India’s Budget and Its Impact on Renewable Energy and Cleantech – 2024

India’s commitment to fighting climate change gained momentum in 2023 with its G20 presidency, the Clean Energy Ministerial, and investments in its previous Union Budget. This trend continues in the recent interim budget 2024 but with some notable shifts and ongoing challenges.

This article highlights key points from India’s recent budget related to renewable energy and cleantech advancements.

Key themes:

• Increased focus on solar power: Aligning with national projections, the budget prioritizes solar power over wind energy for future growth.
• Shift in electric vehicle strategy: Emphasis moves from consumer subsidies to strengthening the manufacturing ecosystem.
• Railway electrification on track: Indian Railways remain committed to full electrification by 2030, supporting their net-zero target.

Solar Power:

• Investment in solar power skyrocketed, increasing by 81% from 2021 to 2023.
• A new scheme targets 10 million solar-powered households, promising free electricity and potential income from surplus energy.
• The goal is to reach 40 GW of sanctioned solar installations by 2026.

Biofuels:

• Mandatory blending of biogas in natural gas is planned.
• A new bio-manufacturing and bio-foundry scheme focuses on sustainable alternatives like bioplastics.
• Increased funding for biomass collection and biopower programs.

Hydrogen:

• Allocation for the National Hydrogen Mission doubled, reflecting ambitions to become a global hydrogen hub.
• Incentives for electrolyzer manufacturing and green hydrogen production continue.

Wind Power:

• Wind power allocation decreased, suggesting a shift in focus towards solar.
• Viability gap funding provided for an initial 1 GW of offshore wind capacity.

Transport Sector Electrification:

• The electric vehicle subsidy program was reduced by 48%, while incentives for automobile manufacturing increased.
• Significant funding was allocated for electric buses and public transport electrification.
• Investment in advanced battery storage technology amplified.

Other Initiatives:

• Rural electrification program nearing completion.
• LPG subsidies continue for cleaner cooking fuel adoption.
• Energy efficiency funding was reduced, but locomotive upgrades were prioritized.
• Nuclear power allocation doubled, with emphasis on new projects and fuel fabrication.
• Sovereign green bonds to raise funds for sustainable projects.

Overall, the budget emphasizes India’s commitment to clean energy transition, with a strong focus on solar power, biofuels, hydrogen, and electric mobility.

Challenges and uncertainties:

• Financing and execution of the “just transition”: Ensuring a smooth transition for workers and communities affected by decarbonization needs careful planning and funding.
• Interim nature of the budget: All eyes are on the post-election general election budget for a more comprehensive long-term roadmap.

Despite these considerations, increased allocations for energy transition mark a positive step towards securing India’s energy independence and tackling climate change. The coming months will reveal how these steps translate into concrete action.