind power
A legal restriction on building new solar farms
A tax on renewable electricity
Explanation - Policy lock‑in can hinder adoption of newer technologies if earlier policies heavily favor certain solutions.
Correct answer is: A situation where existing policies make it costly to shift to different technologies
Q.53 Which of the following is an example of a ‘non‑price’ incentive for renewable energy deployment?
Feed‑in tariff
Carbon tax
Simplified permitting and streamlined interconnection processes
Renewable Energy Certificate market
Explanation - Non‑price incentives reduce administrative barriers, lowering time and costs without directly affecting price.
Correct answer is: Simplified permitting and streamlined interconnection processes
Q.54 The term ‘distributed generation’ (DG) refers to:
Large centralised power plants
Generation facilities located close to the point of electricity consumption, often on the consumer’s premises
Transmission lines across continents
Offshore wind farms only
Explanation - DG includes rooftop solar, small wind, and other localized generation that reduces the need for long‑distance transmission.
Correct answer is: Generation facilities located close to the point of electricity consumption, often on the consumer’s premises
Q.55 Which metric is most appropriate for comparing the economic attractiveness of two renewable projects with different lifespans?
Simple payback period
Levelized Cost of Electricity (LCOE)
Annual operating cost
Installed capacity
Explanation - LCOE normalises costs over the expected energy output and lifespan, enabling fair comparison.
Correct answer is: Levelized Cost of Electricity (LCOE)
Q.56 A ‘carbon offset’ purchased by a renewable project typically represents:
A reduction in emissions elsewhere that compensates for the project's own emissions
A tax rebate for the project
The amount of electricity generated
The price of renewable electricity
Explanation - Offsets are used to neutralise residual emissions by funding emission‑reducing activities elsewhere.
Correct answer is: A reduction in emissions elsewhere that compensates for the project's own emissions
Q.57 In the context of renewable energy policy, the term ‘just transition’ aims to:
Guarantee that only large corporations benefit from renewables
Ensure that the shift to low‑carbon energy creates equitable economic opportunities and minimizes social disruption
Accelerate the shutdown of all fossil fuel plants within a year
Provide free renewable energy to all households
Explanation - A just transition addresses social equity, job creation, and community impacts during the move to clean energy.
Correct answer is: Ensure that the shift to low‑carbon energy creates equitable economic opportunities and minimizes social disruption
Q.58 Which of the following best describes the function of a ‘capacity auction’ in renewable energy markets?
To sell electricity at market price each hour
To award contracts for the right to supply a certain amount of capacity, typically at the lowest bid price
To trade carbon credits
To provide subsidies for solar panel installation
Explanation - Capacity auctions allocate future generation rights based on competitive bidding, encouraging cost‑effective capacity addition.
Correct answer is: To award contracts for the right to supply a certain amount of capacity, typically at the lowest bid price
Q.59 Which of the following is a major economic risk for offshore wind projects?
Low wind speeds
High capital expenditures and financing risk due to long construction periods
Abundant cheap land
Unlimited transmission capacity
Explanation - Offshore wind requires significant upfront investment and faces construction delays, increasing financial risk.
Correct answer is: High capital expenditures and financing risk due to long construction periods
Q.60 In many countries, a ‘renewable energy surcharge’ on electricity bills is used to:
Fund renewable energy development projects
Increase the price of fossil‑fuel electricity
Punish renewable energy users
Tax electricity consumption
Explanation - Surcharges collect revenue from all consumers to finance subsidies, research, or infrastructure for renewables.
Correct answer is: Fund renewable energy development projects
Q.61 The primary purpose of a ‘tariff design’ that includes a ‘capacity payment’ alongside energy payment is to:
Increase the total cost of electricity for consumers
Compensate generators for being available to produce power when needed, not just for actual energy produced
Subsidize fossil fuel imports
Reduce the need for grid maintenance
Explanation - Capacity payments ensure reliability by paying for readiness, which is important for intermittent renewables.
Correct answer is: Compensate generators for being available to produce power when needed, not just for actual energy produced
Q.62 Which of the following is a key advantage of using a ‘power purchase agreement’ (PPA) for corporate renewable procurement?
Guarantees the corporation will own the renewable asset
Provides a fixed price for renewable electricity, helping with budgeting and sustainability goals
Eliminates the need for any regulatory approvals
Reduces the corporation’s carbon emissions to zero instantly
Explanation - Corporate PPAs lock in price and volume, allowing firms to meet renewable targets and manage electricity costs.
