Decentralised solar energy, boost to offshore wind and coal gasification shows the government’s intent to transition towards a green economy, say experts
India’s interim budget for 2024-25 has some hits and a few misses as far as the country’s green future is concerned. While it keeps India largely aligned with its goal to become a $5 trillion economy in the next three years, the plan may have missed a chance to streamline measures needed to promote clean energy technologies such as solar PVs and electric vehicles, experts said.
While the interim budget gives a clear indication of what to expect post elections when the government releases its full fiscal budget, it also indicates the trajectory India wishes to take ahead of the COP33 summit it plans to host in 2028.
Boost for rooftop solar
Finance minister Nirmala Sitharaman on Thursday announced the government’s plan to provide rooftop solarisation to one crore households. This will give each household access to obtain up to 300 units free electricity every month, and an opportunity to sell the surplus to DISCOMs, Sitharaman said. According to the government, this will create savings of up to ₹15,000-18,000 annually for households. Some experts, however, have pointed out that net metering policies are not favourable in every state where consumers can gain from selling electricity back to the grid.
The rooftop solar initiative will open up the market for EV charging, giving entrepreneurs an opportunity for supply and installation and provide jobs for youth with skills in manufacturing, installation and maintenance, Sitharaman said. The government also increased its solar power (grid) allocations from ₹4,970 crore to ₹8,500 crore.
One eye on net-zero
Keeping India’s goal of net-zero by 2070 in mind, Sitharaman said the government plans to provide viability gap funding for offshore wind energy potential for an initial capacity of 1GW. “This initiative is poised to bolster the government’s ambitious goal of installing 500 GW of non-fossil power, with an anticipated 130 GW to be generated through offshore wind sources,” said Swasti Raizada, Policy Advisor, IISD. But support for new technologies has to be uniform, according to some experts.
“New technologies need more support and there were expectations of more capital outlay and tax concessions for expansion of storage, green hydrogen etc, which are missing,” Vibhuti Garg, director – South Asia, Institute for Energy Economics and Financial Analysis. Allocation for the National Green Hydrogen Mission has been doubled from ₹297 crore to ₹600 crore.
The government also announced plans to set up a coal gasification and liquefaction capacity of 100 MT by 2030. “This will also help in reducing imports of natural gas, methanol, and ammonia,” Sitharaman said.
“While controversial, it can be a game changer for India’s energy security amidst the Global North’s push for gas as a transitional fuel. India has abundant coal reserves which if gasified can produce a near equivalent to natural gas,” said Dhruba Purkayastha, India director, Climate Policy Initiative. Garg, however, said, “coal gasification requires high capex and whether it is the right solution for India to address its reliance on imports is not proven.”
Important to point out here that this 100 MT goal is not new and was first announced in 2020.
The government also announced phased mandatory blending of compressed biogas with compressed natural gas for transport and PNG purposes, which is a well thought through strategy to clean the coal gasified gas, said Purkayastha. Sitharaman also announced financial assistance to buy biomass aggregation machinery to support collection.
“The interim budget has just scratched the surface for net zero by mentioning offshore wind, biofuels and coal gasification but a lot more needs to be done in the space for deploying large scale clean energy solutions for transport and industries in particular. Also there is no mention of support for energy efficiency and other demand side measures to support decarbonisation,” Garg said.
The future is electric
India’s electric vehicle ecosystem will be strengthened with more support to the manufacturing and charging of vehicles, Sitharaman said. The government will also encourage adoption of more e-buses in public transport networks.
Encouraging a circular economy
In an attempt to choose regenerative principles over the current consumption-focused manufacturing, Sitharaman said the government will launch a new scheme of bio-manufacturing and bio-foundry. This will encourage greener alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri-inputs, the finance minister said.
Another significant announcement was the new railway corridors for energy, minerals and cement. “This will help cut pollution by reducing reliance on trucks, along with the expansion of the electric mobility ecosystem,” said Aarti Khosla, director, Climate Trends.