Energy Sector Lauds Union Budget 2024 The announcement for support of Pumped Hydro Storage is a key step for supporting Long Duration Energy Storage technologies.
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Finance Minister Nirmala Sitharaman presented the union budget and said that a policy to support pump storage projects will be brought to provide round the clock energy. She also said that NTPC and BHEL will set up 800 MW super critical thermal power with higher efficiency under a Joint Venture.
Sitharaman also proposed to expand list of exempted capital goods used in manufacturing of solar cells and panels.
"Solar energy and energy transition are critical in the fight against climate change. To support the energy transition, I propose to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country. However, in view of the sufficient domestic manufacturing capacities for solar glass, glass, and thinned copper interconnect, I propose not to extend the exemption of customs duties provided to them," said Union Finance Minister Nirmala Sitharaman.
Solar energy plays a crucial role in India's aspirations to generate 500 GW of renewable energy by 2030. It is a vital component in the country's efforts to reduce dependence on fossil fuels and combat climate change.
Soon after the budget presentation, the industry has lauded it.
Dr. Rahul Walawalkar, President, India Energy Storage Alliance (IESA) and President and Managing Director, Customized Energy Solutions India Pvt. Ltd said that he welcomes the announcement for support of Pumped Hydro Storage which is a key step for supporting Long Duration Energy Storage technologies.
"We welcome efforts for support for hard-to-abate sectors for improving energy efficiency and adopting clean energy. Recent tender results for RE+ storage have demonstrated that India is poised to adopt large scale Firm and Dispatchable Renewable Energy (FDRE) coupled with energy storage for such decarbonization effort. Custom duty exemption for critical minerals for supporting Lithium ion battery manufacturing as well as associated supply chain is a great move in the direction towards making India the global hub for critical minerals. Abolishment of Angel tax is a great and long overdue step boosting investor's confidence and the promising EV and Clean tech start-up ecosystem," Walawalkar said.
Meanwhile, Vineet Mittal, Chairman, Avaada Group said that today's Union Budget demonstrates the government's intent in building a resilient economy through a multipronged approach.
"The Energy transition policy pathway aims to balance employment, growth, and environmental sustainability. A focus on pumped storage projects will address the variable and intermittent nature of growing renewable energy share in India's energy mix, ensuring a stable and reliable energy supply. Transitioning 'hard to abate' industries is expected to stimulate investments and innovations in the clean energy sector," Mittal said.
The Union Budget for 2023-24 had provided for an allocation of INR 7,327 crore for the solar power sector including grid, offgrid, and PM-KUSUM projects. This was a 48 per cent increase over the previous INR 4,979 crore provided in the revised estimates for the previous budget. Among the many energy alternatives being adopted in the country, rooftop solar energy has been a big draw, with the Centre recently announcing the Pradhan Mantri Suryodaya Yojana. The scheme intends to supply power to households through solar rooftop installations while also providing extra money for excess electricity output.
Kishan Karunakaran, CEO, Buyofuel said that the union Budget once again underscores the commitment to achieving Vikisit Bharat 2047, with energy transition being a top priority.
"The interim budget's financial assistance has significantly benefited the biofuel industry by simplifying the complex biofuel supply chain and generating increased interest in the sector. This budget emphasizes India's energy mix, focusing on other clean energy sources, which highlights the government's dedication to environmental sustainability. If appropriate regulations for transitioning the hard-to-abate sectors are outlined, we can anticipate substantial governmental support to solidify our energy transition efforts. Additionally, the policies focusing on rooftop solar, nuclear R&D, and AUSE technology in thermal power plants demonstrate India's unwavering commitment to energy independence. The energy transition is set to play a crucial role in our nation's progress," Karunakaran added.
In 2014, the BJP government initiated the Rooftop Solar Programme intending to attain a total installed capacity of 40,000 megawatts (MW) or 40 gigawatts (GW) by 2022. This was part of the plan to hit 100 gigawatts of solar power generation by 2022. The 2022 target was missed, as solar power generation touched only 63.3 GW. By the end of 2023, solar power generation hit 73 GW. Of the 100 GW of solar power, 40 GW was supposed to be from solar panels installed on rooftops. But by the end of 2023, rooftop solar energy generation was just 11 GW.
The government, in January, increased benchmark central financial assistance for the residential sector under the rooftop solar programme to give a push to the projects and cover the higher cost of solar panels. Support for up to 3 kW capacity was raised to INR 18,000 per kW for general states, up 23.4 per cent, from INR 14,588 per kW earlier, according to a notification from the Ministry of New and Renewable Energy. For over 3kW and up to 10 kW capacity, the assistance has been raised to INR 9,000 per kW for general states from INR 7,294 per kW.
