Budget 2022-23: FM focuses on energy transition through stimulation to renewable energy
With a focus on energy transition, major allocations will be directed toward renewable energy, module manufacturing, energy efficiency, storage, along with supporting incentives for green bonds.
In line with India’s global commitment to tackling climate change, the State Budget 2022-23 focuses on enabling energy transition by stimulating domestic solar power equipment and battery manufacturing.
During her budget speech, Nirmala Sitharaman announced major allocations centered on renewable energy, energy efficiency, electric mobility, data centers, building efficiency, grid-connected energy storage, and incentives for green bonds.
Sitharaman said that INR 19,500 crore for the Production Linked Incentive (PLI) will be made in 2022-23 for high efficiency modules with priority to fully integrated units in order to assist in meeting the 280 GW of installed solar capacity by 2030.
Sitharaman also stressed in this year’s budget that the government would launch a policy that enables setting up of charging stations at scale. She said that private companies will be encouraged to model the swapping and that land will be provided.
Additionally, under the Vibrant Village Programme, the government will provide enhanced financial assistance to border villages for the establishment of Distributed Renewable Energy projects. Further in an effort to boost farmers’ income and mitigate air pollution and stubble burning, the budget provides financial support to enable coal-fired power plants to co-fire biomass pellets at a rate of 5-7 percent.
The minister also stated that large commercial buildings will be encouraged to use energy efficiently, and four pilot projects for coal-gasification and coal-to-chemical technology will be established. According to Sitharaman, the government will offer duty concessions on electronic goods and parts, including electricity smart meters, to boost domestic manufacturing.
In order to set up green infrastructure in the public sector, the budget for fiscal year 2022-23 also provides for the issuance of green bonds. Further, the budget provides for an infrastructure status for data centers and energy storage systems, including grid-scale battery systems. This is intended to facilitate the funding of clean energy projects.
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