Budget 2024: What does India’s energy sector expect from Finance Minister Sitharaman?
The budgetary allocation for promotion of solar energy has been increased to Rs 8,644 crore, marking a 75% increase from Rs 4,941 crore in the revised estimates for FY24.
Ahead of the Union Budget 2024, reports suggest that the energy sector is a priority for the government. The country’s targets include reaching 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 electricity capacity stands at 444.75 GW, of which 54.6 percent is generated from thermal sources and the rest from renewable energy sources.
Budget 2024: Major challenges in the energy sector
A key issue in the energy sector is the need to increase capacity to meet rising demand, the report said.
In addition, expanding and strengthening the transmission network is crucial to support this increased capacity. Another pressing concern is minimizing lead times for adding thermal capacity and ensuring timely delivery of essential equipment. Improving grid stability and reducing technology costs is vital to maintaining a reliable power supply, the report said.
Ensuring supply chain stability and embracing new technologies are essential for the long-term sustainability and efficiency of the sector.
Interim budget 2024
The Centre’s energy sector initiatives, including those for renewable energy, have been allocated Rs 28,352 crore in the interim phase. Budget 2024This represents a 50 per cent increase over the revised estimate (RE) of Rs 18,945 crore for 2023-24.
The National Green Hydrogen Mission (NGHM), the Bio Energy Initiative and hydropower projects were the most funded. Also, programmes aimed at reforming the electricity distribution sector saw an increase of at least 39 percent in their budget allocation.
Rs 51 crore has been allocated for hydropower initiatives, 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 under construction in Arunachal Pradesh and Assam, is expected to be fully operational by December 2024.
The budget allocation for solar energy promotion programmes rose to Rs 8,644 crore, up 75 per cent from Rs 4,941 crore in the revised estimates for FY24. This figure excludes the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan Yojana (PM-KUSUM), which focuses on solarisation of the agriculture sector.
The report says the next budget should prioritise a number of key aspects to improve the energy sector.
It should provide incentives for energy transition technologies, and promote the adoption of cleaner and more efficient energy solutions. In addition, efforts to capture and use carbon should be encouraged to minimize emissions, the report said.
Significant investments in transmission and distribution infrastructure are essential to improve the efficiency and reliability of energy supply. Finally, providing incentives for coal gasification projects can diversify energy sources and reduce reliance on conventional coal combustion methods, the report said.
First print: 05 Jul 2024 | 15:30 IST