This year’s budget intends to disrupt the India’s energy sector to achieve the commitments made at various energy summits.
Alternate workspaces and alternate energy have been growing greater momentum only in the last two years since the pandemic. Climate action and modes of deriving alternate energy are now no longer buzzwords but concrete actionable points in the public and private sector. This years’ budget featured climate action as one of the main components driving economic reform and sustainable development for the country. The current government perseveres to achieve 280 GW by 2030, and as a result formulated some landmark reforms that will transform not just the energy sector but also the remaining sectors that intend to unburden the impact of pandemic.
[box type=”shadow” align=”” class=”” width=””]Major announcements:
- Push towards ‘Sunrise Economy’ with a view to foster energy transition and climate action along with productivity enhancement as part of the current government’s ‘Amrit Kaal’ or vision for 25 years.
- Setting new policies for the electric vehicular market in the future such as battery swapping policy and inter-operability standards. This may be one of the key drivers to enable ‘battery- or even energy-as-a-service’ driving more proliferation in the energy market.
- Harmonized Master list of Infrastructures (HMI) would get Energy Storage Systems that would include dense charging infrastructure and grid-scale battery systems.
- Promoting public transport in urban areas with Electric Vehicles (EVs), innovative solutions, special mobility zones enabled by a zero fossil-fuel policy.
- Driving momentum towards solar PV by allocating additional Rs. 19,500 crore, compared to Rs. 4500 crore allocated last year, for manufacturing of high-efficiency modules, with the view to integrate with polysilicon units.
- Mobilising green infrastructure with sovereign green bonds that will be issued in the coming year.
- GIFT City would include the facilitation of services like global capital for sustainable and climate finance.
- Blended finance for the sunrise sectors would be one of the thematic funds that the government would promote with a share limited to 20%, and the others managed by private fund managers.
- DRE or Decentralized Renewable Energy via the Vibrant Village Program would enable the access to enhanced financial support for distributed renewables in border villages.
- Targeting an annual savings of 38 MMT by co-firing 5-7% biomass pellets in thermal power plants.
- Energy Service Company (ESCO) business model will be promoted in commercial buildings to spread the knowledge of energy efficiency and energy saving measures.
- Testing of coal gasification and the conversion of coal into chemicals.
- Fiscal deficit of 4% of GSDP for states from which 0.5% will be linked to reforms in energy sector.
- Differential excise duty on unblended fuel of Rs. 2/litre to be levied from 01 October, 2022.
- Single-window portal for all green clearances and tracking of the process through Centralized Processing Centre-Green (CPC-Green)[/box]
What does this mean for the sector:
- A massive thrust towards modernizing the country with the Green Energy and clean mobility systems by focusing on light-touch regulations, actions that are facilitative to develop domestic capabilities and promote R&D.
- Improving the financial sustainability of the Discoms at the state level.
- Immediate recognition of energy-as-a-service models to speed up the development of the EV infrastructure and promote quick adoption of the new technology across the nation.
- Promoting entrepreneurship in the EV market with ESCO services, battery swapping and energy management systems which is the need of the hour
- A wider EV penetration in the country would be reducing the dependency of the already exhausted fossil fuels and replacing old petrol/diesel variants off the roads.
- Legitimising energy storage systems as a core infrastructure for the country
- Fostering self-reliance of solar energy units with the additional PLI allocation
All these reforms are veered towards the Prime Minister Narendra Modi’s commitment made at the 26th Conference of Parties to the UNFCCC to achieve Net Zero emissions by 2070 and reduce emissions by 2030.
– ET Edge Insights