Correct answer is: Provides a fixed price for renewable electricity, helping with budgeting and sustainability goals
Q.63 In renewable energy policy, ‘technology neutrality’ means:
Providing the same level of support to all renewable technologies regardless of their characteristics
Only supporting solar power
Favoring the cheapest technology exclusively
Prohibiting any government subsidies
Explanation - Technology‑neutral policies avoid picking winners, allowing market forces to determine the most suitable solutions.
Correct answer is: Providing the same level of support to all renewable technologies regardless of their characteristics
Q.64 Which of the following statements about ‘cost‑of‑service’ regulation is correct?
It sets electricity prices based purely on market competition
It allows utilities to recover costs of providing service, including a reasonable return on investment
It eliminates all renewable incentives
It mandates a fixed electricity price for all consumers
Explanation - Cost‑of‑service regulation ensures utilities can cover operating costs, capital expenses, and earn a fair profit.
Correct answer is: It allows utilities to recover costs of providing service, including a reasonable return on investment
Q.65 The term ‘grid‑defection’ refers to:
When consumers disconnect from the grid and rely solely on on‑site generation
When a utility refuses to purchase renewable energy
When a country stops exporting electricity
When a power plant exceeds its capacity limit
Explanation - Defection occurs when users become self‑sufficient, potentially reducing utility revenues and affecting grid stability.
Correct answer is: When consumers disconnect from the grid and rely solely on on‑site generation
Q.66 Which factor is most likely to increase the Levelized Cost of Electricity (LCOE) for a wind farm?
Higher average wind speed
Lower turbine hub height
Reduced operation and maintenance costs
Longer project lifetime
Explanation - Lower hub height typically encounters slower wind, reducing energy output and raising LCOE.
Correct answer is: Lower turbine hub height
Q.67 In the context of renewable energy financing, a ‘senior loan’ is characterized by:
Higher interest rate and subordinate claim on assets
Lower priority in repayment and higher risk
First‑lien claim on project assets and lower interest rate
Equity ownership without repayment obligations
Explanation - Senior loans have priority claim on cash flows, making them less risky and typically cheaper than subordinated debt.
Correct answer is: First‑lien claim on project assets and lower interest rate
Q.68 Which of the following is an example of a ‘policy instrument’ used to promote renewable energy?
Carbon pricing
Transmission line construction
Wind turbine blade design
Electric vehicle charging stations
Explanation - Policy instruments are tools like taxes, subsidies, or standards that influence market behavior; carbon pricing incentivizes low‑carbon options.
Correct answer is: Carbon pricing
Q.69 A ‘greenfield’ renewable project refers to:
A project that upgrades an existing power plant
A new construction on previously undeveloped land
A project that uses only recycled materials
A project located within an existing industrial park
Explanation - Greenfield projects are built from scratch on virgin sites, unlike brownfield projects which involve repurposing existing facilities.
Correct answer is: A new construction on previously undeveloped land
Q.70 Which of the following best describes a ‘market‑based’ renewable energy incentive?
A fixed feed‑in tariff set by the government
A tradable Renewable Energy Certificate system
A direct cash grant to installers
A mandatory quota for renewable generation
Explanation - Market‑based mechanisms rely on price signals and trading, allowing participants to meet obligations flexibly.
Correct answer is: A tradable Renewable Energy Certificate system
Q.71 Which of the following is a direct consequence of high penetration of solar PV on a distribution network?
Reduced need for voltage regulation equipment
Potential reverse power flow and voltage rise during low demand periods
Increased baseload generation from coal
Elimination of transmission losses
Explanation - Excess solar generation can cause power to flow back towards the substation, raising voltages beyond acceptable limits.
Correct answer is: Potential reverse power flow and voltage rise during low demand periods
Q.72 Which metric would you use to compare the speed of capital recovery for two renewable projects of different sizes?
Payback period
Levelized Cost of Electricity
Carbon intensity
Capacity factor
Explanation - Payback period measures the time required for cumulative cash flow to equal the initial investment.
