The Indian Budget 2024-25, unveiled by Union Finance Minister Nirmala Sitharaman, has placed a strong emphasis on the renewable energy sector, aligning with India’s ambitious goal of achieving 500 GW of energy from renewable sources by 2030. The budget allocation, policy changes, and strategic initiatives outlined in this fiscal plan are pivotal in shaping the future of renewable energy in India. This blog delves into the various aspects of the budget and its anticipated impact on the renewable energy sector, drawing insights from multiple industry sources.
Solar Energy: A Promising Leap Forward
The solar energy sector has received a significant boost with an allocation of Rs 10,000 crore, a substantial increase from the previous year. This funding is primarily directed towards the PM Muft Bijli Yojana, which aims to enhance rooftop solar (RTS) installations. The PM Surya Ghar Muft Bijli Yojana, with an outlay of Rs 75,000 crore until 2027, targets 10 million households for residential rooftop installations.
However, despite these promising initiatives, challenges such as delays in subsidy disbursements and net-metering regulations continue to hinder the sector’s growth. Experts stress the need for streamlined processes and clear regulatory frameworks to ensure the effective implementation of these initiatives.
Bioenergy: Potential Yet to be Unlocked
While the budget highlights the promotion of biofuels, particularly Compressed Biogas (CBG), it lacks substantial new announcements for the bioenergy sector. The government aims for a 20% ethanol blend with petrol by 2025 and plans to establish 5,000 CBG projects. However, the economic sustainability of bioenergy projects depends on additional support for by-products like bio-slurry and the establishment of biomass banks. The industry calls for more comprehensive policies to fully harness the potential of bioenergy.
Critical Minerals: Reducing Dependency
To address India’s reliance on imported critical minerals essential for renewable energy technologies, the budget exempts Basic Customs Duty on 25 critical minerals. This move aims to enhance domestic procuring and refining capacities. However, experts highlight the need for increased investments in research and development (R&D) and the development of a robust recycling ecosystem. Strengthening domestic capabilities is crucial for reducing dependency on global supply chains and ensuring the sustainability of the renewable energy sector.
Wind Energy: Untapped Potential
Despite its significant potential, the wind energy sector did not receive new allocations or policy initiatives in the budget. Policy inconsistencies and infrastructure constraints have hindered the sector’s growth. The repowering of old turbines with new, efficient models in states like Tamil Nadu is a viable strategy to optimize wind energy production. However, effective policy provisions and improved power integration are necessary to realize this potential fully.
Energy Storage: Addressing Intermittency
The budget acknowledges the importance of energy storage solutions to address the intermittency in renewable energy generation. Developing a policy for Pumped Hydro Storage is crucial for meeting peak energy demands. However, ecological and financial challenges need to be addressed to implement these storage solutions effectively. Industry stakeholders emphasize the need for comprehensive strategies to integrate energy storage into the renewable energy framework.
Industry Reactions: A Mixed Bag
Industry leaders have expressed mixed reactions to the budget. While they appreciate the increased focus and funding for the renewable sector, they also call for more comprehensive policies and streamlined implementation processes. The alignment of government strategies with industry needs is vital for achieving the ambitious target of 500 GW of renewable energy by 2030. Collaborative efforts between the government and industry stakeholders are essential to build a resilient and sustainable energy future.
Conclusion
The Indian Budget 2024-25 marks a significant step towards supporting the renewable energy sector. However, several areas require further attention and strategic investment. Addressing challenges in solar, bioenergy, critical minerals, wind energy, and energy storage will be pivotal for India to meet its renewable energy targets. The government’s vision, coupled with industry collaboration, will be key to shaping a resilient and economically vibrant energy landscape.
