Union Budget 2022- Announcements for the Energy Sector
The Renewable Energy Sector in India has been witnessing an increased focus and policy push from the government. While capital infusion of INR 1,000 crore and INR 1,500 crore was announced for the Solar Energy Corporation of India and the Indian Renewable Energy Development Agency respectively in the Budget 2021, India announced ambitious targets in the space at COP21, including its pledge to become a net zero carbon emitter by 2070. Given these commitments, substantial incentives for investments and manufacturing in the renewable energy sector were expected in the Budget 2022.
In her budget speech, Hon. Finance Minister Nirmala Sitharaman announced allocations for the energy sector focusing on renewable energy, electric mobility and well as incentives for green bonds. A battery swapping policy will be implemented to combat the constraints of space for setting up EV charging stations. Domestic manufacturing of solar PV modules would be supported to meet the goal of 280 GW of installed solar capacity and the budget allocated an amount of INR 19,500 crore for the Production Linked Incentive scheme for production of high efficiency modules. Signalling a transition to a carbon neutral economy, Hon. Finance Minister announced CO2 savings of 38 MMT annually by co-firing 5-7% biomass pellets in thermal power plants. She also highlighted energy saving and efficiency models to be promoted in commercial buildings through the Energy Saving Company model. Furthermore, dense charging infrastructure, and grid scale battery systems were given the status of infrastructure. Sovereign green bonds will be issued to mobilize resources for green infrastructure with proceeds being deployed in public sector projects.
All these measures will strengthen the renewable energy ecosystem in the country and signal India’s unfettering commitment towards meeting its green energy goals.