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Budget Push for Green Energy

24 Jun 2024

Expansion Likely in 2024

In a bid to achieve its ambitious renewable energy targets, the Indian government is poised to provide a significant boost to green energy initiatives in the forthcoming Budget 2024. This move aligns with the nation’s goals of adding 500 gigawatts (GW) of renewable energy capacity by 2030 and reducing household electricity bills to zero.


Embracing Green Budgeting

The PHD Chamber of Commerce and Industry has recommended that the finance ministry adopt green budgeting, wherein all government departments prepare environmental budget statements highlighting their green initiatives. This approach aims to streamline and enhance the focus on sustainable development across various sectors.


Key Expectations from the Budget

Increased Allocations for Renewable Energy: Industry players are anticipating enhanced allocations, especially towards solar and wind energy projects. The rooftop solar scheme and viability gap funding for offshore wind projects have already been launched, but the industry expects more substantial financial support to drive these initiatives further.

Green Hydrogen and Battery Storage: With the government previously allocating Rs 19,700 crore to the Green Hydrogen Mission, aiming for an annual production of 5 million metric tonnes of green hydrogen by 2030, the industry is hopeful for continued and increased budgetary support. Additionally, significant capital expenditure is expected for battery storage infrastructure to ensure round-the-clock availability of renewable energy.

Import Duty Reduction: EverSource Capital’s CEO, Dhanpal Jhaveri, has suggested reducing the import duty on solar cells to zero. This reduction, coupled with an obligation for companies to use a certain percentage of domestic cells in their projects, could lower costs and power purchase tariffs, aiding in achieving the 500 GW goal by 2030.


Financial Commitments and Policy Incentives

In the 2023 Budget, the government allocated Rs 35,000 crore for priority capital investments aimed at energy transition and achieving net-zero targets by 2070. This year, the industry expects a similar, if not more significant, financial push as the global focus shifts towards tripling green energy capacity.

Rooftop Solar Scheme and Offshore Wind Energy: The interim Budget announced a rooftop solar scheme to provide 10 million households with up to 300 units of free electricity monthly. Additionally, viability gap funding for harnessing offshore wind energy for an initial capacity of 1 GW was introduced. The upcoming Budget is expected to build on these initiatives, promoting round-the-clock renewable energy availability.


Focus on Renewable Energy Storage

A critical area gaining traction is renewable energy storage and its round-the-clock availability. The industry is looking forward to policy incentives to enhance storage capacity and maintain grid stability. Dilip Panjwani, CFO of Waaree Renewable Technologies Ltd, emphasized the need for robust energy storage solutions to ensure consistent grid stability.


Boosting Domestic Manufacturing

The government is also keen on boosting domestic manufacturing capacity for capital items like solar modules required for renewable energy projects. This strategy aims to meet ambitious targets and reduce reliance on imports. A strong impetus to innovation and indigenous manufacturing through strategic initiatives is highly anticipated.


Waiver for Interstate Transmission Charges

Industry leaders are also seeking an extension of the waiver for interstate transmission charges from June 2025 to June 2027. This extension will benefit projects installed post-FY25, encouraging faster adoption of renewable energy projects and creating meaningful storage capacity in the grid.


Conclusion

The upcoming Budget 2024 is expected to be a significant milestone in India's green energy journey. With increased allocations, policy incentives, and a focus on innovation and domestic manufacturing, the government aims to accelerate the transition to renewable energy and achieve its ambitious targets. As the world focuses on sustainable energy solutions, India's proactive approach could position it as a global leader in the renewable energy sector.

Stay tuned for more updates as we anticipate significant announcements and initiatives that will shape the future of India's green energy landscape.

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