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Empowering India's Future: Analyzing the Indian Budget and the Energy Sector

India is the third-largest consumer of energy in the world. In 2023, the energy demand peaked at a record high of 233 gigawatts (GW), and is projected to continue increasing. The energy sector has been dominated by fossil fuels for years. However, renewable energy sources have begun to pick up the pace, with an installed capacity of 180.79 GW in 2023. India has set ambitious goals to reach a 500 GW non-fossil energy capacity by 2030 and to achieve net zero by 2070. However, this will be difficult to achieve without investment in this sector. Realising this, the government of India has shown its commitment to achieving these goals through this year's budget.

The main initiatives in the budget of 2024-25 for the energy sector are:


  • Solar Power Grids: This year, the fiscal allocation for the development of solar power grids has substantially increased from INR 4,970 Crore last year to INR 8,500 Crore. The increase is to support the development and maintenance of transmission infrastructure, as the country aims at increasing its renewable energy capacity.


  • Rooftop Solar: The introduction of the Pradhan Mantri Suryodaya Yojana has promised the installation of rooftop solar panels in one crore homes. This initiative is estimated to enable households to get access to up to over 300 units of free electricity each month and provide substantial savings of INR 15,000 to INR 18,000.


  • Green Hydrogen: Under the National Green Hydrogen Mission, the government has allocated INR 600 Crore, which is double from the previous year. This is in addition to the Green Hydrogen Mission and the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme, which has a major outlay of INR 17,940 Crore.


The green hydrogen sector faces several challenges, too, including cost disparity between green and grey hydrogen, technical and feasibility issues in storage and transportation and the absence of supply and testing infrastructure. Anticipating these challenges, the government has taken a step in the right direction to increase the budget allocation for the development of this sector. The two vital steps are the expansion of green energy and the EV ecosystem.


  • Green Energy: The budget announced Viability Gap Funding (VGF) for offshore wind projects with a current initial capacity of 1 (one) gigawatt. The mandatory blending of compressed biogas (CBG) was introduced in both compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic usage.


  • Electric Vehicle Ecosystem: The government announced its plan to expand and strengthen the EV Ecosystem by supporting the manufacturing and charging infrastructure. The goal is to speed up the widespread adoption of EVs. This will reduce carbon emissions and develop a decentralised energy storage ecosystem. However, the allocation for the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme has been reduced by nearly 44 per cent to Rs 2,671 crore for FY25. Thus, the government will need to analyse its goals and the allocated budget.


A common concern for all the initiatives mentioned above is the timely acquisition of Renewable Energy Certificates (REC) to ensure compliance with international standards and integrate into the global market for environmental attributes. Sustainiam streamlines this process for such initiatives through its digital Certificate Issuance Platform (CiP). CiP allows users to seamlessly certify their renewable energy devices in compliance with International Renewable Energy Certificates (IREC) standards while ensuring a highly transparent and accountable process.

As India continues to develop, the demand for energy will only continue to increase. Thus, the infrastructure to harness non-fossil fuel energy will be essential for the country's growth. With this year’s budget allocation in mind, India is on a path towards a revolution against climate change. India is a constantly developing country and will continue to surprise the world by using the technology and resources they have, and this budget will support its continuous development.

Date: 20/04/2024
Tags:
india
budget
energy sector
renewable energy
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