Correct answer is: Payback period
Q.73 A ‘carbon border adjustment’ (CBA) primarily aims to:
Increase imports of renewable energy equipment
Level the playing field for domestic producers by taxing imported goods based on their embedded carbon emissions
Provide subsidies to foreign fossil‑fuel producers
Eliminate all tariffs on electricity trade
Explanation - CBA charges imports for the carbon they carry, preventing carbon leakage and encouraging cleaner production abroad.
Correct answer is: Level the playing field for domestic producers by taxing imported goods based on their embedded carbon emissions
Q.74 In the context of renewable energy policy, what does the term ‘de‑risking’ refer to?
Increasing the technical risk of a project
Providing guarantees, insurance, or financial instruments to reduce investor risk
Reducing the cost of renewable technology
Eliminating the need for any policy support
Explanation - De‑risking mechanisms make projects more attractive by mitigating perceived financial or regulatory uncertainties.
Correct answer is: Providing guarantees, insurance, or financial instruments to reduce investor risk
Q.75 Which of the following is a typical feature of a ‘clean energy fund’?
Financing only fossil‑fuel projects
Investing in renewable and low‑carbon projects with public or private capital
Providing direct cash transfers to households
Regulating electricity market prices
Explanation - Clean energy funds pool capital to finance projects that contribute to decarbonization.
Correct answer is: Investing in renewable and low‑carbon projects with public or private capital
Q.76 The term ‘grid‑forming inverter’ in renewable power systems refers to:
An inverter that can establish voltage and frequency on its own, acting like a virtual generator
A device that only converts DC to AC without any control functions
A component that stores solar energy
A regulator that reduces electricity demand
Explanation - Grid‑forming inverters can operate independently of the main grid, providing stability services.
Correct answer is: An inverter that can establish voltage and frequency on its own, acting like a virtual generator
Q.77 Which of the following best explains why ‘capacity factor’ is generally lower for solar PV than for baseload coal plants?
Solar PV has higher maintenance costs
Solar PV generates electricity only when the sun shines, leading to intermittent production
Coal plants are larger in size
Solar panels are more expensive
Explanation - Intermittency reduces the average output of solar PV relative to its nameplate capacity.
Correct answer is: Solar PV generates electricity only when the sun shines, leading to intermittent production
Q.78 A ‘green loan’ differs from a conventional loan primarily by:
Having a higher interest rate
Requiring that the proceeds be used for environmentally beneficial projects
Being unsecured
Having no repayment schedule
Explanation - Green loans are earmarked for projects that deliver environmental benefits, often with favorable terms.
Correct answer is: Requiring that the proceeds be used for environmentally beneficial projects
Q.79 Which of the following best captures the concept of ‘energy justice’ in renewable policy?
Ensuring that only wealthy nations benefit from renewable technology
Promoting equitable access to clean energy and fair distribution of benefits and burdens
Providing subsidies exclusively to large corporations
Eliminating all fossil fuel use instantly
Explanation - Energy justice focuses on fairness in energy production, distribution, and consumption across societies.
Correct answer is: Promoting equitable access to clean energy and fair distribution of benefits and burdens
Q.80 The primary purpose of an ‘interconnection queue’ in renewable project development is to:
Rank projects based on their size
Manage the order in which projects are approved to connect to the transmission grid
Set the price of electricity for each project
Allocate subsidies to the highest‑valued projects
Explanation - An interconnection queue tracks applications and ensures orderly, fair processing of connection requests.
Correct answer is: Manage the order in which projects are approved to connect to the transmission grid
Q.81 In a renewable energy auction, a “price‑only” auction means:
Bidders submit only a price per MWh; the lowest price wins the contract for a specified quantity
Bidders submit technical specifications only
The auction is based on the total project cost
Only large corporations may participate
Explanation - Price‑only auctions focus solely on the cost bid, simplifying the selection process.
Correct answer is: Bidders submit only a price per MWh; the lowest price wins the contract for a specified quantity
Q.82 Which of the following is a common environmental co‑benefit of large‑scale solar farms?
Increased water consumption
Reduced air pollutants such as NOx and SO₂
Higher greenhouse‑gas emissions
Noise pollution comparable to coal plants
Explanation - Solar generation emits no combustion‑related pollutants, improving local air quality.
Correct answer is: Reduced air pollutants such as NOx and SO₂
Q.83 The term ‘net‑zero emissions’ for a power sector means:
Total elimination of all emissions
Balancing emitted greenhouse gases with removal or offset measures to achieve a net balance of zero
Only using nuclear power
Doubling the amount of renewable generation
Explanation - Net‑zero does not require zero emissions; it allows for offsets to counterbalance residual emissions.
