The Union Budget has designated green growth as one of the seven themes with thrust on ecosystem development for green hydrogen, infrastructure strengthening for utility-scale renewable energy power, pushing India towards net-zero target, environmental experts said on Wednesday.
New Delhi, Feb 1,2023: The Union Budget has designated green growth as one of the seven themes with thrust on ecosystem development for green hydrogen, infrastructure strengthening for utility-scale renewable energy power, pushing India towards net-zero target, environmental experts said on Wednesday.
They said the focus on green growth, as one of the seven priority areas in the Union Budget presented by Union Finance Minister Nirmala Sitharaman in Parliament, will lend a fillip to the transition towards decarbonisation, and achieving the Nationally Determined Contributions (NDCs) and the larger net-zero goals.
Vibha Dhawan, Director General, TERI, said the green growth being a priority area in the Union Budget is reflective of the efforts undertaken across sectors to achieve the net-zero targets set for 2070.
“The outlay of Rs 19,700 crore for the National Green Hydrogen Mission and the annual production target of 5MMT by 2030 will serve as an impetus to the decarbonization process and reduce the dependence on fossil fuels. So is the provision of Rs 35,000 crore for priority capital investment towards energy transition and net-zero objectives.”
Madhav Pai, Interim CEO, WRI India and Program Executive Director (Sustainable Cities and Transport), said the inclusion of green growth as a Budget priority in the form of allocations for energy transition, emphasis on battery storage, and green credit announcement offers encouragement for the environmental sector.
“The Urban Infrastructure Fund is a welcome move with the potential to contribute toward building resilience in our cities, while the agricultural accelerator, the emphasis on millets and, particularly, support for MSMEs promise a just transition. We are yet to see the details for how some of this will pan out, particularly the green credit programme, but we are headed in a positive direction.”
Echoing a similar view, Subrahmanyam Pulipaka, CEO, National Solar Energy Federation of India, said: “Overall, we appreciate the government’s green growth specific approach to the Budget which will not only help us realise our climate goals and targets but also make India home to one of the largest energy transition programs in the world.”
As the last full budget before national elections in 2024 and heading into India’s G20 presidency, IISD Policy Advisor Balasubramanian Viswanathan said the Sitharaman’s speech consolidated the government’s position on energy and climate.
“The government clearly identifies green growth as one of the pillars of development, announcing support measures for storage and renewable energy evacuation infrastructure. This is a welcome move as India tries to rapidly increase the share of renewables in the grid. The Minister of Finance also pledged Rs 35,000 crore in support for net zero and energy transition objectives, although the details of the plan are yet to be seen. Upon inspection of the petroleum ministry budget, an equivalent support of Rs 30,000 crore as capital support for oil-marketing companies (OMCs) and Rs 5,000 crore for strategic petroleum reserves were found.
“While controlling energy prices and ensuring energy security is critical, India must ensure that financial support is directed towards low-carbon technologies.”
On climate, Ulka Kelkar, Director, Climate Program, WRI, said for the Budget allocation of Rs 35,000 crore (or about $4 billion) to start catalysing the nearly $30 billion of energy transition finance required annually by India for its net-zero future, three types of measures will be needed — risk guarantees to reduce the cost of capital for low-carbon investments in the country; demand aggregation measures as has been done for LED lighting and electric buses; and viability gap financing for hydrogen electrolysers and offshore wind as has been announced for battery storage.
“The allocation for pumped hydro as energy storage is timely. Of all renewable energy options, rooftop solar PV needs the least land and creates the most jobs per MW – targeted support and innovative business models can unlock its full potential.”
On greening the electricity sector, Ashwini Swain, Fellow at the Centre for Policy Research (CPR), said the Budget allocations for renewable energy evacuation and energy storage are useful to enable India’s renewable energy transition, but enhanced support for distributed energy resources will be critical to inclusive transition, promoting rural productivity, and thus, achieving the vision for Amrit Kaal — an empowered and inclusive economy.
“Central allocations to build transmission systems for evacuation of 13 GW RE from Ladakh and provide viability gap funding for 4 GWh (or 1 GW capacity) battery storage will give an impetus to stagnated RE deployment pace in India. Distributed Renewable Energy (DRE) was envisioned as a significant component in India’s 2022 targets and will remain critical to India’s energy transition.”
Enhanced support for off-grid solar and PM-KUSUM schemes, though from a low baseline, is a good step, said Swain.