In Short : India’s budget is expected to prioritize green energy expansion, allocating increased funds for renewable energy projects and infrastructure. This push aims to accelerate the transition to clean energy, supporting sustainability goals and enhancing energy security.
In Detail : The PHD Chamber of Commerce and Industry has also recommended to the finance ministry to adopt green budgeting, where all government departments prepare environmental budget statements, highlighting their ‘green’ initiatives.
The forthcoming Budget is likely to provide more push to green energy in line with the government’s targets of adding 500 gigawatt (GW) renewable energy capacity by 2030 and reducing households’ electricity bill to zero.
While the government has launched a rooftop solar scheme and announced viability gap funding for offshore wind projects, industry players expect increased allocations, particularly towards solar and wind segments, along with higher budgetary capital expenditure in green hydrogen and battery storage infrastructure.
EverSource Capital expects the government to reduce the import duty on solar cells to zero with an obligation for the sectoral companies to use domestic cells in a certain percentage ratio in their projects to be announced by government for next 4 quarters.
“This will allow for build out of significant capacity at lower costs and hence lower power purchase tariffs for discoms and commercial and industrial customers and help India achieve its 500 GW goal by 2030,” said Dhanpal Jhaveri, CEO of EverSource Capital.
In the 2023 Budget, the government allocated Rs 19,700 crore to the Green Hydrogen Mission, aiming an annual production of 5 million metric tonne of green hydrogen by 2030. Moreover, Rs 35,000 crore was allocated for priority capital investments for energy transition and to realise net-zero targets by 2070. This year, too, the industry expects an enhanced financial push to the sector as the world focuses on tripling green energy capacity.
In the interim Budget for this fiscal, the government announced rooftop solar scheme, under which 10 million households will be enabled to receive up to 300 units of electricity free every month. The government also announced viability gap funding for harnessing offshore wind energy potential for an initial capacity of 1 GW. Going ahead, the Budget 2024 is expected to build on that while encouraging round-the-clock and firm and dispatchable renewable energy.
The PHD Chamber of Commerce and Industry has also recommended to the finance ministry to adopt green budgeting, where all government departments prepare environmental budget statements, highlighting their ‘green’ initiatives.
The industry also seeks extension of waiver for interstate transmission charges by two years from June 2025 to June 2027.
This will enable capacity installed post FY25 to also benefit from lower charges, noted Jhaveri. “This will enable faster adoption of RE projects injecting at ISTS (and supplying power to customers in different states) and will also create meaningful storage capacity in the grid,” he said.
A key segment that has rather gained traction of the stakeholders and the government in the RE sector is the storage of renewable energy and its round-the-clock availability. With many players now focusing on enhancing the storage capacity, the industry is hoping for policy incentives to address the issue.
“In recognition of the key role played by robust energy storage solutions towards maintaining round-the-clock grid stability, policy incentives for this segment would also be very welcome,” Dilip Panjwani, CFO, Waaree Renewable Technologies Ltd, had said.
The government has also been focused on boosting the domestic manufacturing capacity of capital items like solar modules required in RE capacities while striving to meet its ambitious targets. Hence, a strong impetus to innovation and indigenous manufacturing with strategic initiatives can be welcomed.