Correct answer is: Balancing emitted greenhouse gases with removal or offset measures to achieve a net balance of zero
Q.84 Which of the following best explains why ‘energy storage’ is considered a key enabler for higher renewable penetration?
It reduces the need for transmission lines
It allows excess renewable generation to be saved and dispatched when needed, smoothing intermittency
It increases the cost of renewable projects
It eliminates the requirement for any grid upgrades
Explanation - Storage mitigates the mismatch between generation and demand, enabling higher shares of variable renewables.
Correct answer is: It allows excess renewable generation to be saved and dispatched when needed, smoothing intermittency
Q.85 A ‘greenhouse gas (GHG) emissions trading scheme’ primarily works by:
Providing fixed subsidies for renewables
Setting a cap on total emissions and allowing firms to trade emission allowances
Mandating the use of biofuels
Taxing electricity consumption directly
Explanation - Emissions trading caps total GHG output and creates a market for buying and selling allowances.
Correct answer is: Setting a cap on total emissions and allowing firms to trade emission allowances
Q.86 In policy terms, a ‘subsidy phase‑out’ is intended to:
Increase the cost of renewable technologies over time
Gradually reduce financial support as technologies mature and become cost‑competitive
Eliminate all renewable energy projects
Raise electricity tariffs for all consumers
Explanation - Phase‑outs prevent market distortion once renewable costs have fallen sufficiently.
Correct answer is: Gradually reduce financial support as technologies mature and become cost‑competitive
Q.87 Which of the following is a typical component of a ‘clean energy procurement target’ for a public institution?
A mandate to purchase a set percentage of electricity from renewable sources within a defined timeframe
A requirement to shut down all fossil‑fuel generators immediately
A directive to increase electricity consumption
A rule to only use diesel generators
Explanation - Procurement targets set clear goals for renewable electricity purchases, driving demand and market growth.
Correct answer is: A mandate to purchase a set percentage of electricity from renewable sources within a defined timeframe
Q.88 Which of the following is a key reason governments may implement a ‘technology‑specific' incentive rather than a technology‑neutral one?
To accelerate the deployment of a nascent technology that needs extra support
To avoid any market distortion
To guarantee that all technologies receive equal funding
To reduce the administrative burden
Explanation - Targeted incentives help emerging technologies overcome early cost barriers and achieve scale.
Correct answer is: To accelerate the deployment of a nascent technology that needs extra support
Q.89 When evaluating a renewable project, the term ‘internal rate of return (IRR)’ represents:
The discount rate that makes the project's NPV equal to zero
The average price of electricity sold
The total capital cost divided by the annual output
The carbon intensity of the project
Explanation - IRR is the rate at which the present value of cash inflows equals the present value of cash outflows.
Correct answer is: The discount rate that makes the project's NPV equal to zero
Q.90 A ‘clean electricity standard’ differs from a Renewable Portfolio Standard (RPS) mainly because:
It includes low‑carbon sources such as nuclear and CCS, not just renewables
It applies only to residential customers
It sets a price floor for electricity
It bans all fossil‑fuel generation
Explanation - Clean electricity standards count any low‑carbon generation, broadening the compliance options beyond pure renewables.
Correct answer is: It includes low‑carbon sources such as nuclear and CCS, not just renewables
Q.91 Which of the following best explains the concept of ‘price elasticity of demand’ for electricity?
The degree to which electricity consumption changes in response to price changes
The speed at which power plants can ramp up generation
The amount of electricity a solar panel can produce
The fixed cost of electricity for all consumers
Explanation - Price elasticity measures sensitivity of demand to price variations; electricity is generally price‑inelastic in the short term.
Correct answer is: The degree to which electricity consumption changes in response to price changes
Q.92 What is the main economic rationale for implementing a ‘capacity market’ in regions with high renewable penetration?
To provide revenue for generators that may not run often but are needed for reliability
To increase the price of renewable electricity
To subsidize fossil fuel imports
To eliminate the need for transmission upgrades
Explanation - Capacity markets ensure that enough resources are available to meet peak demand, compensating for the intermittency of renewables.
Correct answer is: To provide revenue for generators that may not run often but are needed for reliability