As India strives to achieve 50% cumulative installed power generation capacity from non-fossil fuel sources by 2030, the renewable energy sector eagerly awaits impactful measures in the upcoming interim Union Budget, set to be presented on February 1.
India aspires to add 50 GW of renewable energy capacity over the next five years, starting from 2024. However, the country has been able to achieve only about 15 GW annually, emphasizing the need for accelerated efforts. Anticipations suggest that the interim Budget may allocate a significant sum of at least Rs 20,000 crore to bolster renewable energy initiatives. Prime Minister Narendra Modi’s announcement of the Pradhan Mantri Suryoday Yojna for one crore houses reflects the government’s commitment to expanding renewable energy access.
Focus areas for growth:
Distributed renewable energy capacities:
Emphasis on decentralized renewable energy capacities will likely be a focal point.
Approved list of models and manufacturers (ALMM):
The reintroduction of ALMM is expected to spur competitiveness and innovation in the solar industry.
Critical industry demands:
Green Hydrogen-Blending Mandate: Industry experts emphasize the need for implementing a green hydrogen-blending mandate for key industries, coupled with a reduction in the GST rate for electrolyser manufacturing from the current 18 percent.
Viability gap funding (VGF) for offshore wind projects:
The budget may propose VGF for offshore wind projects, aligning with the government’s plan to promote this sector.
Battery energy storage systems (BESS):
The industry urges a revision of taxes and duties on BESS, seeking further incentives for large grid-scale energy storage systems and support for utilizing green ammonia or green hydrogen in energy storage.
Coal gasification program:
The industry anticipates the inclusion of the government’s plan to offer Rs 8,500 crore in viability gap funding to the public and private sectors for coal gasification. The ambitious program aims for 100 MT of coal gasification by 2030, with investments exceeding Rs 4 lakh crore.
Funding requirements:
As per the draft National Electricity Policy, the estimated funding requirement for solar and wind projects from 2022-2032 stands at Rs 20.67 lakh crore.
With the renewable energy sector playing a pivotal role in India’s sustainable future, industry stakeholders hope for an overall increase in capital expenditure in the budget, particularly in areas like setting transmission lines for efficient evacuation of upcoming renewable energy capacities. The industry eagerly awaits the budget’s unveiling, expecting it to pave the way for a greener and more sustainable energy landscape in the country.
