In Short : In Budget 2024, India’s power sector expects Finance Minister Nirmala Sitharaman to announce increased funding for green energy projects, support for domestic manufacturing, and incentives for technology adoption to enhance renewable capacity and grid resilience.
In Detail : Ahead of the Union Budget 2024, reports suggest that the power sector is a priority for the government. The nation’s goals include achieving 500 gigawatts of renewable energy by FY30 and adding 85 GW of thermal power capacity by FY32, according to a report in The Economic Times.
India’s installed power capacity stands at 444.75 GW, with 54.6 per cent generated from thermal sources and the remainder from renewable energy.
Budget 2024: Major challenges in power sector
A key issue in the power sector is the necessity to boost capacity to meet the rising demand, the report said.
Additionally, the expansion and strengthening of the transmission network are crucial to support this increased capacity. Another pressing concern is to minimise lead times for adding thermal capacity and to ensure the timely provision of essential equipment. Improving grid stability while reducing technology costs is vital for maintaining a dependable power supply, said the report.
Securing supply chain stability and embracing new technologies are essential for the sector’s long-term sustainability and efficiency.
Interim Budget 2024
The Centre’s power sector initiatives, including those for renewable energy, were allotted Rs 28,352 crore in Interim Budget 2024. This represents a 50 per cent increase from the revised estimate (RE) of Rs 18,945 crore for 2023-24.
The National Green Hydrogen Mission (NGHM), the Bio Energy initiative, and hydroelectric projects were the most significantly funded, with programmes intended to reform the power distribution sector also seeing an increase of at least 39 per cent in their budgetary allocation.
Hydropower initiatives have been allocated Rs 51 crore, a significant increase of 155 per cent from Rs 20 crore in the revised estimate for FY24. The 2,000 MW Subansiri Lower project, currently being built in Arunachal Pradesh and Assam, is expected to be fully operational by December 2024.
The budget allocation for solar energy promotion schemes increased to Rs 8,644 crore, marking a 75 per cent rise from Rs 4,941 crore in the revised estimates for FY24. This figure does not include the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan Yojana (PM-KUSUM), which focuses on the solarisation of the agricultural sector.
The upcoming budget needs to prioritise several crucial aspects to improve the power sector, the report said.
It should offer incentives for energy transition technologies, promoting the adoption of cleaner and more efficient energy solutions. Additionally, efforts to capture and use carbon should be encouraged to minimise emissions, the report stated.
Substantial investment in transmission and distribution infrastructure is essential to enhance the efficiency and reliability of power delivery. Lastly, providing incentives for coal gasification projects can diversify energy sources and lessen reliance on conventional coal-burning methods, the report stated.
